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Daily Telegraph: 152 licences awarded for North Sea: “Shell has found two new fields…”

Daily Telegraph: 152 licences awarded for North Sea: “Shell has found two new fields…”

Tuesday 6 September 2005

By Malcolm Moore (Filed: 06/09/2005)

The Government will today award a record 152 licences to produce oil and gas in the North Sea to 99 companies.

Twenty-four of the licences will go to new companies, suggesting that drilling in the region is increasingly being conducted by smaller, more entrepreneurial operators, rather than by the oil majors. Since 1999, 34 new entrants have accounted for 10pc of the North Sea’s production.

“I am determined that we maximise the exploitation of the remaining reserves, which could be between 22 and 28 billion barrels of oil,” said Malcolm Wicks, the energy minister.

Several companies have made oil and gas discoveries in the North Sea in the last 12 months. Chevron found a large oil field to the west of the Shetlands, stimulating more interest in the region. Shell has found two new fields, and PetroCanada, Gaz de France, Oilexco and Dana have all also made discoveries.

The UK Offshore Operators’ Association, which is fighting to overturn a ruling that applies UK working time rules to oil platforms, said the Government had opened up “the whole of the North Sea” in the current licensing round.

“They had to do some environmental and strategic assessments, and luckily all of those were finished for this round. There was also a lot of recycled acreage on offer,” a spokesman said.

After a wave of mergers in the region, several oil companies decided to return fields they were not using to the Government to be re-licensed.

Andrew Gould, the chief executive of Schlumberger, the oil services firm, said the industry could extend the life of the region.

“I think you have to accept that the UK is in irreversible decline. The question is, how much can you flatten out the decline? I think we can reduce it considerably,” he said.

Separately, higher oil prices dragged down confidence in the service sector last month. The Chartered Institute of Purchasing and Supply said its monthly index had dropped to 55.2 in August from 56.3 in July, reaching its lowest level in three months.

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