UK Energy Minister Brian Wilson has announced a new type of license designed to increase the amount of oil and gas activity in the North Sea.
The promote license is being launched, along with the traditional production license, as part of the 21st offshore licensing round.
Under the promote license, the rental fee will be cut by 90% for the first two years, compared to the rate for a traditional exploration and development license, giving smaller newcomers the opportunity to find oil and gas.
Promote will give the holder time to assess the license area for oil and gas before promoting their asset to investors to finance the cost of drilling and undertaking a commitment to do further work.
"Making the most of our North Sea resources remains a high priority, and the UK continental shelf still has much to offer," said Wilson. "The promote license will bring down barriers to exploration and ensure that the UK's valuable hydrocarbons are exploited to their maximum potential. From the interest shown from the industry and the geoscientific community during the promote consultation, I am confident the 21st licensing round will be a clear success."
The format for the promote license was developed following an industry-wide consultation in late 2002, to which over 60 companies and organizations responded.
While arrangements for traditional licenses remain unchanged, a promote license will lapse after two years unless a substantive work program – normally the drilling of a well – is agreed.
The new promote license does not apply to onshore exploration and development.