O’Brien announces new North Sea licenses
The new Energy Minister, Mike O’Brien, has announced the Government is offering 97 licenses for offshore oil and gas exportation in the North Sea.
When the licensing round was announced in March, then Energy Minister Stephen Timms declared it was the most extensive since 1965.
Among the licenses on offer was a new “Frontier” license covering the area to the west of Shetland. This allows companies to apply for large areas then, after an initial screenings has been conducted, give up three quarters of the area. The exploration and development periods of these licenses will also be two years longer than for traditional licenses.
Today’s announcement is one of Mr O’Brien’s first acts in the role of Energy Minister having only been appointed to the post last Thursday.
58 companies have been offered the 97 licenses, with 15 of them potential newcomers to the North Sea. The successful applicants will have a fixed period to decide whether to take up the offer.
Speaking today to industry executives in Aberdeen, Mr O’Brien said: “The UK’s oil and gas industry makes an invaluable contribution to our nation’s economy and so early into my new job I am pleased to announce new licence offers.
“Today’s announcement is proof positive of the investment, exploration and development potential still to be exploited in the North Sea and west of Shetland.
“Our progressive and innovative licensing system is proving a real success in attracting international attention to the North Sea.
“We will continue to work closely with industry and continue to create, wherever possible, the right environment in which to maximise recovery of our natural resources. I am looking forward to forming close links with one of our most important and respected industries.”
The Government will be hoping that the new licenses will help boost the North Sea’s oil production which has been falling for a number of years. In July this year, the UK posted a deficit in its oil trade for the first time in 13 years.
