Oil and gas exploration licences granted by DECC today reveal industry interest in developing the UK’s North Sea resources remains vibrant.
Following the positive trends of recent years, 144 licences to extract oil and gas from UK waters have been offered in the 26th licensing round. These licences cover 268 blocks, almost as many as the 303 awarded in the 25th Round.
Energy Minister Charles Hendry said:
“It’s encouraging to see the healthy level of interest there is from industry to make the most of the UK’s still substantial resources of oil and gas.
“Whilst in the long-term, we want to decarbonise our energy system, we have moved swiftly to offer these licences as we must realise the optimum value from the UK’s energy resources and ensure secure energy supplies.
“We remain absolutely vigilant and determined to ensure that exploration in our waters is done safely and with minimal impact to the environment.”
Following a screening exercise by DECC, it has been decided that 99 further blocks (comprised in 45 prospective licences) should be subject to more detailed assessments of the likely effects of oil and gas activities on certain protected nature conservation areas. A decision on whether to grant licences for these blocks will be subject to the results of the environmental assessments.
Government will continue to work with industry through the PILOT forum to maintain investment in the North Sea. Earlier initiatives including innovation in the licensing system, a focus on “brown fields” stewardship and on fallow assets have helped maintain high levels of interest in recent years. We will work closely with industry to ensure that this is carried through so that activity and investment should be as high as possible.
Notes for editors
The 26th Oil & Gas Licensing Round closed on 28 April 2010. Full details of the awards can be viewed at: www.og.decc.gov.uk/
Licence awards data:
25th Round 26th Round
Number of licences being awarded
Blocks being awarded in all
268 (99 under further consideration)
Number of companies being offered an award
Of which newcomes to UKCS
The UK’s Oil and gas sector currently provides around 60% of the country’s energy and benefits the UK balance of trade to the tune of £30 billion a year. It is by far the largest single industrial UK investor and directly and indirectly supports over 450,000 jobs thoughout the economy.
Any licences awarded in the 26th Round will contain conditions to protect environmental interests and those 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 legislation which implements the Environmental Impact Assessment Directive and the Habitats and Wild Birds Directives in respect of offshore oil and gas activities.
Following a screening assessment, 99 of the blocks applied for in the 26th Round which are close to, or in, certain Special Areas of Conservation (SACs) or Special Protection Areas (SPAs) have not been included in these awards and will be subject to “Appropriate Assessments” of their effects on these SACs and SPAs. There will be a consultation on the recommendations of the environmental assessments before any decision is made on whether to award licences for these 99 blocks.
TOTAL E&P UK and partner DONG Energy have today confirmed the award of a contract for the development of the onshore gas processing plant on the Shetland Islands, as part of the Laggan and Tormore project, to Petrofac Limited. The contract , worth about £500 million ,was signed at DECC’s offices in London today.