§ Miss BeggTo ask the Secretary of State for Trade and Industry, pursuant to her answer to the hon. Member for South Derbyshire (Mr. Todd) of 20 July 2001,Official Report, columns 609–10W, what decisions she has made on Out-of-Round Offshore Licence awards. [28191]
§ Mr. WilsonI will offer licences to Tuscan Energy (Scotland) Ltd. and Acorn North Sea Ltd. for Block 30/24, which includes the former Argyll, Duncan and Innes fields, and to ATP Oil and Gas (UK) Ltd. and CalEnergy Gas (UK) Ltd. for Part-Blocks 42/25a and 43/21a.
These awards, in their different ways. are good signs for the future of the United Kingdom Continental Shelf. They demonstrate some of the new approaches and working arrangements that PILOT has been pressing for over the past three years.
Argyll was the UK's first producing offshore field, but it was abandoned as uneconomic back in 1992 when less than 40 per cent. of the oil had been recovered. Tuscan/Acorn now hope to use the latest technology to reopen it and extract more of the oil left behind. Subsequently they should be able to reopen the old Duncan and Innes fields too, both of which were abandoned at the same time as Argyll. Tuscan and Acorn are two small new British companies, taking a fresh and imaginative look at the opportunities in the North sea and introducing a productive new alliance with the North sea's supply chain in the shape of Schlumberger and ABB.
ATP is one of the new entrants that DTI has been working hard to attract to the UK to bring work to our Fallow Discoveries. Their focused, high-efficiency approach, developed in the Gulf of Mexico, will allow them to develop the 43/21a discovery and other Fallow Discoveries, which others may not see as economic.
However, I do not intend to allow any of this valuable acreage to run to fallow. Accordingly the licences will be individually tailored to match the companies' plans. Tuscan/Acorn will receive four licences, three of which each cover one of the former fields while the fourth covers the rest of the block. Each licence will expire at an early date if the companies fail to meet their work commitments, so that if necessary each asset will individually be made available for relicensing. ATP's licence also has an early expiry date in the event that it is not progressed by then.
§ Miss BeggTo ask the Secretary of State for Trade and Industry what opportunities there are for companies to acquire petroleum licences over unlicensed acreage in the North sea. [28192]
§ Mr. WilsonI am today inviting applications for petroleum licences over a large number of blocks in the southern, central and northern North sea which will form the 20th round of offshore petroleum licensing. The blocks made available for licensing are close to existing petroleum developments and infrastructure.
This is the first North sea licensing round since blocks were awarded in the 18th round in December 1998. As such, I anticipate that there will be significant demand 338W for licences from companies keen to acquire exploration opportunities in proven petroleum play areas. While there has been a great deal of oil and gas exploration on the UK Continental Shelf (UKCS) since North sea drilling started in 1964, there are still many geological horizons that have yet to be fully tested. The recent 'Buzzard' discovery is evidence that there is still significant potential for further large discoveries in the North sea.
In deciding which blocks to make available for licensing, I have considered the results of the Strategic Environmental Assessment covering a large swathe of the North sea undertaken by my Department on which consultation closed in December. After considering the assessment and the responses to the consultation, I have decided to take a precautionary approach and not offer for licence parts of four blocks in the central North sea because of the need to undertake further scientific analysis of a number of 'pock mark' features which were highlighted by the environmental assessment.
Any licences awarded in the round will contain conditions to protect environmental interests and the interests of other sea users. In addition, activities carried out under the licences will be subject to a range of legislation which is designed to protect the marine environment, including regulations which apply the Environmental Impact Assessment and Habitats directives to offshore oil and gas activities.
The licences will also contain provisions to ensure that licensees either undertake exploration work within a relatively short timescale or relinquish the licence at the earliest possible opportunity so that other companies are able to take forward exploration of the area. These requirements support PILOT initiatives to remove barriers to activity on the UKCS.