Angus Energy announced today it has submitted proposals to produce oil from Kimmeridge rocks at its Brockham site near Dorking in Surrey.
The company made a statement to investors this morning repeating its position that it had planning permission for both a sidetrack drilled in January and future production from it.
But today Surrey County Council stood by its previous statements that Angus needed to apply for planning permission to produce from the sidetrack and that the company had breached planning consents when it drilled the well.
The dispute, now in its second month, has angered councillors, investors and opponents of the Brockham operation.
It has also raised questions about the regulation of the onshore oil and gas industry.
There appear to be disagreements between the company and the council about the definitions of a well, what constitutes development and what is covered by the various planning permissions at the site.
The company today appeared to blame “a mislabelling” of a wellhead for any “perceived misunderstanding” about permissions at the site.
Managing Director, Paul Vonk, said in the statement:
“Angus have drilled the Brockham–X4Z well [the sidetrack] in a fully authorised manner under the planning permissions already granted and in existance [sic] and with full approvals necessary by the relevant governing authorities.”
But this contradicts what appears to be advice given to Angus representatives during a meeting with council officers in March. A note of that meeting, which emerged this week following a freedom of information request, shows the council clearly stating that Angus did not have planning permission for the sidetrack and that it needed to make a retrospective application.
Both sides have instructed barristers to advise them. If the council’s view prevails it will raise questions about whether the Oil & Gas Authority (OGA) should have authorised drilling the sidetrack.
DrillOrDrop invited Angus to comment on the dispute but has received no response. This post will be updated with any company comment.
DrillOrDrop also asked the OGA how the difference between the two sides would be resolved. This post will be updated with the organisation’s response.
What Angus said in its statement
The company said today
- It had submitted a required addendum to the Oil & Gas Authority (OGA) for the field development plan for Brockham
- It drilled the sidetrack BR-X4z from its well BR-X4 (also known as well number 3)
- A mismatch of well numbering in what is described as “prior administrative paperwork” provided to the company caused confusion at Brockham
- Because of this, it appeared during the preparation phase for operations at the site earlier this year that the company was re-entering the original Brockham-X1 well, not BR-X4
Angus said a Queen’s Counsel had advised that BR-X4 had planning permission until 2036 and the sidetrack BR-X4z was authorised by a permission granted in 2006.
The company said:
“It should be noted, that a sidetrack is a component of a drilled well. It is not a well and cannot be created or exist independent of the actual well.”
“No new well was drilled nor were any operations conducted into any different geological formations, at a deeper depth or in any undrilled area.”
The statement continues:
“Upon OGA approval, the company plans to put this well into production as soon as possible.”
The Angus share price closed up 20.83% on the day, at 10.88p.
David Lenigas, who has shares in the Brockham oil field, tweeted:
“Exciting times ahead for new UK oil production”
What the council told Angus
A council spokesperson said today:
“Surrey County Council’s view remains that Angus breached planning laws. Discussions are continuing between the council and the company. Angus has indicated it is not going to apply for retrospective planning permission.”
The council’s position on planning permission at Brockham has remained unchanged since early March, when four senior council officers met two representatives of Angus.
Notes of this meeting, on 8 March, were released by the council yesterday following a freedom of information request.
In response to the request, the council said it had not taken any formal enforcement action against Angus Energy but had sought the advice of legal counsel and awaited this to inform further action.
According to the notes, the council’s planning team leader, Alan Stones, told the Angus planning consultant and solicitor:
“There is now a side track where there is no permission for drilling or production”.
Mr Stones is reported to have said that Angus had “blotted its copy book” and the council was “very unhappy”. He said Angus was required to make a retrospective planning application for the side track.
According to the meeting notes, Mr Stones said
“[Council] Members & Officers very unhappy with outcome. Nevertheless, retrospective permission would be appropriate response given planning policy for site.
“Chair of Planning and Regulatory Committee wishes to write to OGA (Oil and Gas Authority) regarding the site and the actions of AE.”
In the notes, the two sides refer to two separate planning permissions for the site. One permission, reference number MO06/1294, allowed for oil production until 2036. A second permission, reference MO07/0161, was granted in 2006 for exploration at the BR-X4 well.
According to the notes, Peter Brady, Angus’s solicitor, said “working of the site as a whole approved until 2036”.
But Mr Stones, for the council, said planning permission MO06/1294 related only to wells BRX1 and BRX2.
He is quoted as saying:
“The sidetrack relates to BRX4 and therefore needs to be a fresh planning application and permission dealing with the sidetrack and production from it.”
Mr Stones said the planning permission to drill the BR-X4 well (MO07/0161) had a time limit (condition 4) which required the development to cease on or before 31 December 2008 and all buildings, plant and machinery to be removed. This permission was for exploration only and would not cover production.
The notes show Mr Brady was concerned that if Angus Energy made an application the council might refuse it. Against his initials are the following notes:
“Need to understand why going off underground requires separate planning permission”.
“Originally you granted planning permission eg MO06/1294. The permission for well head, I can’t find anything to say the borehole must go down in a straight line or to an alignment.”
“Nothing on planning permission which says why it should go if the borehole may meander off”
Mr Stones is said to have answered:
“That is a new act and a therefore [sic] a separate item of development”
Angus’s planning consultant, Mark Oldridge, said the company wanted to produce.
Mr Stones, according to the notes, said:
“You are required to make an application to deal with it (the side track) retrospectively and an application to produce as well.”
Mr Brady said he didn’t understand why this was needed.
Angus was told the BRX4 well did not exist when the planning permission for production was granted.
Mr Stones continued:
“We need you (AE) to give an unequivocal agreement not to do anything without the relevant permission. Angus has blotted it’s copy book and there will be great public criticism.”
Mr Oldridge offered to write a “detail under condition” letter, rather than a full planning application.
Mr Stones said this would have to be before, not after, work had been carried out. His is quoted as saying:
“The Authority is very unhappy that the proper planning process hasn’t been followed. It is not helpful for the public”.
Two days after the meeting, Angus issued an official statement to investors advising them the company “was of the firm opinion” that drilling the sidetrack BR-X4Z did not breach planning consents.