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Gold/Mining/Energy : ATP Oil & Gas (ATPG): An E&P Co. Without Any "E" -- Ignore unavailable to you. Want to Upgrade?

To: Ed Ajootian who wrote (6)	5/6/2003 7:56:11 AM
From: Ed Ajootian	Read Replies (1) \| Respond to of 35

Dow Jones Business News UK Government, Oil Companies Move To Ease Entry Into North Sea Monday May 5, 7:16 pm ET LONDON -(Dow Jones)- The U.K. government and oil companies that own North Sea assets have agreed to a new commercial and legal framework to cut red tape and speed up asset sales to new entrants to the basin, the U.K. Offshore Operators Association said Tuesday. The companies and the U.K.'s Department of Trade and Industry have agreed on a new "Master Deed," that will reduce the amount of paperwork and time needed to process a transaction. As a part of the new arrangement, oil companies have agreed to shorten the amount of time they have to pre-empt the sale of stakes in joint venture assets in which they are partners. The government is keen to encourage development of the U.K. North Sea's waning oil and gas resources. Smaller independent oil companies are eager to take up declining assets from their bigger peers, such as BP PLC and Royal Dutch/ Shell Group (RD, SC). The bigger companies are often happy to sell off these so-called legacy assets to improve returns by reducing operating costs and freeing up capital for investment in other projects offering better profit margins. "As the U.K. Continental Shelf (oil and gas resource) matures, it is becoming increasingly important to promote access to the remaining exploration and development opportunities," said Bruce Dingwall, chief executive of Venture Production and president of UKOOA. Venture is one of the smaller oil companies making its money by snapping up these one-time bountiful oil and natural gas fields that the bigger players have let run down. "Implementation of the Master Deed will cut through red tape and speed up asset sales, reducing legal and administrative costs," Dingwall said. BP lawyer, John C. Skipper, who helped put the new arrangements together, said every time an asset transfer is made, there could be as many as 100 agreements that go with it, and all the parties and partners in an asset have to sign these. "It becomes quite a tedious process," he said, adding that under the Master Deed, only the buyer, seller and an attorney representing the other parties would be involved in the transfer paperwork. He said the attorney would come from LOGIC, an Aberdeen-based organization that promotes industry competitiveness. LOGIC has been appointed to execute agreements under the Master Deed by UKCS Administrator Ltd., a newly created subsidiary of UKOOA that will administer the scheme. As part of the Master Deed arrangement, the DTI and the oil companies agreed to cut the amount of time partners in a joint venture asset have to exercise their preemption rights in the sale of a stake to 30 days. This new arrangement applies only to cash sales. When one partner agrees to the sale of its stake in an oil field or other asset, it often must first go to the other partners, who then have the right to pre-empt the sale, meaning the existing partners would absorb the stake that is up for sale, instead of it going to the new entrant. Preemption provisions give partners up to 90 days to decide if they want to pre-empt a proposed sale, which is a long time for the smaller, cost-conscious companies aiming to quickly snap up stakes in assets and ramp up production. UKOOA said the first major deal to use the new Master Deed transfer arrangement is the February sale by BP of its southern North Sea gas assets to France's Perenco, for $162 million in cash. -By Mark Long, Dow Jones Newswires; +44 (0)20 7842 9356; mark.long@dowjones.com