Tuesday 8 May 2001

19th Round Decision Opens Door for New Investment says UKOOA

James May, director general of the UK Offshore Operators Association (UKOOA), the representative body for oil and gas offshore exploration and production companies in the UK, welcomes the governments provisional announcement of the 19th Round licence awards today (8 May 2001) and said:

"Todays provisional announcement is a boost for the offshore oil and gas industry and will open the door for fresh investment in the UK continental shelf (UKCS). The licence areas, located to the north west of Scotland in the Atlantic Margin, represent a significant opportunity for new hydrocarbon exploration. The industry is optimistic that these areas hold the potential to extend the life of the UKs offshore industry as fields in the North Sea decline, preserving jobs, supporting local economies and maintaining an indigenous energy supply for the nation.

"Operating in the Atlantic Margin brings challenges," he adds. "Water depths are amongst the deepest to be found around the British Isles (up to 5600 feet/1700 metres). Weather conditions can be extreme and the geology of the underlying rock complex. However, technology in the industry is constantly evolving to overcome these physical difficulties to produce oil and gas safely, economically and with proper regard to the protection of the environment."

Note to Editors

1. The UK Offshore Operators Association (UKOOA) is the representative organisation for the UK offshore oil and gas industry. Its 32 members are licensed by the British Government to explore for and produce hydrocarbons in UK waters.

2. The Industry has been active in the waters of the Atlantic Margin to the north west of Scotland for over 25 years. To date, around 150 exploration wells have been drilled and three oil fields are already in production (Foinaven, Schiehallion and Loyal), with plans to develop a fourth (Claire) due to come onstream by 2004.

3. The area is estimated to hold 1.5 billion barrels of potentially recoverable reserves of oil, the equivalent of 5% of all UK oil discoveries to date.

4. The offshore oil and gas industry has been taking steps to protect marine habitats for many years. A strict environmental protection regulatory framework (around 200 different sets of regulation in total) is already in place to control offshore activities throughout the whole of UK territorial waters.

5. The Industry, through the Atlantic Frontier Environmental Network (AFEN) has invested around £5 million in research to enhance scientific understanding of the Atlantic Margin environment and improve industry practices. More information about this research programme can be found on the UKOOA website at www.oilandgas.org.uk/issues.

6. The formal award of licences in the 19th Round is expected to be made when the regulations bringing the Habitats and Birds Directives into effect come into force at the end of May 2001.

7. The UK offshore oil and gas industry currently supports 270,000 jobs across the UK. It has contributed £170 billion (2000 prices) to the Treasury in taxes since the 1970s, and accounts for around 84 percent of UK primary energy production. It has invested some £190 billion (2000 prices) in exploration and production in the UK since the mid-1960s.

For more information, please call 020 7802 2400.