By July 27, 2016 Read More →

New British oil and gas licences offered amid exploration drought

British oil and gas

British oil and gas exploration is expected to fall to its lowest point in 45 years as energy companies scale back due to low oil prices.  BBC.com photo.

Rental fees cut by 90 per cent to attract interest in British oil and gas leases

LONDON, July 27 (Reuters) – England has cut rental fees by up to 90 percent in its latest tender for British oil and gas licences in the North Sea launched on Wednesday in a bid to attract companies to find new fields in the mature basin.

Companies will now be able to apply for cheaper and more flexible licences to gain access to 1,261 blocks by Oct. 26, followed by licence awards to be issued by the Oil and Gas Authority (OGA) at a later date.

The hunt for new oil and gas fields in the British part of the North Sea is expected to fall to the lowest in 45 years this year as energy companies have scaled back exploration budgets due to weak oil prices.

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Despite being an old basin, Britain’s North Sea is estimated to have billions of barrels left for extraction, worth around 200 billion pounds ($262.56 billion) to British government coffers.

The latest licensing round, the 29th, offers access to new areas in the Rockall Trough, the mid-North Sea High and East Shetland, which were subject to a government-funded seismic testing campaign earlier this year.

“We recognise that market conditions are currently very difficult but nevertheless we have a shared goal of making the basin as attractive as possible for exploration,” Andy Samuel, chief executive of the OGA, said.

The Oil and Gas Authority’s contract changes will reduce licence rental fees in some cases by up to 90 percent per square kilometre and allow explorers more flexibility in terms of when they can carry out certain work programmes.

Companies which obtained licences in last year’s bumper 28th licensing round, Britain’s biggest ever, included Shell and Eni.

(Reporting by Karolin Schaps. Editing by Jane Merriman)

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