Petroleum Licensing (Hansard, 14 March 1996)

§ Mr. Page

Following my announcement to the House on 18 July 1995,Official Report, column 1210, inviting applications under the seventh round of landward petroleum licensing, I am pleased to announce that the applications have now been assessed and I have decided to award 22 new licences for landward oil and gas exploration covering 74 blocks.

The majority of the awards are in the east midlands and Lincolnshire basin in which a number of oil and gas discoveries have been made over many years. Other awards have been made in less well-established areas including south Wales, Yorkshire and Humberside, Hampshire, Oxfordshire and Wiltshire.

New exploration concepts offered by companies in their applications should result in a significant increase in the exploration activity on land in Great Britain. A quarter of the applications were based on gas from coal and involve the exploitation of conventional coal bed methane, gob gas—gas collecting in old mines from de-stressed coals—and the gas which is currently vented to the atmosphere from abandoned mines for safety purposes.

I have tried to strike a balance in the wards across the round as a whole to ensure that both conventional and coal bed methane resources are thoroughly explored and that the optimum exploitation of hydrocarbon resources will result.

Some of the licences awarded are for blocks that straddle land and sea boundaries. I have decided to apply strict conditions in these cases to exclude any oil and gas 705W activity below the low-water mark. Activities above the low-water mark require planning permission which will take account of any environmental impact.

Although no near shore oil and gas activity has been licensed in this round, should interest be expressed in the watery areas in future licensing rounds, I will look again at the possibility of licensing them subject to satisfactory arrangements being put in place for protecting the interests of other users of the sea and the environment.

I was very impressed with the quality of the applications as well as their innovative and considered approach to oil and gas exploration and development. This is an encouraging outcome in the first landward petroleum licensing round to be held for three years. It is also the first landward round to allow companies to apply for the new unified petroleum exploration and development licence that covers the full life cycle of any hydrocarbon discovery.

Decisions about the awards were made on the basis of the technical work programmes offered by each applicant together with their evaluation of the exploration opportunities. I also took into account environmental and financial factors.

The onshore oil and gas industry has intended to be overshadowed by the huge successes in the North sea and now west of Shetland. Nevertheless, the onshore industry has a continuing and important role to play in the UK's energy sector, particularly in the light of the opportunities from the increasingly deregulated markets for gas and electricity. We also need the flexibility and freshness of approach that small companies bring to enhance the UK's ability to meet its energy needs.

These licence awards indicate the strong interest in petroleum exploration on land and underscore the broad range of licence opportunities available to the oil and gas industry across the whole of Great Britain and the United Kingdom continental shelf. I intend to build on this interest by holding landward rounds on a regular basis in future.

I will place copies of this announcement in the Libraries of both Houses.