The new 'Frontier' license allows companies to apply for relatively large amounts of acreage at significantly reduced costs and give them more time to carry out the necessary exploration and development.
The license will be on offer in the forthcoming 22nd Offshore Licensing Round and will apply to blocks in the Atlantic Margin, West of the Shetland Isles.
Announcing the new license at an energy conference in Sanderstolen, Norway, Mr. Timms said:
"I am delighted to make yet another improvement to our Licensing system by introducing the Frontier license. It is further proof of our commitment to innovate where possible and maximize the full potential of our UKCS reserves.
"By reducing the cost and extending the exploration time of the license we are sending out a strong signal to companies that exploration and development in challenging areas will be supported and encouraged by Government.
"Following on from the success of the Promote license in the 21st round of licensing which provided great incentives to the smaller prospectors, I believe that the Frontier license offers benefits to the more established players who are more likely to prospect in the new blocks.
"The new license will be made available in the 22nd offshore licensing round which I hope to announce in the coming weeks."
The frontier License will allow companies to apply for relatively large amounts of acreage and then relinquish three quarters of that acreage after an initial screening phase during which the normal rental fees will be discounted by 90%. Additionally the Exploration and Development periods will be extended by two years over and above those stipulated for the Traditional license.
The new license will be on offer for the areas west of the Shetland Isles only, comprising the areas 1 & 4 of the DTI's Strategic Environmental Assessment process, although the exact areas that will be available for Licensing are yet to be concluded by this process.
In the 22nd round, the Traditional licence will also be on offer in this area and all other areas that are put on offer for licensing. The Promote license will only be on offer in areas other than the West of Shetland Regions.
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