THE oil and gas regulator has said the North Sea is back following an exploration licensing round which reflected huge interest in areas such as West of Shetland.

Andy Samuel, chief executive of the Oil and Gas authority, said the results of the latest round showed that exploration is very much alive in the UK North Sea as the industry emerges from a brutal downturn.

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He noted the 30th round attracted strong interest among companies ranging from international giants to relatively small independents. Some 61 companies were awarded acreage, including seven new entrants to the UK North Sea.

The round could pave the way for a dramatic increase in activity in the relatively underexplored waters off Shetland, where giants such as BP and Shell have been awarded more territory.

The latest awards will result in a 75 per cent increase in the area West of Shetland covered by licences.

The total area of North Sea licences will increase by 50%.

Oil and gas firms see the potential to find as much as 3.6 billion barrels on the new licences. Successful applicants have made firm commitments to drill eight wells.

Some appear keen to develop some of the finds that have been left idle off the UK. The OGA said the round could help to unlock 12 discoveries that are thought to contain around 320 million barrels in total.

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“The United Kingdom Continental Shelf (UKCS) is back,” said Mr Samuel. “Big questions facing the basin have been answered in this round.”

He said the results confirmed there remains a strong appetite for exploration in what is seen as a mature area, in spite of the challenges the industry has faced following the sharp fall in the oil price since 2014.

“Since the round closed the interest has grown yet further and people are now anxiously asking about the 31st round and out of round possibilities, so it’s very encouraging,” added Mr Samuel.

The 31st round will cover large areas east of Shetland and north west of Scotland.

Mr Samuel noted the increase in the crude price since late 2016 has probably helped.

The results provide further evidence that the North Sea industry is on the road to recovery with oil and gas firms prepared to invest again after three years of deep cuts in spending.

Four North Sea developments have been approved by firms this year and 50 more are under consideration.

Read more: BP announces new North Sea developments as oil price rises

Mr Samuel said changes in the regulatory and fiscal regimes and moves by firms to increase efficiency have made it more attractive to invest in the area.

Deirdre Michie, chief executive of industry body Oil & Gas UK, said: “It’s great see so many companies submitting applications as this demonstrates another vote of confidence in exploring for oil and gas on the UKCS.”

She cautioned: “We now need these opportunities to be pursued with a sense of urgency to help unlock activity for our hard-pressed supply chain.”

Exploration drilling in the UK North Sea has fallen to record lows, with just 14 wells drilled in each of the last two years.

Mr Samuel said firms have achieved high success rates in recent drilling..

The results of the latest oil and gas industry survey by Aberdeen and Grampian Chamber of Commerce indicate there has been some improvement in supply chain conditions.

The chamber found the value of exploration and production activity in the UK is rising with firms equally optimistic about the North Sea and international markets for the first time since 2013.

Some 64%, of contractors said they were more confident about doing business than they were a year ago with 8% less so. The rate of job reduction slowed in the 12 months to March.

BP, Shell and Total have invested heavily in giant developments West of Shetland in recent years, such as Clair Ridge. The kit they have installed could be used on other fields.

Ariel Flores, BP North Sea Regional President, said the company achieved a strong result in the latest round. It won licences covering 26 blocks.

Mr Flores added: “BP continues on a path of positive momentum in the North Sea as we bring on major projects; explore at higher levels than in recent times; and rapidly develop smaller fields located next to our established hubs."