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Licensing round is North Sea’s ‘most successful’

Lloyds List: Licensing round is North Sea’s ‘most successful’

“ExxonMobil and Shell gained the largest ever licence awarded in the UK North Sea, gaining 20 blocks in a 1.2m acre area of the Mid-North Sea High area 90 miles east of Newcastle.”

Friday Sept 09, 2005

Martyn Wingrove

OIL and gas exploration markets in the North Sea received a further boost when the British government awarded a record 152 licences in the 23rd offshore round.

Up to 99 oil and gas companies were awarded a total of 264 exploration blocks, with 24 new entrants gaining opportunities to invest in the sector.

Energy Minister Malcolm Wicks described the round as the most successful since 1964 and is impressed how companies are driving to explore for more oil and gas resources.

‘I am determined to see we maximise the exploitation of the remaining reserves which could be between 22bn and 28bn barrels of oil equivalent,’ said Mr Wicks at the Offshore Europe oil show in Aberdeen.

Of the 152 licences awarded in the round, 70 were traditional licences, 38 more than those awarded last year, and 76 were promote licences where rental rates are at a 90% discount.

There were also six frontier licences awarded to companies looking to explore in the West of Shetlands region, one more than last year.

Oil majors came bursting back with BP, Shell and ExxonMobil gaining new exploration blocks.

ExxonMobil and Shell gained the largest ever licence awarded in the UK North Sea, gaining 20 blocks in a 1.2m acre area of the Mid-North Sea High area 90 miles east of Newcastle.

‘While the area carries significant risk and high uncertainty, it also has a significant upside potential that we want to further evaluate and explore,’ said Robert Olsen, chairman of ExxonMobil International.

The British oil industry’s representative UK Offshore Operators Association welcomed the awards, which it sees as ‘highly encouraging for the future of the North Sea’.

North American and British oil independents also gained numerous exploration licences in the round that can only benefit their investors.

Exploration drilling levels are soaring in the British sector following the last three successful licence rounds and a host of new discoveries, the largest of which was drilled by Chevron on the Rosebank-Lochnagar structure in the West of Shetlands region last year.

Drilling rig and offshore support vessel charter rates have climbed to record levels in northwest Europe as a result of strong exploration markets.

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