A community group has given notice that it is planning a legal challenge to the extension of an oil and gas exploration licence in West Sussex.
Keep Kirdford and Wisborough Green, which successfully opposed plans for exploratory drilling by Celtique Energie in 2014, has sent a legal letter to the Oil and Gas Authority, the organisation responsible for licences.
The letter argues that the Oil and Gas Authority (OGA) breached regulations when it granted an extension of two years to the initial term of Petroleum Exploration and Development Licence PEDL234.
The group is seeking a judicial review of the decision and is calling for the extension to be quashed.
PEDL234, originally granted in 2008, includes the potential well site at Broadford Bridge near Billingshurst.
The well should have been drilled under the work programme agreed for the initial term of the licence.
But although the site was constructed, the well was not drilled. The then licence holders, Magellan Petroleum UK Ltd and Celtique Energie, were involved in a legal dispute about funding the well.
The initial term should have expired on 30 June 2016 and the licence relinquished because the work programme had not been completed.
But on 13 June 2016, UK Oil & Gas Investments PLC (UKOG) announced it was paying £3.5m to acquire 100% of PEDL 234. The deal, including operation of the Broadford Bridge site, was conditional on the OGA extending the initial term of the licence for at least one year to allow the well to be drilled. DrillOrDrop report
Campaigners from Keep Kirdford and Wisborough Green (KKWG) and other local groups objected to the then Department of Energy and Climate Change and the OGA. They said it would inappropriate for UKOG to be “singled out for preferential treatment”. DrillOrDrop report
On 1 July 2016, the OGA announced that the initial term of PEDL234 had been extended for one year. A week later, the OGA’s online information was updated to show that the extension was for two years. DrillOrDrop report
“Breach of regulations”
Keep Kirdford and Wisborough Green (KKWG), represented by the Environmental Law Foundation, argues that the extension breached the Hydrocarbons Licensing Directive Regulations 1995.
Clause 6(2)a of the regulations allows the Secretary of State to extend a licence only where “the terms and conditions of the licence permit an extension of the term”.
Clause 6(2)b allows a licence to be extended only if “the licensee has performed its obligations in accordance with the terms and conditions of the licence”.
The group argues that the terms and conditions of PEDL234 did not permit an extension of the initial term. The extension had therefore been granted without any power to do so within the licence.
In the Letter Before Action, the Environmental Law Foundation said:
“The breach of regulation 6(2) of the 1995 Regs has major implications both with respect to the environment and fair competition between different petroleum entities.
“Restrictions on the circumstances in which a licence can be extended are important for ensuring that (a) adverse environmental consequences of the licenced activities can be carefully controlled by the Secretary of State, and (b) a licenced area is not given exclusively and indefinitely to one licensee, thereby depriving other entities of opportunities to compete.”
The letter continued:
“The Secretary of State is requested to agree to consent to an order from the High Court of Justice, upon application by KKWG for judicial review, quashing PEDL 234 as extended in breach of regulation 6(2) of the 1995 Regs.”
KKWG is also seeking information from the OGA about PEDL234, the extension and the reasons for it.
- A judicial review has to be approved by the High Court before the case can be heard.