The U.K. Department of Trade & Industry (DTI) expects to begin discussions soon with Britain's offshore operators over relinquishment of fallow blocks to enable them to be reoffered for exploration.
Speaking at the publication of the 1996 "Brown Book," DTI's annual status report on Britain's oil and gas activity, Energy Minister Tim Eggar said there are 146 U.K. blocks where no work has been conducted for at least 6 years.
The Brown Book reported a banner year for U.K. upstream activity.
"Our objective is to reduce the number of fallow blocks to single figures," Eggar said. "We are looking for cooperation from the industry to hand back blocks where no exploration is planned or to carry out activity which may currently have relatively low priority."
Eggar said about 25% of Britain's offshore blocks have no activity at present. He cited recent successes on older blocks in the Gulf of Mexico to show what can be done in a mature offshore province.
He said, "We can already cite several U.K. examples where one company has drilled on a block and found nothing, and other companies have come along later with a different interpretation of seismic data and made a discovery."
The fallow blocks are spread throughout U.K. waters and mainly consist of acreage awarded in ninth and 10th licensing rounds of 1984-85 and 1986-87.
The Brown Book shows 1995 was a record year for the U.K. oil and gas industry with:
Eggar said unit costs of producing oil continue to fall, and improved access to infrastructure will assist in driving down unit production costs even further.
The Brown Book lists the average cost for a barrel of oil from U.K.'s producing fields as 10.50/bbl ($16.17/bbl), while unit cost of fields under development is estimated at an average 8.50/bbl ($13.09/bbl).
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