• Wednesday, 16 May, 2012

UK round to open up the field of play

 18 March 2005 00:01 GMT

The UK has launched its 23rd oil and gas licensing round with a record-breaking 1329 offshore blocks on offer the highest number to be made available since the start of UK licensing in 1964.
Energy Minister Mike O'Brien said the 23rd round included new areas that have not been made available for some years.

The new round eclipses the 1039 blocks that were offered in the previous licensing round last year.

The Department of Trade & Industry (DTI) said 129 whole or part blocks were relinquished in 2004.

More than 50 previously fallow blocks will be on offer in the 23rd round that were not available in the previous licensing round.

The DTI said applications for the round will have to be submitted by 9 June, with the department interviewing applicants in July and August. The round awards are due to be made in September or October.

It added that the frontier licence recognises the particular challenges in the West of Shetland region, while the promote licence is offered in areas excluding the West of Shetland and the traditional licence will apply to all regions.

The DTI said that under the frontier and promote licences the rental fee will be cut by 90% for the first two years compared with the rate for a traditional production licence.

This, together with the extended exploration and development periods on the frontier licence, will give companies an added incentive to find oil and gas in new regions.

The UK Offshore Operators' Association (UKOOA) welcomed the licensing round. "Strategic environmental assessments are now in place for the whole of the North Sea, which means that for the first time since 1998 the area is now fully open for oil and gas business," said Malcolm Webb, UKOOA's chief executive.

"A significant number of licences that have been freed up through the fallow initiative where the industry and government jointly agree to recycle acreage where there has been no investment activity for many years are also on offer.

"The round, which once more includes the innovative frontier and promote licences alongside the traditional licence, provides the widest range of opportunities in some time for companies to explore for, find and develop the hydrocarbon resources of the North Sea," he added.

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