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North Sea Oil (Licensing)

Volume 983: debated on Thursday 1 May 1980

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asked the Secretary of State for Energy whether he will make a statement on the seventh round of offshore licensing.

I have today lodged in the House Library copies of a note describing the method of licensing I have decided on for the seventh round of offshore petroleum production licensing, and including a list and map showing the blocks for which I shall in due course be inviting applications for licences. The principal features of the arrangements will be as follows:

  • a. My aim is to license approximately 90 blocks, of which at least 20 blocks will be in the area set aside for company nominations;
  • b. I have listed 80 identified blocks for which I will be inviting applications: a maxi mum of 70 of these identified blocks will be licensed. In addition, companies will be able to apply for any block or blocks, of their own selection, in a defined area of the northern North Sea, as indicated in the detailed note of the arrangements for the round. Licensees will be required to make an initial payment of £5 million on grant of licence for each block licensed to them in this defined area.
  • c. Licences will be awarded by the normal discretionary method of allocation. In considering applications I shall take into account the applicant's technical competence and financial capability, and his previous per-formance and plans for the future on a range of other factors.
  • The amending regulations to govern the round and to modify certain model clauses will be made and laid before the House as soon as possible. The Gazette notices inviting applications and setting the closing date for receipt of applications will be published when the regulations come into operation. The notices will also set out the arrangements to give BNOC an option to take at market value up to 51 per cent. of the petroleum produced under the new licences.The arrangements I have decided on have been determined following consultation with interested organisations. During the course of consultations, the view has been put to me that the licensing of some areas, particularly in the English Channel and parts of the Moray Firth, is of major interest to the fishing industry and to organisations concerned with environmental matters, and that particular care and consideration are needed in the conduct of exploration and development in these areas. I agree with this view. Oil and gas activities must be carried out in a manner which causes as little inconvenience as possible to other marine users, and which safeguards the environment. When operating in blocks close to the shore, licensees must take special care to avoid pollution. Licensees working in areas of especial interest to the fishing industry should liaise with the relevant fishing organisations about oil and gas operations, and carry out these operations so as to cause as little interference as practicable to fishing interests. On more general environmental matters, I will expect that—as part of the process for preparing a development plan for a discovery near to shore—the licensee will normally carry out a study into the implications of the proposed development on the marine environment, on other users of the sea, and on local coastal areas, consulting the relevant local authority as appropriate. Any proposed installations onshore will be covered by the normal planning procedures.The Government are confident that the blocks to be offered for licensing, and the arrangements for the round, will provide worthwhile and attractive opportunities for the industry to extend its exploration for oil and gas reserves on the United Kingdom shelf.