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The Oil and Gas Authority (OGA) has confirmed that 27 onshore blocks from the 14th Onshore Oil and Gas licensing round will be formally offered to companies in what will be a major boost for the UK’s fracking sector.
Among the companies offered new licenses are UK shale development firms Cuadrilla, IGas and Ineos Shale.
Cuadrilla, which has been offered two new licenses in Yorkshire, said that, while it continues to progress its shale gas exploration work in Lancashire, it “welcomes the potential” for exploration in Yorkshire along with the “associated benefits of new jobs and economic growth we believe it will bring”.
Chief executive Francis Egan said the firm’s first priority will be to “talk with local communities”, as some members of the public will “have concerns” about onshore shale exploration.
IGas has been offered a total of six new licences in Lincolnshire and the East Midlands.
Chief executive Stephen Bowler said the company is “delighted” with the new licence offers which “further increase our oil and gas operations onshore”.
“This licensing round is important in realising the significant opportunity to produce home-grown oil and gas and help secure Britain’s energy needs for the future,” he added.
Gary Haywood, chief executive of Ineos Shale, which has been offered three new licenses in the East Midlands, said: “Shale gas is a once in a lifetime opportunity that the UK cannot afford to miss. North Sea oil created great wealth for the UK and Shale gas can do the same.
“It will help secure manufacturing, deliver investment and create thousands of jobs, provide us with greater energy security, and help us to meet our climate change obligations using our own home-grown source of energy.”
OGA chief executive Andy Samuel said: “With almost 100 applications received, the 14th Onshore Round has attracted significant interest and high-quality proposed work programmes from a range oil and gas companies.
“Today’s announcement regarding the offer of 27 blocks gives those successful companies assurance about the blocks that they will be formally offered later in the year.”
OGA will announce offers for a second group of 132 further licence blocks later in the year, subject to further environmental assessment under the Conservation of Habitats and Species Regulations 2010.
However, despite industry’s enthusiastic response to today’s news, the industry still faces significant challenges in getting projects off the ground. Many UK projects have recently been blocked by councils and public support is at an all time low.
In spite of this, government confirmed earlier this month that shale gas planning applications will be fast-tracked through a new, dedicated planning process, which will include measures to ensure planning call-ins and appeals involving shale applications are prioritised by the Planning Inspectorate.
The Energy Networks Association (ENA) has told Utility Week the gas distribution networks will “be on hand” to help facilitate shale gas, “if policy makers decide to pursue this source of gas”.
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