OFFSHORE regulator the Oil and Gas Authority (OGA) has said it is “highly encouraging” that 25 licences have been awarded in its latest round for companies to explore for oil in waters around the UK.

All the licences focus on regions that are previously under-explored, including Rockall, in the North Atlantic, and East Shetland. This 29th licensing round is the first in 20 years to focus on these so-called frontier areas.

The last round in 2014/15 saw 175 licences awarded, but the OGA said that with a major fall in oil and gas prices the commitment from oil companies will help stimulate further activity.

Previously, companies were able to bid for exclusive oil exploration rights in small sections of seabed called blocks in any part of the UK’s waters. Following the downturn, the OGA spent £20 million on seismic surveys of two key areas.

These included the Mid North Sea High region, which is one of the last remaining under-explored areas of the UK Continental Shelf (UKCS).

Geologists at the University of Aberdeen have studied the results and said earlier this month that there may be reserves around the islet of Rockall which had previously been dismissed as devoid of oil.

The 25 licences issued yesterday are to 17 companies in 111 blocks, with commitments to drill three exploration wells in the near to medium-term, along with proposed work programmes involving the application of new technology.

Andy Samuel, the OGA’s chief executive, said: “The £20m investment in new seismic for the Rockall and Mid North Sea High areas, subsequent release of 40,000 kilometres of new and reprocessed data, combined with the work of the MER UK Exploration task force in developing the innovate licence, and a stable and competitive fiscal regime has resulted in a number of quality applications in this frontier licensing round.

“We are particularly pleased to see firm well commitments, the targeting of new and under-explored plays, and first-time entrants to the basin, alongside a number of established companies, which will help stimulate further activity and value creation.

“While exploration activity has undoubtedly suffered as a result of the difficult market conditions, we are now seeing highly encouraging success rates and finding costs on the UKCS.

“This is testament to the value of a robust and focused exploration strategy with commitment from industry, government and the OGA.”

He added: “The upcoming 30th Offshore Licensing Round will focus on mature areas and is expected to be the most significant offshore round in recent decades.

“An extensive number of prospects and undeveloped discoveries will be on offer.

“Ahead of the launch, we will be releasing information packs on a number of these opportunities.

“The 30th round is likely to be announced during the latter half of the second quarter of 2017, and will be open for 120 days.”

Industry body Oil and Gas UK’s latest business outlook said exploration activity “remained depressed” with only 22 wells drilled last year.

So far this year the price of benchmark Brent Crude has fluctuated a dollar or so above and below the $50 mark, and yesterday it appeared to have settled around $50.30. However, few wold expect it to reach the heady figure from 2008 when it topped $147.27 a barrel.