Innovations in oil exploration are paying dividends for 12 new entrants to the North Sea who have secured around £90 million for further exploration thanks to 'promote' licences issued in 2003, Energy Minister Malcolm Wicks announced.
The licences, offered at a tenth of the cost of traditional licences for the first two years, are designed to pull in smaller firms and are generating a higher percentage of drilling than traditional licences, in what would otherwise remain unused and unexplored acreage.
Speaking at an annual PILOT meeting, Energy Minister Malcolm Wicks said:
"These results prove both the innovative drive of the firms involved and the success of the promote licence concept, without which most of this acreage would not have been touched by the traditional licence route. They have exceeded everybody's expectations.
"When the first promote licences were issued 2 years ago, we knew the promoters had the skills to be successful but they needed to attract the capital to put their ideas into action, and that's what the licences have enabled them to do."
"With clear work commitments - including 15 firm wells, a possible further seven to be started before the end of September 2007 and one proposed development - it's a great vote of confidence in the future of the North Sea.
"These companies have come up trumps by successfully promoting or developing the acreage to attract investment. It is worth remembering- and I congratulate those companies which have successfully pushed forward activity in this manner."
The recent 23rd Oil and Gas Licensing Round set an all time record of 152 licences, 76 of which were Promote, offered to 99 companies including 24 new entrants. PILOT is a joint partnership between government and the UK oil and gas industry that aims to secure a long term industry in the UK, including maximising recovery of the remaining reserves in the North Sea.
Promote Licence Initiative
• Of the 54 promote licences issued in 2003, 24 will continue. This is very positive with over 40% continuing with substantial work commitment pushing forward UKCS exploration effort.
• DTI created the promote licence - offered at a tenth of the cost of a traditional licence for the first 2 years - to encourage smaller companies with good ideas to apply for acreage and work up prospects to either sell on bring in other investors. 188 promote licences have been awarded so far, 54 in the 21st Round, 58 in the 22nd, and 76 in the latest - 23rd Round, bringing in around 35 new entrants to the North Sea.
• Work commitments include 15 firm wells (5 of which have already been drilled) and 7 new seismic surveys with associated contingent wells to be spudded before the end of September 2007, and one proposed development. The levels of drilling committed to equate to 27% of 21st Round promote licences compared with 22% for the 21st Round traditional licences.