HC Deb 15 March 2002 vol 381 c1257W
Mr. David Stewart

To ask the Secretary of State for Trade and Industry if she will make a statement on her Department's policy on the development of Fallow Field oil and gas exploration licences. [42718]

Mr. Wilson

The UK cannot afford to have petroleum discoveries or areas of the Continental Shelf lying fallow. We believe that petroleum licences should be in the hands of those companies that are committed to undertaking appropriate work to find, test and develop effectively the UK's petroleum resources in the shortest possible time span.

The DTI has worked with the oil and gas industry in PILOT to establish a robust mechanism that will encourage companies holding fallow blocks or discoveries to decide within a reasonable time scale (15 months for fallow blocks and just over two years for fallow discoveries), whether to be active and move towards development or relinquish the licences on which they sit so that others have an opportunity to act.

Officials in my Department have identified some 120 fallow discoveries and 160 fallow blocks on the UKCS where the current owners do not appear to be doing all that they can to generate activity. These fallow assets could encompass 250 undrilled structures and contain reserves equivalent to around 1.5 billion barrels of oil.

The mechanism was launched on 5 March and we immediately wrote to each licensee that has been identified as holding fallow blocks and discoveries to initiate the first stage of the process.

The performance of companies holding fallow assets will be reviewed every year to ensure that they remain focused on bringing forward activity.