The UK’s Oil & Gas Authority (OGA) announced Tuesday that an initial tranche of 27 blocks are being formally offered to companies involved in shale gas exploration in the country’s 14th Onshore Oil and Gas Licensing Round.
Launched on July 28, 2014, the 14th Onshore Oil and Gas Licensing Round includes acreage in Scotland, England and Wales. The licensing round closed on October 28, 2014 and a total of 95 applications were received from 47 companies covering 295 blocks.
The OGA is expected to announce offers for a second tranche of 132 further license blocks later in the year as part of the same licensing round. Licenses for all offered blocks will then be granted after the terms and conditions have been finalized.
OGA Chief Executive Andy Samuel commented in a statement:
“With almost 100 applications received, the 14th Onshore Round has attracted significant interest and high-quality proposed work programs from a range of 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.”
UK Onshore Oil and Gas (UKOOG) Chief Executive Ken Cronin welcomed the news of the block awards, highlighting the benefits of onshore exploration to the UK.
“Over 2,000 onshore oil and gas wells have been drilled in the UK, and 120 are currently operational, yet few people realize these sites are even there. The opportunity exists to create tens of thousands of jobs, reduce imports, generate significant tax revenue and support British manufacturing from an extremely small footprint which will benefit the environment at the same time. Research from the IoD [Institute of Directors] shows that as few as 100 shale gas sites, each the size of only two football pitches, could reduce the UK’s import dependency by half,” Cronin said in a UKOOG statement.
“We welcome the strong support from the industry with an increased number of licenses applied for and offered and welcome new players into the UK industry for the first time…The offers of these licenses and the continued support from government are critical in developing a genuine UK based energy mix for this country and today’s announcement is a significant move in helping us to reduce CO2 emissions.”
UK Energy Minister Lord Bourne added in a government statement:
“As part of our long-term plan to build a more resilient economy, create jobs and deliver secure energy supplies, we continue to back our onshore oil and gas industry and the safe development of shale gas in the UK. This is why the OGA has moved quickly to confirm the winners of license blocks which do not need further environmental assessment. Keeping the lights on and powering the economy is not negotiable, and these industries will play a key part in providing secure and reliable energy to UK homes and businesses for decades to come.
“It’s important we press on and get shale moving, while maintaining strong environmental controls. Investment in shale could reach $51 billion and support 64,000 jobs creating financial security for hardworking people and their families, whilst providing a cost-efficient bridge to lower-carbon energy use.”
Companies that have been awarded blocks in the latest licensing round include IGas, which has been offered six new licenses covering seven blocks, and Cuadrilla Resources, which has been offered two. France’s GDF Suez has been awarded one block.