Great Britain Awards 25 New Licenses in 20th Licensing Round
Great Britain awarded 25 North Sea oil and gas licenses on Thursday under new terms designed to speed up investment and prevent companies sitting on unexploited discoveries. British Energy Minister Brian Wilson said he was encouraged by the interest in the offshore concessions, which comes after the government imposed a windfall tax on oil company profits in April that was heavily opposed by the industry. "It is encouraging that so many companies see further opportunities for investment and development in the North Sea's core areas, even after nearly 40 years of exploration there," Wilson said in a written reply to a parliamentary question. "It bodes well for future licensing rounds, which will cover a lot of acreage that, by contrast to what was on offer in this round, is still under-explored and under-exploited," he added.
The list of winners was dominated by independents, such as Encana and OilExCo, and most of the minimum work programs involved acquiring seismic data and drilling just one well.
Wilson said he sought to encourage small companies to use new technology in the ageing province, where oil output peaked in 1999 at 2.8 million barrels per day. Oil major such as ExxonMobil, BP, Shell and TotalFinaElf pump half of Britain's oil and gas, and own most of the licenses. But these companies figured in just two awards. The government has been pushing majors to invest in unexplored licenses from previous rounds, or risk losing the contracts to smaller companies.
In this 20th offshore round, Wilson said he had shortened the exploration and appraisal period, before investing in production, to prevent the appearance of "fallow acreage" in the future.
The first two terms will last for four years each, from six and 12 years respectively, and there will be mandatory relinquishment of all acreage not covered by a development plan at the end of the second term. "All this is part of the government's strategy of bringing together acreage with companies best fitted to exploit it," Wilson said.