Green consultation to clear UK licensing round

The way should soon be cleared for the long-delayed 19th licensing round in the UK North Sea following yesterday's announcement by Energy Minister Helen Liddell of a 3-month consultation into the potential environmental impact of oil and gas exploration on the highly prospective 'White Zone' between the Shetland and Faroe Islands.


Darius Snieckus
OGJ Online

LONDON�The way should soon be cleared for the long-delayed 19th licensing round in the UK North Sea following yesterday's announcement by Energy Minister Helen Liddell of a 3-month consultation into the potential environmental impact of oil and gas exploration on the highly prospective 'White Zone' between the Shetland and Faroe Islands.

Liddell, responding to a parliamentary question, said a formal invitation would only be made to oil companies to bid for acreage in this deepwater area off the north coast of Scotland once she had "hear[d] the view of the public and experts" on what effect E&P activities would have on the area's wildlife and marine species.

She added that the outcome of this consultation process would determine whether Britain's New Labour government might "impose conditions on the licenses or withhold areas on offer."

"For the first time, the Department [of Trade & Industry (DTI)] has commissioned and published an independent Strategic Environmental Assessment of the White Zone, the surrounding area, and the possible oil and gas impacts on it," said Liddell. "The consultation asks for views on draft regulations applying the [European Union's (EU)] Habitats Directive, which requires the protection of certain species and habitats, to offshore oil and gas activities."

"These proposals mark a further major improvement to the transparency of our environmental and licensing regimes," she added.

Liddell stressed the government's intention of balancing the "importance [being] placed on protecting marine habitats and species" against "provid[ing] further opportunities for petroleum exploration on the UK Continental Shelf.

Awards of 19th round licences could now come as early as the first quarter of next year, according to the DTI.

"Maintaining oil and gas discoveries over the coming years is vital if we are to sustain an important industry and benefit the UK economy," Liddell emphasized.

Last November, the High Court declared that the EU's Habitats Directive applied not just to Britain's territorial waters but as far as 200 miles offshore. It further ruled that the DTI could not grant exploration licenses in the North East Atlantic in the upcoming 19th round "without first considering and applying the provisions of the Directive."

The UK Offshore Operators Association (UKOOA) "warmly welcomed" Liddell's announcement as "helping to remove the uncertainty surrounding development of the North East Atlantic as a potential future source of oil and gas to maintain [UK] energy supply and protect the 270,00 employed by the industry."

"This area represents a significant opportunity of hydrocarbon exploration and is one in which the UK offshore oil and gas industry has already invested heavily in state-of-the-art seismics," stated UKOOA Director General James May.

"Despite the area's complex geology and its challenging water depths and weather conditions, there is considerable interest from operators, particularly as the North Sea enters maturity," he added.

May highlighted that the UK offshore industry had been taking its role in protecting the marine environment "very seriously," exemplified by the �5 million in research aimed at improving "scientific knowledge of the Atlantic to the northwest of Scotland" carried out via its Atlantic Frontier Environmental Network.

According to UKOOA data, nearly 150 exploration and appraisal wells have been drilled over the last 25 years in the North Atlantic, an area estimated to hold some 1.5 billion bbl of recoverable oil reserves.

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