UK seeks to maximise North Sea oil output

Feb 18, 2002 01:00 AM

The UK government is in talks with the North Sea oil industry about changes to the licensing regime to ensure that reserves are exploited to the full. Brian Wilson, the minister responsible for energy policy at the Department of Trade and Industry, said last night that he was keen to ensure exploration and production licences were held by companies which would take advantage of them but stressed that the government was working with oil firms rather than seeking to impose its ideas.

Mr Wilson, who also chairs Pilot, a government/oil industry organisation, said small, independent oil companies had a crucial role in the government's plans. "We are working through Pilot to achieve an approach which ensures that licences are in the hands of companies which are most likely to make use of them, including small independents whose innovative approach is vital to the future of North Sea oil," he said.
"This is being pursued on a consensual basis and I am impressed by the progress which is being made. I have made it clear that we really do want to see development taking place wherever there is a reasonable prospect of success. It is important to note, however, that large companies are also innovative." Under the present regime oil companies can hold licences for North Sea blocks for up to 40 years without using them.

The government has already indicated that the speed with which companies exploit areas allocated to them will play a part in deciding future licences. However, the current discussions are understood to cover existing licences, with companies facing the prospect of having to give up part of their licences if they are deemed to be too slow in exploiting them.
Britain's North Sea reserves are put at between 26 bn and 34 bn boe -- that is, either oil or gas -- but according to some industry experts about 4 bn barrels are in separate "pools" which have yet to be exploited. Some of the pools cannot not be developed profitably while others await development of the necessary technology. The government is understood to believe that in other areas faster progress could be made. Oil independent Venture Production said that it is to float on the London stock market.

The Aberdeen-based group specialises in the acquisition and exploitation of proven reserves and the development of discovered but undeveloped reserves.

Source: Guardian Unlimited
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