Orcadian Energy (AIM:ORCA) has been granted a one-year extension to licence P2244 containing its flagship Pilot field, giving it further time to find partners and finalise a development decision.
The second term of the licence was due to expire at the end of November, but has been extended for a further year by the North Sea Transition Authority (NSTA), Orcadian said in an update on Tuesday.
The licence will now expire at the end of November 2023.
During 2023 the company said it intends to work towards a potential development decision on the 79 million barrel Pilot field, for which it raised £1 million from shareholders in June.
Orcadian, which made its IPO in London last year, intends to develop Pilot using a polymer flooding technique to boost recoverable barrels.
Under the plan, 34 wells to be drilled via a jack-up rig through a pair of well head platforms, with power from a floating wind turbine.
Earlier this year it submitted draft plans to the NSTA, but still requires full funding in order to progress the development in earnest.
Chief executive Steve Brown has said the project would cost roughly $900m, but expects the new investment incentives as part of the UK Government’s energy profits levy (EPL) could cut that down by 75%.
However, Mr Brown also recently suggested that major investors in the City of London were not “stepping up to the plate” to invest in North Sea oil and gas projects.
In its latest update the company said it considers the field “an essential aspect of a secure transition to net zero for the UK” and thanks to its wind-powered development concept, expects the Pilot field to be “amongst the lowest carbon emitting oil production facilities in the world.”
Commenting on Tuesday, Mr Brown added: “We see extending the licence as a real vote of confidence from the NSTA in the North Sea. We look forward to progressing the Pilot project during 2023, and we believe that when production commences at Pilot it will contribute greatly to the UK’s energy security.
“We believe the UK North Sea is blazing a trail for the global oil and gas industry. It is time to ‘Back British Energy’ and we are confident that the Pilot development has the potential to be a flagship project demonstrating how to reduce global emissions and making a contribution to the transition to net zero.
“We would like to thank the regulator, and everyone working there, for their continued support for this project.”
