UK Energy Minister Says North Sea Tops for Exploration
The UK's offshore oil and gas industry received a double boost as the North Sea was confirmed as the global hot spot for new ventures, while the latest licensing round also showed a big upturn of interest.
Robertson's International New Ventures Survey polled over 200 oil companies and covered 147 countries and showed that the United Kingdom has regained its first place in the rankings as the country most favored by oil companies for new ventures in 2003.
Energy Minister, Brian Wilson said: "This shows that the UK has a world-class oil and gas industry, and reaffirms our consistent message that there is a lot of life left in the North Sea.
"The challenge now is to get licenses into the hands of those companies most likely to use them. The message is getting across to many countries, particularly in North America, who appreciate the remaining potential of the UKCS."
Mr. Wilson also announced the applications for the 21st Offshore and 11th Onshore licensing rounds which show that the momentum of interest generated by the North Sea in recent years continues.
Thirty "traditional" Offshore Production License applications were received, along with 40 new "Promote" License applications covering 140 blocks in total - an increase of over 100 on the previous round last year, and the largest number of blocks applied for since the early 1970's.
Applications were received from 75 companies - 36 of which are potential new comers to the North Sea. Additionally 8 applications were received for Onshore acreage.
Mr. Wilson added:
"Today's announcements are fantastic news for the UK oil and gas industry. It proves that the innovative and determined promotion of the North Sea undertaken by this Government is reaping rewards.
"I am delighted with the response to the latest licensing round and in particular with the number of newcomers who have applied.
"The Promote License is an excellent innovation aimed at bringing in small, clever companies from within the UK and overseas.
"In addition to the Promote Licenses, the Fallow Field Initiative and the recent Treasury-led consultation to further improve the climate for exploration in the UKCS are ensuring that the area remains an attractive global destination for new entrants.
"Our policies are working and the global oil and gas industry clearly recognizes the North Sea as a vibrant basin for investment and exploration."
The applications from the 21st Offshore and 11th Onshore licensing round will now be studied. The applicants will be interviewed by the DTI to ensure that licenses are awarded to those companies with the best ideas and ability for taking prospects forward to development. License awards are planned for August this year.
The 21st Offshore and 11th Onshore licensing round opened for applications on February 5, 2003, the application window closed on May 8, 2003.
The new Promote License was offered for application for the first time on
February 5, 2003. The 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 entry checks required as part of a traditional license. For the period of this assessment, to a maximum of two years, the license rental fee will be 10% of the rental fee for the traditional license (i.e. it will be #15 per sq kilometer). In order to continue beyond the first two years of the Initial Term, the licensee will be required to submit a report to the Department at any point within the first two years. This report will outline the research and analysis undertaken and include a request to retain the license into the third and fourth year with a commitment that will include the drilling of at least one
well, or the conduct of an equivalent agreed substantive activity, by the end
of the initial term (i.e. by the end of year four). The ability of the licensee to secure financial resources and the environmental and technical expertise to carry out the agreed commitment will need to be demonstrated to the DTI's satisfaction at the point of this request. In the event of failure of the licensee to convince the DTI of these requirements, the license will lapse. And if no report is received by the Department from the licensee to either effect by the end of the two-year period, the license will automatically expire.