UK Delays in Announcing Successful Applicants in 14th Licensing Round for Companies Looking for Onshore Oil and Gas

July 02nd 2015

In a somewhat controversial move the UK government announced on the 28th July 2014 that it was accepting applications in its 14th Landward Licensing Round. This was the first onshore oil and gas licensing round in six years. Bids for this closed on 28th October 2014 and it is reported that there were over 95 applications.

The government defended its position in opening this round claiming that this will create more jobs and ensure the long-term economic and energy security of the UK. This decision came amid worries regarding the UK’s increasing dependence on energy imports. However, they have been protests claiming that the government is only looking to rake in some quick cash and is not giving enough consideration to the environment.

It was only at the end of 2012 that the UK allowed the use of hydraulic fracturing to be used to release gas and to date of the small amount of wells in the UK that have been drilled only one has been actually been fracked. Consequently as Britain is only in the early stages of exploring for shale gas using these techniques and it is contended by some that not enough is known about its affects to the environment at this point and we should monitor the existing exploration before granting more licenses. It is said that a large portion of the applications were in connection to the shale although the licensing did include conventional oil and gas.

Reports stated that the successful applicants would be announced prior to the general election, but this later changed that successful bids will not be made public till after the general election. Recent speculation has stated that the reason for this delay may be down to the new Infrastructure Act which will mean new regulations on fracking possibly making fracking forbidden in some of the blocks on offer, however the Department of Energy and Climate Change have stated that this new law makes no difference as the regulations pertain to permission to drill and not licenses for exploration.

It should be noted however, that even if an application for license is accepted this does not automatically grant permission to drill. Oil and Gas companies will then need to obtain planning permission, environmental permits and health and safety approvals before proceeding. The UK has strict regulations in place to protect on-site safety, prevent water contamination, and alleviate seismic activity and air pollution.