DECC received a total of 224 applications showing interest in 481 blocks of UKCS, of which the department approved 167 oil and gas exploration licenses covering 330 North Sea blocks.
UK Energy Minister John Hayes said oil and gas from waters provides almost half of the energy consumed by the country.
"This successful licensing round shows we are taking the right action to offer certainty and confidence to investors," Hayes said.
"Our fiscal regime is now encouraging small fields into production and our licensing regime supports new faces as well the big players to invest."
Oil and Gas UK, the trade association of UK offshore oil and gas industry, is also planning a joint exploration task group with DECC to boost new drilling.
Oil & Gas UK economics and commercial director Mike Tholen said awarding the exploration licenses indicates huge potential for the business and it also reassures government’s support for the upstream industry.
"The record number of applications for licences in this 27th Round shows that investor confidence is returning following 18 months of constructive engagement with the Treasury and the announcement of several measures aimed at boosting activity," Tholen said.
The step announced by the government is expected to enhance the economics of small fields but it is only one of the many factors that would influence the upstream industry.
