The programmes will give producers access to improved, lower cost technologies to keep thousands of domestic oil wells from shutting down.

"We are determined to enhance our energy security by keeping our domestic oil fields in production," said US energy secretary Bill Richardson. "There may be specific situations where improved technologies can spell the difference between continued production or premature shut-in," he said.

The threat of abandoning well it growing as oil prices dropped to their lowest levels since the 1930s when adjusted for inflation. US oil production has fallen to levels not seen since the 1950s.

The DOE is restarting a programme begun in 1992 to encourage producers to test and adopt new technologies for prolonging the life of ageing oil fields. Earlier projects under the programme createdadvanced imaging techniques for finding oil and expanded the use of horizontal drilling.

The $18 million initiative is open to both light and heavy oil producers, including those operating in Alaska.

Under the programme, the DOE will pay for 35 per cent of the costs associated with between 10 and 20 projects, which could last up to six years. Proposals are due from producers on May 20.

The second programme will target as much as $1 million to small operators with less than 50 employees to focus on solving specific oil field production problems.

The Department will award financial assistance in chunks of $75,000 or less for each project lasting from six months to two years. The money will have to be matched by oil producers.

The DOE will accept proposals from small producers under the programme by four closing dates this year: March 31, May 31, Aug. 30 and Nov. 30.

Both programmes are part of an package of initiatives the DOE will announce this week to help producers respond to the impacts of lowoil prices on domestic production. Last week, the DOE said it would allow oil companies to begin turning over a portion of the crude oil they drill on federal lands as royalty payments, instead of making cash payments. In the process, the Department said it hopes to add 28 million barrels of oil to the nation's Strategic Petroleum Reserve to help maintain an adequate supply of emergency oil.