To ask the Secretary of State for Energy what is his policy on farm-in proposals for oil and gas exploration and production licences; and if he will make a statement.
Transfers of interest in petroleum licences, which are commonly known as farm-ins, are commercial transactions and, as such, the arrangements are initially a matter for the companies concerned.Under the terms of petroleum licences, such transactions also need prior consent. Like my predecessors, I believe that farm-ins have the potential to benefit United Kingdom oil and gas exploitation. They enable companies operating on the United Kingdom continental shelf to make what they regard as timely and desirable adjustments to their holdings of licence interests and they are of particular importance to those independents which wish to increase the scale and pace of their participation in exploration and development activity.In examining farm-in proposals, I shall continue to seek to ensure that the purpose for which licences have been granted—that is the thorough and efficient exploration and exploitation of the nation's oil and gas reserves—is fully safeguarded by the transactions. It is the policy and practice of my Department to consider each application on its merits. In advising me, the Department will in particular consider: