Offshore Oil and Gas Licensing (Hansard, 25 April 1994)

§ Mr. Eggar

Following the success of the 14th round, announced two years ago, I am today announcing the 15th round of offshore licensing. I am also taking the opportunity to invite nominations for the 16th round. This represents a new approach to licensing with different rounds reflecting the different stages of exploration reached in the United Kingdom continental shelf.

The overall objective remains that of encouraging exploration in the UKCS so that new fields are discovered and development continues for at least another 25 years. In order to ensure that the UKCS remains a competitive oil province, I will be expecting applicants for licences to demonstrate their commitment to competitiveness, innovation and cost reduction.

The acreage announced today makes up the 15th round. This comprises all available unlicensed acreage in the southern basin and in the central North sea. The intention of the round is to encourage early exploration in the gas prone areas. In this way, new gas discoveries can be tied into existing infrastructure.

I want to see this acreage explored quickly, with commitments from companies to early drilling in the blocks awarded. I am therefore seeking applications by 26 July with a view to announcing awards this autumn. I am very keen to see new gas developments going ahead. This "fast track" round should enable companies to make early progress. It is my intention that licensing opportunities in the more established areas should be offered, like this, on a regular basis in future.

I am also seeking nominations from oil and gas companies for blocks which they would like to see offered in the 16th round. This round will cover areas around the coast of Britain and to the north of Scotland. Nominations will be required by 26 July.

Many of the blocks in the 16th round will be in areas of environmental sensitivity or in areas where the interests of other users of the sea need to be taken into account. As in previous rounds, special conditions will need to be attached to a number of the blocks in those areas. Those conditions will be agreed with other Government Departments and with other bodies such as the Joint Nature Conservation Committee following nominations. Where blocks are in sensitive areas, I plan to ask applicants to address the environmental concerns identified in relevant surveys.

A second announcement, in the autumn, will give details of the blocks offered in the 16th round. As well as blocks nominated by companies, the round will include established acreage in the northern North sea. Any special conditions attached to individual blocks will be available at the time of this, later, announcement. In order to give time for companies to undertake the necessary preparation, applications for the 16th round will be required in March 1995 with a view to announcing awards in the summer. I will also use the second announcement to indicate my plans for a round of acreage in frontier areas, the 17th round.

I will publish tomorrow in the London Gazette and the Edinburgh Gazette and on Friday in the Belfast Gazette, a formal announcement giving the detailed financial terms for the 15th round, including the format of applications, the information required and the basis on which awards will be made. I shall place in the Libraries of both Houses copies of this formal announcement.