ARCO British Ltd. has won exploration licenses for two sought-after blocks in U.K.'s West of Shetland area after a bidding battle.
Their desirability stems from an announcement by BP Exploration Operating Co. Ltd. of a discovery, named Suilven, on adjacent Block 204/19, that reportedly involves a potentially commercial volume of hydrocarbons.
Following the strike, BP applied to U.K. Department of Trade and Industry (DTI) to have Blocks 204/14 and 204/15 designated for licensing out of round (OGJ, Mar. 10, 1997, p. 31).
Suilven discovery is thought to extend north into Block 204/14, and this block and adjacent 204/15 are thought to contain a number of prospects. However, BP's bid to secure these was foiled by ARCO.
John Battle, science, energy, and industry minister, said: "We received six very strong applications for these blocks. All six met the award criteria, but the work program submitted by the ARCO consortium offers the best scheme for timely and thorough exploration of the full range of prospects in both blocks."
ARCO plans to drill two exploratory wells on Block 204/14 during 1998. License interests in the two blocks are: operator ARCO 32.5%, Conoco (U.K.) Ltd. 32.5%, British-Borneo Oil & Gas Ltd. 17.5%, and Ranger Oil (U.K.) Ltd. 17.5%.
Danish claims
DTI added that after applications for the licenses had been received, the Danish government announced it might lay claim to a small part of the northwest corner of Block 204/14.DTI said U.K. has no doubts about its sovereign right to the license block, but the Danish and Faroese governments have disputed for years the sea boundary between the U.K. and the Faroe Islands.
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