New “Promote” Licences Encourage Healthy Response to 21st Round

The DTI is encouraged that recent DTI initiatives to promote further exploration and development on the UKCS, and to encourage new entrants is paying off as Jim Munns (jim.munns@dti.gsi.gov.uk) Project Manager Promote UKCS reports.

The DTI announced on 13 May 2003 that in response to the 21st round it had received 30 “traditional” Offshore production licence applications and 40 new “Promote” licence applications. Applications were received for approximately 140 blocks in total making it the largest number of blocks applied for since the early 1970s.

Overall 75 companies, 36 of which are potential newcomers to the North Sea, submitted applications. Additionally eight applications were received for onshore acreage under the 11th onshore licensing round. Amongst these are a number of companies that have been targeted by the DTI as part of the Promote UKCS project as well as a number of new UK start-up companies that it is hoped will flourish in the future.

The applications will now be reviewed by the DTI, and the applicants interviewed. Notification of the successful applicants is scheduled for July/August 2003.

The announcement of the 21st round applications coincided with the publication of the results of a survey undertaken by Robertson Research International. This places the UK at the head of the rankings when it comes to the country most favoured by oil companies for new ventures in 2003. Good infrastructure and a relatively low tax environment are credited as the reasons that the UK is looking increasingly attractive.

The higher visibility of the UK on the world stage, as seen in these announcements, is a clear indication that the more active stance taken by the DTI to promote further exploration and development and to encourage new entrants is paying off.

In the past few years the following initiatives have been launched:

• PILOT, which is a joint government/industry group tasked with improving the business environment in the UK and meeting key aspirations for 2010 including production, investment and employment targets. This has led to the fallow acreage and discoveries initiative, LIFT and the encouragement of best commercial practices amongst others. See also http://ior.rml.co.uk/issue4/Articles/DTI_Fallow/index.htm
• Encouraging new entrants from overseas and new start-ups in the UK.
• The inclusion of Promote Licences in the 21st Round

The business environment in the UK is clearly evolving. The government is keen to see the arrival of a new breed of independents to develop the remaining reserves in the basins. The DTI is encouraged by the surge of interest in the UKCS. Brian Wilson, Energy Minister welcomed the news as a reconfirmation of the consistent message that there is a lot of life left in the North Sea – it is not simply a mature basin it is an evolving one!

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