HC Deb 14 June 1993 vol 226 cc409-11W
Dr. Twinn

To ask the President of the Board of Trade what are the results of the 14th off-shore oil and gas licensing round.

Mr. Eggar

I am able to inform the House that I received a total of 97 applications for 128 of the 484 blocks offered in the three stages of the 14th offshore licensing round. These applications involved 62 companies, either as sole applicants or in various consortia. Following careful examination of all applications, I am prepared to offer licences for 110 of the blocks applied for.

This has been the largest round, in terms of the number of blocks on offer, since the 4th round in 1972; and the largest in terms of the number of blocks awarded since the 11th round in 1989. This provides ample evidence of the high level of continuing interest in United Kingdom offshore oil and gas resources.

I have already announced the award of licences for 12 of these blocks, seven in Cardigan bay and five west of the Shetlands; in these cases, an early announcement has enabled the successful applicant to proceed promptly with exploration of potentially major new basins.

The other awards cover acreage in both new and mature areas. It was particularly refreshing to see innovative proposals for further investigation of areas such as the southern North sea, which has already been extensively explored; it is clear that such areas are mature only at particular geological horizons and that further reserves may be identified at levels previously considered unprospective.

In total, 33 of the blocks awarded have not been licensed in the past. There was particularly keen competition for blocks in the English channel, the Solway firth and the North channel which were offered for licensing for the first time. There was also strong interest in areas of St. George's channel and the Peel basin which have been lightly explored in the past.

In making decisions on the round, I have been particularly mindful of the environment. Many of these areas are close to shore and environmentally sensitive, and stringent conditions will be attached to licences to ensure that licensees take due care when exploring these blocks. The industry nominated a further 35 highly sensitive blocks for inclusion in this round but for which satisfactory safeguards could not be agreed, and these blocks were not offered for licensing. A full environmental impact assessment will be required before a licensee may develop any find within 25 miles of the coast or in other sensitive areas further offshore; and the general public will have access to the companies' environmental appraisal reports on request, in line with the EC freedom of access to environmental information directive.

Where companies applied for blocks in environmentally sensitive areas, they were asked to assess the environmental resources in these areas and to identify the steps they planned to take to avoid or minimise environmental impact, should they be awarded the block. The degree of environmental awareness and the quality of environmental presentations provided was taken into account when considering awards in these areas. I am happy to say that most companies demonstrated their awareness of environmental issues and many had carried out high-quality pre-application work. I am taking steps to ensure that companies awarded licences do not lose sight of their environmental commitments. My officials will require licensees to report on local consultation at a set time; require licensees to discuss plans for seismic activity and drilling before these activities are carried out; stipulate that, at the Department's discretion, Government observers may be present at some operations; require a post-operational return to indicate how licence conditions have been met.

These steps will ensure that the 14th round does more to safeguard the environment than any previous round.

The results of this round show the continuing commitment of the international oil and gas industry to the United Kingdom continental shelf. I am, however, particularly pleased to note the success of a number of British independent companies in the round, both as partners and as operators. The re-evaluation of mature areas and the opening up of new basins as a result of this round should ensure that the UKCS remains an important oil and gas-producing province well into the next century.