Some 700 new exploration plots were opened up this summer, half a century since the Seaquest drilling rig pumped out the first drops of liquid gold in September 1969.
It is the first time new plots have been offered since the UK signed up to zero emissions targets and since the economic reality of Brexit was fully realised by the government.
This is just one of the drivers behind the resurgence of interest in, and importance of, the “grand old dame of European oil fields”, according to Francesco Mazzagatti, CEO of the oil group Viaro Energy. He said: “Like every export sector of the UK, the drive for more independence has made oil part of the critical national economic infrastructure of the post-Brexit UK. “Like all complex, fast changing and potentially profitable contexts, the North Sea represents a unique opportunity and a challenge.”
After several golden years of set $100-a-barrel prices, solid investment structure and political stability the North Sea fell on hard times as the old model of oil exploration slipped away.
The price of a barrel of oil fell below $40 in 2016 and the economic architecture of the oil industry was transformed.
The shale industry in the US turned oil and gas supply production assumptions upside down, while the reality of climate change provoked deeper legal and technological changes.
But Mazzagatti has welcomed the changes that the shifting global environment has brought and, along with other smaller players in the energy sector, is looking to profit from them.
He said: “At Viaro Energy we started to look into upstream investment and evaluate and identify geographic location where to lunch the new division.
“We believe the North Sea is the right location for us to start the upstream venture, for a medium size oil company like us, it’s important to be in a place with geopolitical stability, where you don’t need high security service to protect the field, a stable tax system to make a proper business plan with not many surprises and well regulated.” In welcoming these changes, he is also well placed to embrace the newer “short cycle projects” that are now in vogue in the old established North Sea field.
Rather than vast amounts being invested by huge companies for long terms, the future is smaller investments by nimbler firms for quicker returns. This short-term cycle first emerged in the US shale industry, which has brought the USA to energy self-sufficiency. In the context of carbon reduction targets and the development of renewable energy sources, that short cycle project model is likely to become the norm in the oil industry.