Offshore Oil and Gas Licences (Hansard, 22 November 1994)

§ Mr. Charles Wardle

[pursuant to his reply, 21 November 1994]: I have decided to offer 164 blocks for 82W licensing, an optimum number to enable companies to consider all options in a wide range of different areas.

I expect applicants to be committed to the future of the United Kingdom continental shelf by being competitive, innovative and continuing to cut costs.

The largest proportion of the blocks—over 60—are to the west of the Shetlands, where I want to encourage companies to build on the impetus of the Foinaven announcement earlier this month. This area has the potential for further significant discoveries and to develop into an exciting new oil province.

Following that announcement and the success of the "fast-track" 15th round in August, I intend to "fast-track" applications for west of Shetlands blocks so that those can be awarded in advance of the other areas and work can start in the summer of 1995.

The objective of this round, as of previous rounds, is to encourage exploration—particularly in new areas where there has been little drilling to date—and to continue the development of our oil and gas resources well into the next century.

I want the present momentum to be maintained, so I am calling for nominations from companies for the next round, the 17th, which will cover frontier areas to the far west of Britain where there has been little exploration so far.

Blocks offered in the 16th round include relatively new basins such as Cardigan bay and the East Irish sea, and in the English channel, as well as on the fringes of the more established areas of the North sea. The range of blocks offered illustrates the diversity of opportunities available on the UKCS.

A number of the blocks are in areas where there are particular environmental concerns. Special conditions will be attached to the award of licences in those areas in order to safeguard the environment. Those conditions have been agreed following consultation with the Joint Nature Conservation Committee, and also cover restrictions to protect the interests of other users of the sea such as fishing, transport and defence.

We have conducted a wide-ranging consultation exercise on the 329 blocks which were nominated, involving other Government Departments, local authorities and environmental groups. In all, over 100 organisations have advised us.

It is vital that oil and gas exploration activities take account of environment concerns. In July, the Minister for Industry and Energy launched a joint initiative between JNCC and the United Kingdom Offshore Operators Association. UKOOA is making a major contribution to the funding of a series of United Kingdom coastal directories and regional reports setting out the environmental resources of each coastal area. I expect companies applying for blocks in sensitive areas to demonstrate that they have taken the draft reports into account when preparing their applications and environmental management systems.

I am committed to protecting the environment, but this does not mean that there are "no go areas" where oil and gas activity is excluded for ever. As information on environmental resources improves and oil and gas technology develops, there may be increased scope for exploring areas in sensitive areas while still protecting the environment. The main factor in determining the selection 83W of blocks in the 16th round is that of perceived prospectivity.

Applications for the 16th round are required by noon on 22 March, while nominations for the 17th round are required by 8 March 1995. Except for the west of Shetlands blocks, I expect to announce licence awards for the 16th round during the summer, and the blocks nominated under the 17th round shortly after the March deadline.

I will publish tomorrow in the London Gazette and on Friday in the Edinburgh Gazette and the Belfast Gazette, a formal announcement giving the detailed financial terms for the 16th round, including the format of applications, the information required and the basis on which awards will be made. I will place in the Libraries of both Houses copies of that announcement.