UK Awards 159 Onshore Blocks in Latest Licensing Round

Britain Awards More Shale Gas Licenses
Britain awarded another 132 new onshore oil and gas exploration licenses, giving developers access to more land for shale gas fracking for the first time in seven years.

The UK’s oil and gas regulator, Oil & Gas Authority (OGA), announced Thursday that 159 onshore blocks under the 14th Onshore Oil and Gas Licensing Round have now been formally offered to successful applicants.

Around 75 percent of the 159 blocks offered, which are incorporated into 93 onshore licenses, relate to unconventional shale oil or gas. The OGA announced in August that an initial tranche of 27 blocks were being formally offered to companies involved in shale gas exploration in the country's latest licensing round. Launched July 28, 2014, the 14th Onshore Oil and Gas Round includes acreage in Scotland, England and Wales. It closed October 28, 2014 and a total of 95 applications were received from 47 companies covering 295 blocks.

Commenting on the licensing development, OGA Chief Executive Andy Samuel said in an OGA statement:

“I am pleased that the 14th Onshore Round attracted strong interest and a high quality of proposed work programs. This round enables a significant amount of the UK’s shale prospects to be taken forward to be explored and tested.

“Upon acceptance of these offers, applicants will be issued with licenses and will be able to begin planning their future strategies for exploration activities. These will be subject to further local planning, safety, environmental and other authorizations.”

Energy Minister Andrea Leadsom said in a UK government statement:

“Last month we set out the vital role gas will play in the UK’s transition to a low-carbon future. The licenses offered today move us a step closer - driving forwards this industry which will provide secure, home grown energy to hardworking families and businesses for decades to come.

“Alongside conventional drilling sites, we need to get shale gas moving. As the Task Force for Shale Gas report found earlier this week, with the right standards in place fracking can take place safely. Now is the time to press ahead and get exploration underway so that we can determine how much shale gas there is and how much we can use.”

UKOOG, the representative body for UK onshore oil and gas, welcomed the announcement made today by the Oil and Gas Authority.

Ken Cronin, chief executive of UKOOG, commented in a UKOOG statement:

“This is a vital day for the future of energy in the UK. At the beginning of this century, we were energy independent producing enough oil and gas from the North Sea to provide for everyone in the UK. Today we are dependent for nearly 50 percent of our oil and gas from overseas and that is going to rise to over 75 percent in the next 15 years without further onshore production.

“Our industry has been under the most intense regulatory, public and parliamentary scrutiny over the last few years. It is clear that we have an extremely robust regulatory system and an industry willing to work within that. It is also vital that we ensure that the local communities we work in, know what we are doing and why we are doing it and benefit from it too.”

The UK's offshore oil and gas industry representative body, Oil & Gas UK, was also supportive of the development. Oil & Gas UK Operations Director Oonagh Werngren, commented in an organization statement:

"Energy security must remain of paramount importance to the UK, and the natural gas we discover today, both onshore and offshore, will play a key role in powering our future economy.

"We welcome today's news that 159 onshore blocks have been formally offered to successful applicants. We believe this progress is consistent with industry, regulator and government efforts towards maximizing economic recovery of our indigenous resources - benefitting the entire country.

"As onshore activities expand, the opportunity for businesses in the UK's world-class offshore oil and gas supply chain to diversify will also grow. We look forward to working with colleagues across the industry to develop and deliver the expertise the onshore industry will need to thrive."

The OGA’s announcement follows a vote by British lawmakers Wednesday in favor of the use of fracking to extract shale gas under national parks.

A graduate in journalism from Cardiff University, Andreas has eight years of experience as a business journalist. Email Andreas at andreas.exarheas@rigzone.com

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