Tuesday 6 September 2005

“HIGHLY ATTRACTIVE ROUND” GIVES BOOST TO UKCS FUTURE

Welcoming today's record licence awards in the 23rd Licensing Round, UK Offshore Operators Association (UKOOA), the representative organisation for oil and gas producers in the UK, said that the news was highly encouraging for the future of the North Sea.

Malcolm Webb, UKOOA's chief executive, said: "The 23rd Licensing Round offered the widest range of opportunities in many years for companies wanting to explore for oil and gas in the UK continental shelf.  It included new areas that have not been available for some time, as well as a considerable amount of "recycled acreage", freed up by industry government cooperation on the "fallow" initiative to stimulate activity on dormant assets. 

"These fresh opportunities, along with the three different types of licence on offer, made this Round highly attractive to investors, resulting in a record number of companies applying for - and being granted - exploration blocks, including many newcomers.   This is very welcome news for the UK offshore oil and gas industry and is a sign of the success of Government and industry efforts to create an environment into which people want to invest.

"Initiatives such as those to provide better access to data, acreage and existing offshore platform and pipeline infrastructure support our joint aim to keep the UK a major centre for oil and gas activity for many years to come. 

"With up to 28 billion barrels of oil and gas to recover, it is crucial that the UK maintains a competitive environment that is conducive to investment and will allow us to maximise recovery of our indigenous oil and gas reserves."

Ends

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NOTE TO EDITORS

1. The UK Offshore Operators Association (UKOOA) is the representative organisation for oil and gas companies licensed by the UK government to explore for and produce hydrocarbons offshore around the British Isles.  It has 33 members.

2. UK oil and gas production The UK produced 725 million barrels of oil (2 million barrels per day) and 95 billion m3 of gas (259 million m3 per day) in 2004.  The UK ranks ninth in the top ten global producers with total production of 3.6 million barrels of oil equivalent (boe) per day.  Production in 2005 is expected to be around 3.4 million boe per day.

3. Investment the UK offshore oil and gas industry spent £4.7 billion in 2004 on operations and £3.7 billion on exploration and capital expenditure.  It expects to invest £5 billion on operations and more than £4 billion on exploration and capital developments in 2005.  The industry has invested a total of £220 billion (2004 prices) in exploration and capital development since offshore activity began in the 1960s.  Since 1999, 34 new companies have been attracted to invest and produce in the UK continental shelf.  These companies have grown to account for 10 percent of production and 26 percent of total capital expenditure in the basin.

4. Tax the industry paid over £5 billion in direct taxation in 2004.   North Sea revenues for 2005/6 are forecast at £7 billion but this could rise to as much as £10 billion under the current oil prices.  Tax contributions made by North Sea operating companies over the last four decades amount to £203 billion (2004 prices).

5. Employment the UK offshore industry provides employment for 260,000 people, about a third of whom are in Scotland.