Licence Block

Published at 06:08PM - 20/06/14

A licence block or block, is a measurement of land or continental shelf used by governments when auctioning off exploration rights.  Once a block has been licensed to an exploration company that company has sole rights over all exploration and production within that block.

Along with the licence come many terms and conditions that the exploration company has to meet.  For example in the UK there is a policy called ‘Fallow Acreage Initiative’, which aims to stop exploration companies buying up licences and sitting on them for years without actually conducting any exploratory drilling.  If terms are not met, then licences have to be returned.

 

Block Sizes

Blocks are measured differently from country to country.  For example, within the North Sea alone blocks are measured as:

  • UK.                      Each block measures 10 minutes latitude by 12 minutes longitude.
  • Norway:            Each block measures 15 minutes latitude by 20 minutes longitude.
  • Netherlands:   Each block measures 10 minutes latitude by 20 minutes longitude.

There are also separate measurements for Germany, France, Belgium and Denmark within the North Sea.

 

Block Numbering

A group of blocks normally make up a larger measurement called a quadrant.  Again these differ in size from country to country, but in the UK 30 blocks make up a quadrant, hence blocks are normally numbered 1 – 30.

It is common practice for exploration and production companies to sell off a portion of their licence block to another for reasons such as; raising finance, there is a section of licence block they are unlikely to develop or a section of licence block they deem themselves too inexperienced to develop.  When this happens the numbering commonly runs alphabetically as a suffix to the block number e.g. 27/a.

 

 

Last updated on 04:16PM - 29/06/14