Government Shakeup of North Sea Unused Blocks

Eighty previously licensed North Sea blocks that are inactive are to receive a shake up in the the 24th Offshore Oil and Gas Licensing Round announced by Energy Minister Malcolm Wicks.

The blocks were recently given up under the Government's Fallow process which seeks to put blocks and discoveries in the hands those who can best exploit them.

Since its inception in 2002, activity prompted by the fallow initiative has already resulted in a number of discoveries. In addition, 13 previously fallow discoveries have now had plans for development approved. Collectively these are likely to have reserves ranging between 200 and 250 million barrels of oil equivalent.

Energy Minister Malcolm Wicks said:

"The launch of this Round demonstrates that the Government and Industries 'Fallow initiative' to stimulate activity in the North Sea is continuing to deliver results and demonstrates the Governments ongoing drive to maximise the exploitation of our oil and gas resources.

"The annual licensing and gas regions is maintained. That's good for our economy and for UK jobs."

opportunities my Department is offering, in combination with the licence initiatives developed with industry, through PILOT, is helping to ensure the UK's position as one of the worlds successful oil The Government's full suite of licence types, developed to encourage full exploration, is on offer. To address the particular challenges in the West of Shetland region and the outer reaches of the Irish Sea, the 'Frontier' licence will be offered. The "Promote Licence", in addition to its continued offer in the North Sea, will be on offer, at least for the 24th Round, West of Shetlands and the inner regions of the Irish Sea in order to test its ability to foster new thinking in these regions. The Traditional licence will apply to all regions on offer.

Under the 'Frontier' and 'Promote' Licences, the rental fee will be cut by 90% for the first two years compared to 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 acreage on offer will include those areas currently unlicensed that were offered in last years 23rd Round with the addition of the Irish Sea that has recently been the subject of the DTI's Strategic Environmental Assessment (SEA) process. This offer is designed to build on the success of last years Round.

Find out more about:
Frontier Licence
Promote Licence
Traditional Seaward Production Licence

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Posted 21/03/06

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