§ Mr. GroganTo ask the Secretary of State for Trade and Industry what awards have been made in the 18 Seaward Round of Petroleum Licensing; and what plans he has for future licensing rounds. [62292]
§ Mr. BattleCreative and innovative proposals are key features in the award of licences on 78 of the 82 blocks applied for in the 18th Round of Seaward Petroleum Licensing. The awards are made to a total of 44 companies, of which 22 are operators of one or more of the blocks.
The applications received showed that companies are still thinking creatively and generating innovative proposals to identify significant new prospects in the North Sea. Despite more than 30 years of exploration activity in the area, there was strong competition for attractive blocks and clear evidence that companies are prepared to look beyond traditional areas and the tested strata to find new resources.
The willingness of companies to test innovative thinking with both further technical analysis and early drilling where appropriate confirms that the industry still sees the North Sea as an exploration area with significant potential in undiscovered reserves. I believe that the open basis of this round—the first to allow companies to bid for almost any unlicensed blocks in mature areas of the United Kingdom Continental Shelf—encouraged companies to develop innovative ideas and bring them forward as licence applications.
When the 18th Round was launched in June this year, our expectation was that most applications would focus on acreage close to existing developments or infrastructure, where any discoveries were likely to be brought on stream as rapidly as possible in order to prolong the life of current assets.
In the event, a majority of the applications received reflected this pattern, and there was strong competition for several blocks, but an unexpected—and very pleasing—number of other applications were received which identified strata and structures with previously unrecognised hydrocarbon potential.
Some of these concepts were developed in blocks which have been licensed and explored for conventional targets before. Twelve of the blocks awarded have not previously been licensed. Eight of these are granted to the Shell/Esso partnership whose application stood out for its creative approach.
Two of the blocks applied for—48/19d and 210/20c—have been divided between competing applicants. This will allow presumed extensions of adjacent fields—Anglia and Otter respectively—into the new acreage to be appraised and brought into production as soon as possible, while at the same time maximising exploration of the remaining area.
I look forward to seeing the successful applicants moving forward to explore their new holdings, and to develop any new reserves they may discover.
I expect to make a further announcement about a 19th Seaward Round next year.