The licenses are being offered to 62 companies as a result of the 21st Offshore Licensing Round, and prove the continued value of the UK Continental Shelf with a record 27 companies new entrants to the area. The licensing round opened for applications on February 5, 2003 and closed on May 8, 2003
The awards underline the success of the new "Promote" licenses, which have been designed to encourage new, smaller independent players to invest in the North Sea. Of the 88 licenses awarded, 53 are "Promote" licenses.
Stephen Timms said: "Today's offers are fantastic news for the UK oil and gas industry and I am particularly pleased with the number of newcomers to the North Sea who have taken advantage of the new Promote License.
"The Promote License has attracted fresh and energetic new players from both home and overseas. We are determined to build the momentum of exploration and this outcome, in addition to PILOT's Fallow Field Initiative and the Government consultation on exploration, continues to improve the climate for exploration in the UKCS and ensure development in the North Sea for many years to come.
"We have always maintained and promoted the North Sea as a developing area and today's offers which are the largest since the late 1980's, are proof positive that this approach is the right one.
"It is clear confirmation that our policies in the North Sea are working and that the UKCS still offers plenty of opportunities for investment and exploration."
The offer comprises 35 "Traditional" Offshore Production Licenses and 53 of the new Promote Licenses covering 137 blocks. Successful applicants will have a fixed period in which to decide whether or not to accept the offers. Traditional North Sea heavyweight BP, which has shed some of its waning assets in the area this year, was only offered one license, and that as one of three partners to Marathon Oil. Shell Expro, a joint venture between Shell and ExxonMobil, was offered two licenses.
The new 'Promote' License offers the licensee the opportunity to assess and promote the prospectivity of the licensed acreage for an initial two-year period without the stringent financial, technical and environmental entry checks to be passed for a traditional license. However, Promote Licensees will not be approved as Operator (and therefore will not be permitted to carry out exploration activity, such as the drilling of wells) until they have passed those checks and also made a Firm Commitment to complete an agreed Initial Term Work Program. For the period of this assessment the license rental fee will be 10% of the rental fee for the traditional license (i.e. it will be £15 per sq kilometer).
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