Category: United Kingdom

There is a “serious and urgent risk” that parts of the North Sea oil industry will be abandoned unless energy companies join forces to become more efficient, the man in charge of reviving the sector has warned. Andy Samuel, the head of the new Oil and Gas Authority, told the Financial Times that companies need to fundamentally change some of their working practices if they are to keep parts of the lifeline of the Scottish economy alive. Companies have been struggling for the past 14 months with a low oil price, which has plunged more than 50 per cent since last June and now sits around $50 a barrel. In response, the government has offered companies a range of new tax breaks, but has also urged the industry to work together, appointing Mr Samuel to oversee that process . He warned that there could be a “domino effect”, where […]

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Royal Dutch Shell Plc It’s the cheapest opportunity in six years to be a shareholder in Europe’s largest oil and gas company. BG Group Plc, the oil and gas producer Royal Dutch Shell Plc agreed to buy for about $70 billion, is trading at a price equivalent to paying just over 14 pounds ($21.53) for a Shell B share, according to data compiled by Bloomberg. That would be the lowest valuation for Shell since the global recession of 2009 and a discount of 13 percent to the company’s current share price. Investing in BG “would be the cheapest way into Shell, if you’re taking the view that the deal is going to go through,” said Philip Lawlor, a strategist at Smith & Williamson Investment Management LLP in London, which oversees about $24 billion of investments including in Shell and BG. The outlook for the oil market has deteriorated since […]

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British shale company Cuadrilla Resources awarded new acreage for fledgling campaign in the country. Photo by photostock77/Shutterstock LONDON, Aug. 19 (UPI) — British shale natural gas pioneer Cuadrilla Resources said it was awarded two new licenses to explore the reserve potential in Yorkshire. Cuadrilla secured licenses to explore around 750 square miles of combined land in Yorkshire . During the next year, the company said most of the activity would consist of "desktop studies" that will give the company a better idea of the geology and reserve potential. "While we continue to progress our shale gas exploration work in Lancashire, we welcome the potential for exploration in Yorkshire along with the associated benefits of new jobs and economic growth we believe it will bring," Cuadrilla Chief Executive Officer Francis Egan said in a statement. The British Geological Survey started a baseline environmental survey in Yorkshire last week. Third Energy […]

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British government reviewing potential onshore leases in an effort to accelerate shale oil and gas development. Photo by David Gaylor/Shutterstock LONDON, Aug. 18 (UPI) — With a potential for growth in the fledgling shale sector, the British government said Tuesday it was expecting bidders for new onshore oil and gas acreage. "As part of our long-term plan to build a more resilient economy, create jobs and deliver secure energy supplies, we continue to back our onshore oil and gas industry and the safe development of shale gas in the U.K.," British Energy Minister Nick Bourne said in a statement. More than 100 sites could be available after review of environmental consultation laws. The industry’s regulator, Oil and Gas Authority, said around two dozen of those were formally on the auction block already. The government cautioned that no licenses were issued. Instead, the companies behind the 27 sites released will […]

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Sign up for quick access to a wealth of global business news, including: BP fights to blow away gas market rigging case Newspaper + Premium online Newspaper + Premium online Premium Full FT.com subscription Premium Full FT.com subscription Standard Full news & archive Standard Full news & archive Trial Try Premium online Trial Try Premium online Price Monthly Annual $66.30 $11.77 per week $53.00 $9.25 per week $36.00 $6.45 per week $1.00 for 4 weeks $1.00 for 4 weeks FT Alphaville plus selected FT blogs yes yes yes yes Unlimited FT.com article access yes yes yes yes Unlimited mobile and tablet access yes yes yes yes Unlimited fast FT yes yes yes yes 5 year company financials archive yes yes yes yes The LEX column yes yes no yes ePaper access yes yes no yes Three exclusive weekly emails yes yes no yes Daily newspaper delivery yes no no […]

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Baseline studies set for Lancashire, where industry pioneers are looking to begin British shale gas campaign. Photo courtesy of the British Geological Survey. LONDON, Aug. 13 (UPI) — The British government said Thursday it plans to fast-track the permit process for shale oil and gas exploration to ensure the industry can gain traction. Shale oil and gas exploration is in its infancy in a country looking to reduce its dependency on foreign reserves. The British Geological Survey estimated shale basins in the country may hold more than 1.3 quadrillion cubic feet of natural gas, a level the government said could help an economy with natural gas imports on pace to increase from 45 percent of demand in 2011 to 76 percent by 2030. The British government said Thursday it was calling on local councils to decide on shale permits within 16 weeks of an application. "To ensure we get […]

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A person looks out towards an offshore gas platform operated by Statoil ASA in the North Sea. Photographer: Kristian Helgesen/Bloomberg The North Sea was thought to be the prime example of how the oil price slump hurt high-cost corners of the energy industry. Yet its crude output is defying the doomsayers. After an increase last year, the region’s production will rise again in 2015 to almost 3 million barrels a day, the first consecutive annual gains in 15 years, the International Energy Agency said Wednesday. The extra supply is entering a global market already “awash” with competing grades of oil, it said. The impact will be felt across the world because the North Sea — home of the Brent benchmark — plays an outsized role in the oil market. Even small gains in the region’s output can move prices significantly, according to consultant Energy Aspects Ltd. Production gains resulted […]

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Bob Dudley’s BP seeks to breath new life into North Sea developments with major investment announcement. File photo by Roger L. Wollenberg/UPI LONDON, Aug. 5 (UPI) — Though the global energy sector is crimping available revenue streams, BP said Wednesday it planned billions of dollars of spending in the North Sea. "These are challenging times for the industry and we are having to make hard choices," BP North Sea Regional President Trevor Garlick said in an emailed statement. "Nonetheless, we remain committed to improving the competitiveness of the North Sea and to maximizing economic recovery from our fields." BP in a quarterly earnings report released last week said it lost $5.8 billion, which in part was a reflection of the July 2 settlement reached to resolve claims associated with the oil spill in the Gulf of Mexico in 2010. The British company said it earned $228 million from oil […]

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BP fell to a loss in the second quarter. LONDON— BP BP -1.42 % PLC on Tuesday swung to a loss in the second quarter, as earnings were hit by lower oil prices and a multibillion-dollar charge relating to the deal it reached earlier this month to settle U.S. federal and state claims over the 2010 Deepwater Horizon disaster. The U.K. oil giant said its replacement cost loss—a number analogous to the net income that U.S. oil companies report—was $6.27 billion, compared with a profit of $3.18 billion a year earlier. The sharp decline includes a $9.8 billion pretax charge that BP recorded as part of an $18.7 billion agreement with the U.S. government and five states to settle legal claims relating to its Deepwater Horizon fatal oil spill in the Gulf of Mexico. The net charge recorded by the company for nonoperating items amounted to $7.5 billion. It […]

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BP Plc reported the lowest quarterly profit in at least 10 years after a boom in trading faded and the conflict in Libya forced almost $600 million of writedowns. Profit adjusted for one-time items and inventory changes dropped to $1.3 billion in the second quarter, 64 percent lower than a year earlier, the London-based company said Tuesday in a statement. That missed the $1.7 billion average estimate of 17 analysts surveyed by Bloomberg. “I am confident that positioning BP for a period of weaker prices is the right course to take” The weaker-than-expected results pile pressure on Chief Executive Officer Bob Dudley to cut capital spending to maintain dividends. The company is no longer benefiting from the strong trading that added about $350 million to profit in the first quarter, while a halt to operations in Libya eroded earnings from oil and gas exploration. “The miss is primarily because […]

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An offshore oil rig in the North Sea. Photo by I. Newton/Wikimedia LONDON, July 27 (UPI) — The United Kingdom Oil and Gas Authority (OGA) announced 41 new licenses Monday to explore the U.K. Continental Shelf in the North Sea. An additional 134 licenses were awarded in November 2014. The total of 175 licenses makes the round of applications among the largest since the licensing process began in 1964. "The U.K. Continental Shelf remains a world-class hydrocarbon province where significant resources and economic value remain to be realized. The good level of interest in the 28th round highlights the continued attractiveness of the U.K.’s oil and gas resources. Licenses are, however, just a start and industry, government and the OGA now need to work together to revitalize exploration activity across the basin and convert licenses into successful exploration wells," OGA Chief Executive Andy Samuels said in a statement Monday. […]

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Oil firms trying to sell aging North Sea oilfields are considering shouldering hundreds of millions of dollars in future dismantling costs to help find buyers, industry sources say.  One of Continue Reading

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A section of the BP Eastern Trough Area Project (ETAP) oil platform is seen in the North Sea, around 100 miles east of Aberdeen in Scotland February 24, 2014. Low oil prices have tightened the screws on some of the most depleted and costly oilfields in Britain’s North Sea, forcing operators to cease production earlier than planned and adding to fears of a domino effect in mature areas. For years North Sea producers have delayed expensive decommissioning projects, supported by high oil prices that have helped paper over soaring operating costs. But with oil prices halving over the last 12 months, some companies are faced with the unenviable choice of operating at a loss during a field’s twilight years, or limiting losses by bringing decommissioning forwards. Unsurprisingly, the industry is looking at the second option very closely. "It’s a sign that many of the meetings I’m going to, the […]

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Traffic concerns cause delays for fledgling shale campaign by pioneering company, Cuadrilla Resources. File photo by Gary C. Caskey/UPI PRESTON, England, June 26 (UPI) — A British shale pioneer said it was "disappointed but not surprised" a local council denied its permit to explore for oil and gas using hydraulic fracturing. Lancashire County council members voted to refuse a permit to Cuadrilla Resources to use hydraulic fracturing in the Roseacre Wood site in the region. The members said the work would have "an unacceptable and potentially severe impact" on road infrastructure and traffic itself. Cuadrilla in a statement said it was committed to exploring the area safely, noting it was considering an appeal to the council’s decision. "We are disappointed but not surprised that Lancashire County Council’s development control committee has denied planning consent for our application at Roseacre Wood," the company said. The company said its proposal included […]

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British fracking campaign takes preliminary steps, though local county council rejects some work on traffic concerns. File Photo by Gary C. Caskey/UPI PRESTON, England, June 15 (UPI) — A British county council at the center of the country’s fledgling hydraulic fracturing sector gave partial support Monday to shale pioneer Caudrilla Resources. Caudrilla Resources aims to target shale natural gas reserves in Lancashire County. The region’s council said Monday it recommended approval for a campaign with as many as four drilling sites and hydraulic fracturing. The recommendation was subject to restrictions ranging from hours of work to noise pollution. A second application was recommended for refusal because of the potential for an increase in traffic on the rural highway network. Caudrilla in a statement said it was pleased with the council’s decision, though expressed frustration that efforts to satisfy local concerns were not recognized. "We will await the councilors’ decisions […]

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Mid-life crisis for North Sea oil and gas operators as crude oil markets limp through the year, survey finds. File Photo by UPI/Shutterstock/num_skyman ABERDEEN, Scotland, June 11 (UPI) — Most oil and gas companies working in the North Sea canceled projects and about half have cut staff because of the weak oil market, a survey found. The Aberdeen & Grampian Chamber of Commerce, in partnership with law firm Bond Dickinson, said 67 percent of the companies working in the North Sea have been forced to shelve projects and half have been forced to cut staff in the depressed crude oil market. "Confidence levels are at an all-time low and we are now experiencing our first ‘recession of confidence’, and it looks gloomy in the year ahead too," James Bream, policy director for the chamber of commerce, said in a statement. The price for Brent crude oil, a North Sea […]

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Investors backed off sterling, cuddled up to the dollar and consigned the yen to a new 12-year low as a raft of construction and manufacturing indicators drove market sentiment at Continue Reading

By Alex MacDonald LONDON–Circle Oil PLC (COP.LN) said Monday it swung to a net loss last year due to exploration writeoffs and a significantly lower oil price, which prompted the company to review its cost base and consider selling stakes in assets to fund operations. The U.K.-listed oil and gas explorer, which has interests in Morocco, Tunisia, and Egypt, reported a net loss of $54 million for the year ending Dec 31, 2014 compared with a net profit of $29 million in the same period a year earlier. This reflected a 9% drop in revenue to $85 million largely due to lower oil prices and exploration write offs of $57 million largely focused in Oman and Tunsia. It also recorded a $14 million impairment charge on its NW Gemsa permit in Egypt. In Morocco, gross gas production was 6.46 million cubic feet per day, broadly similar to last year, […]

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Shift issues for oil and gas workers in the North Sea prompt vote for labor stoppage from unions. Photo by James Jones Jr./Shutterstock LONDON, May 21 (UPI) — British North Sea oil and gas workers said they’ll vote on a labor stoppage after talks broke down with the industry over working conditions. Trade unions Unite and GMB said talks broke down with industry group Offshore Contracts Association on changes to working conditions in the North Sea. Union officials had said there were safety concerns about shift lengths. GMB National Officer David Hulse said in a statement Thursday some progress was made in recent talks with industry representatives, but not enough to resolve the dispute . "We remain available for talks should the employers want to pull back from going ahead with the unilateral changes to working practices that has provoked this dispute," he said. In March, Hulse said there […]

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KUALA LUMPUR May 19 (Clyde Russell is a Reuters columnist. The views expressed are his own). There is a widespread assumption that weak commodity prices are likely to spark a wave of merger and acquisition activity as stronger companies seek to buy assets on the cheap. The $70 billion buyout of BG Plc by larger rival Royal Dutch Shell is generally viewed by investors and analysts as the first big deal in a likely series of major mergers and acquisitions in the resource sector. After all, the last time commodity prices fell sharply, around 15 years ago, there was a rash of mega-mergers, such as Exxon with Mobil and Conoco with Phillips in the energy space, and BHP with Billiton and Rio Tinto’s purchase of Alcan. Notwithstanding the Shell-BG deal, it appears executives may be more cautious this time around, eschewing mega-mergers in favor of smaller acquisitions and in-house […]

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LONDON—The U.K.’s new energy secretary, Amber Rudd, drew praise from both the oil-and-gas industry and green lobby groups ahead of decisions on the nuclear industry and hydraulic fracturing that other nations will be watching. The appointment of Ms. Rudd, a former parliamentary undersecretary at the Department of Energy and Climate Change, was announced Monday by U.K. Prime Minister David Cameron , who was elected last week with an outright majority. Ms. Rudd is likely to be presiding over the startup of the U.K.’s first fracking operations since 2011 when the government called a moratorium on the controversial technique after tiny earth tremors were detected near a site in northwest England. Protests and local opposition have slowed fracking in the U.K. where only a handful of exploration wells have been drilled and just one well has been fracked. While much of the department’s work is done on creating regulations for […]

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BG Group’s QCLNG terminal, Curtis Island, Queensland, Australia. Company posts production gains from Australia and Brazil, but still keen on acquisition bid from Shell. Photo courtesy: BG Group LONDON, May 8 (UPI) — BG Group said Friday it mirrored its peers by posting a drop in core earning but an increase in production, though it was still keen on Shell’s acquisition. British energy company BG Group said earnings for the first quarter were down 41 percent to $1.6 billion. Oil prices fell by about half from the June highs above the $100 per barrel market during the first quarter, squeezing profits for most energy companies. Revenue from upstream operations, the exploration and production side of the energy sector, was hardest hit for BG Group , though the company said actual production increased during the first quarter. Total production for the British company increased by 1 percent, though from its […]

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LONDON Britain’s BG Group said on Friday it was happy with Shell’s $70 billion takeover bid despite a recent upturn in oil prices that led the company to increase the profit outlook for its liquefied natural gas (LNG) business. A near 20 percent rise in crude prices since Shell made its bid for BG on April 8 has raised concerns investors may question the valuation. "There is no change to our view on the offer," said BG Chief Executive Helge Lund on his first results conference call since taking the reins in early February, only weeks before Shell made its takeover offer. BG’s first-quarter results, however, also showed how deeply the drop in oil prices early this year had hit its business as it reported a 41 percent drop in core earnings to $1.6 billion from $2.7 billion the same time last year. The company’s revenue and other income […]

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* Capex reduced by more than $2 billion * Decision on Majnoon development pushed back to 2017 * CFO says refining margins already worsening Shell said Thursday it had reduced its expected 2015 capital expenditure to $33 billion from previous guidance of a little more than $35 billion as the company continues to adjust its business to the lower oil-price environment. Shell, releasing its first-quarter results, also said it continued to reduce its operating costs and capital spending, with Q1 operating expenditure down by $1.1 billion year on year. Speaking to reporters on a conference call, CFO Simon Henry said the capex this year would be $33 billion, or "potentially less," a reduction of at least $2 billion compared with guidance given by Shell three months ago. Article continues below… Platts 8th Annual Global Crude Oil Summit sets a unique global agenda, inviting industry leaders to share views on […]

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LONDON (Reuters) – Oil major BP said it will gradually sell throughout 2015 more than $1.25 billion of oil it had stored earlier this year to seize on a futures market structure to boost profit. Traders including BP bought and stored oil throughout late 2014 and early 2015 after an oil price collapse as prompt prices dropped below those for further into the future, a market structure known as contango. Traders have been profiting from the contango by storing crude in the hope of reselling it at a profit at a later date or by simply locking gains via paper trading. Chief Financial Officer Brian Gilvary said BP’s trading unit had performed much better than in an average quarter, likening the quarter to a strong trading performance in early 2009 when crude prices last crashed. "The profit we booked in one quarter for contango is relatively modest, in the […]

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British energy company BP starts drilling in deep waters west of Shetland Islands, part of a seven-year commitment to regional developments. (UPI/Shutterstock/James Jones Jr.) LONDON, April 29 (UPI) — British energy company BP said Wednesday it was marking the start of a campaign west of the Shetland Islands with deepwater drilling in the Loyal oil field. BP is working as the operator at the Loyal field on behalf of its partners at Royal Dutch Shell and Austrian energy company OMV using the Deepsea Aberdeen rig. BP President for North Sea operations Trevor Garlick said the start of drilling marks an "important milestone" for regional operations . The British company said five wells are planned in the area. First oil is expected by the end of 2016 and will be moved to a new floating, production, storage and offload vessel. BP, which has been the focus of potential takeover rumors […]

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Christopher Adams, Energy Editor Enter your email address Select an access level You may also be interested in our corporate or newspaper only subscriptions.

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LONDON (Reuters) – Britain’s warning to potential suitors of BP is a sign of the oil major’s vulnerability to a takeover bid and that a more politically palatable tie-up with Royal Dutch Shell no longer seems to be an option, banking and industry sources said. Despite championing a laissez-faire policy towards takeover deals, Britain has always had a special interest in BP, dating back to the creation of the company via an unusual government investment master-minded by Winston Churchill. But in the past when the company has looked vulnerable, there was always the prospect that Anglo-British peer Shell could act as a "white knight" and agree to a merger deal that would preserve British interests. With Shell now tied up with a $70 billion takeover of BG, that seems much less likely, prompting the outgoing British government to break cover and say it would oppose any bid for BP. […]

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ENLARGE A section of the BP Eastern Trough Area Project (ETAP) oil platform is seen in the North Sea, around 100 miles east of Aberdeen, Scotland. BP reported a fall in first-quarter profit on Tuesday. Photo: Reuters LONDON— BP PLC on Tuesday reported a fall in first-quarter profit from a year earlier, giving the first glimpse of how low oil prices through the beginning of 2015 affected the world’s biggest oil companies. BP’s replacement-cost profit—a number similar to the net income that U.S. oil companies report—was $2.1 billion, down from $3.48 billion a year earlier. Revenue fell to $54.9 billion from $75.1 billion from a year earlier. Production for the quarter was 8.3% higher than the first quarter of 2014 at 2.31 billion barrels of oil equivalent a day. “Looking ahead, we expect second-quarter 2015 reported production to be lower than the first quarter, reflecting significant seasonal turnaround and […]

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Pilita Clark, Environment Correspondent Enter your email address Select an access level You may also be interested in our corporate or newspaper only subscriptions.

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ENLARGE The U.K. government told BP it would intervene to prevent any foreign takeover of the oil company. Photo: NICK ANSELL/ZUMA PRESS LONDON—The U.K. government told BP PLC that it would oppose any potential foreign takeover of the company because it wants the oil giant to remain a British company with global clout. With a market cap of more than $132 billion, BP would be a huge takeover target—and a big bite for even its largest rivals. But amid today’s low oil prices, speculation has swirled over possible deal making. Earlier this month, Royal Dutch Shell PLC reached a deal to buy UK-based BG Group PLC for some $70 billion. A British government official said Sunday that the U.K. government told BP it would intervene to prevent any foreign takeover bid of BP, one of the world’s biggest oil companies. It would also seek to prevent a takeover from […]

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Local council in United Kingdom delays decisions on fledgling shale gas campaign until June. File Photo by UPI/Gary C. Caskey. PRESTON, England, April 24 (UPI) — A local council at the center of a fledgling shale natural gas program in the United Kingdom said it needed more time to review planning applications. Cuadrilla Resources estimates there may be as much as 200 trillion cubic feet of shale natural gas in Lancashire. The Lancashire County Council recommended rejecting the companies’ drilling applications, though Caudrilla in January was given more time to address concerns about noise pollution and traffic in the area. The county council said it opted to move the decision on operations at two sites in the region to June 30. "The extension follows a request by Cuadrilla to consider additional information about the applications," the council said in a Thursday statement. An initial decision was expected by April […]

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Gatwick has promised to ‘bear all the main risks’ of an expansion programme The tiny oil and gas explorer which last week claimed to have found a world class oilfield near Gatwick airport has clarified its expectations of the deposit, saying the hydrocarbons cannot yet be considered prospective. UK Oil & Gas Investments on April 9 said it had discovered a “world-class potential resource” after drilling into the Weald Basin at Horse Hill in Surrey and finding 158m barrels of oil per square mile. David Lenigas , chairman of UKOG, said last week the whole basin could contain “multiple billion barrels”. But on Wednesday, UKOG said in a statement that the oil in place “should not be considered as either contingent or prospective resources or reserves”. Contingent resources are those considered potentially recoverable but not yet mature enough for commercial development. “Further development work in the form of appraisal […]

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