'Nippon Oil acquires North Sea oil/gas rights'

Tokyo, Feb 3: Nippon Oil Corp., Japan's biggest oil refiner,has acquired stakes in six oil and natural gas blocks in the North Sea,a financial daily said on Saturday.

The Nikkei said Nippon Oil, which bid as part of a consortiumcomprising British and U.S. companies, was awarded the rights by theBritish government on Friday.

Nippon Oil would own 30 percent of the rights in four blocks whereit will explore for oil and gas on its own. Its share of licenses inthe remaining two fields total 17 percent, the Nikkei said.

While there was no cost to acquire the rights, Nippon Oil isrequired to conduct underwater drilling at two of the blocks, whichwould result in costs totalling round 5 billion yen ( million), thepaper said.

Nippon Oil will decide whether the reserves are large enough tocarry out commercial production after studying the geology of thesurrounding areas, the Nikkei said.

Company officials could not be reached for comment.

Gas fields near the four blocks where Nippon Oil will conductexploration are already producing 100,000 barrels of natural gas a day,the Nikkei said Nippon Oil has been accelerating the development of oiland gas fields amid expectations that crude oil prices will remain athigh levels. It aims to produce 30,000 barrels per day (bpd) of crudeoil and natural gas from the North Sea, the Nikkei said.

It plans to boost overall production of oil and gas equivalent to 180,000 bpd.

Reuters>