THE North Sea has attracted increased interest from oil and gas exploration firms following the oil price rally since late 2016 the results of the latest UK licensing round have shown.

The Oil and Gas Authority said the 31st round generated a strong and diverse set of applications from 35 companies ranging from multinationals to microbusinesses.

The regulator said the encouraging response demonstrated that interest had increased since the 29th round held in 2016, with an almost 50 per cent increase in the number of blocks applied for.

The round suggested there is strong interest in so-called frontier areas in which there has been relatively little exploration activity, including East of Shetland and the Atlantic Margin off Western Scotland.

The exploration success enjoyed by firms such as Hurricane Energy West of Shetland in recent years has encouraged firms to look beyond areas closer to the UK mainland, on which drilling has concentrated over the years.

The results of a recent study by the OGA indicated there may be around 15 billion barrels of oil equivalent still to be found in the UK North Sea, largely in frontier areas.

However exploration drilling fell to a record low in UK waters after the plunge in the crude price from 2014 to early 2016, amid strong international competition for capital.