Government finally confirms licensing round for more North Sea projects
The Government has confirmed its support for a new oil and gas licensing round, which is expected to be launched by the North Sea Transition Authority (NSTA) in early October.
The new round is expected to lead to over 100 new licences, as previously announced by the Prime Minister, forming part of the government’s plans to accelerate domestic energy supply.
This follows the confirmation of the Climate Compatibility Checkpoint, which establishes the environmental criteria for oil and gas exploration.
The NSTA is now expected to make a number of new ‘blocks’ of the UK Continental Shelf available, for applicants to bid for licences.
These licences will enable developers to search for commercially viable oil and gas sources, although developers will still need to seek regulatory approval for any activities conducted within their licensed area, such as drilling and construction of infrastructure.
The announcement of a fresh licensing round follows the unveiling of the Energy Security Strategy earlier this year, which included a vast ramp up of North Sea oil and gas generation.
In a report published earlier this month, North Sea body Offshore Energies UK (OEUK) cited fresh data from the NSTA suggesting as much as 15bn barrels of oil could still be salvaged from the UK’s continental shelf with more exploration.
This is almost double the reserves – 8bn barrels – previously forecast by the authorities.
Industry body welcomes North Sea boost
OEUK has welcomed the latest licensing round and the confirmation of environmental requirements for new projects.
Mike Tholen, OEUK’s acting chief executive, argued that further exploration was vital as the UK relies on gas and oil for 75 per cent of its total energy.
He said: “Producing our own energy cleanly gives us more control over our own economy and makes us less dependent on other countries.. That is always important but never more so than now when we face a global crisis over energy supplies. We need to move to a low carbon future but that will take decades – during which we will need continuing supplies of gas and oil.”
Tholen stressed that the industry had to uncover new oil and gas resources simply to maintain production at current levels – with the North Sea providing nearly half the UK’s fossil fuel supplies.
“We need new exploration and production licences so that we can find those reserves. Delays in issuing licences could lead to reduced gas and oil production – and that would damage our energy security,” he concluded.
The announcement for a new licensing round comes alongside the Government’s announcement to lift the moratorium on fracking, reflecting an increased emphasis on domestic energy production following Russia’s invasion of Ukraine in February.
Business and Energy Secretary Jacob Rees-Mogg said: “In light of Putin’s illegal invasion of Ukraine and weaponisation of energy, strengthening our energy security is an absolute priority, and – as the Prime Minister said – we are going to ensure the UK is a net energy exporter by 2040.
To get there we will need to explore all avenues available to us through solar, wind, oil and gas production – so it’s right that we’ve lifted the pause to realise any potential sources of domestic gas.”