Residents criticise oil regulator over management of South Downs drilling licence


Photo: Markwells Wood Watch

Villagers opposed to drilling for oil in a remote part of the South Downs have accused regulators of a lack of robustness in handling the licence near their homes.

They say the Oil & Gas Authority (OGA), which controls the hydrocarbon licensing system, allowed an area north east of Portsmouth to move into the prized production phase without the usual requirements.

In response to a freedom of information request, the OGA said:

“In converting to 2014 Model clauses, the OGA used our discretion to allow the licence [for PEDL126] into the Production Term, which will expire on 30/06/2034.”

The licence area of PEDL126 covers an area of about 5.5km by 2km between Petersfield and Emsworth on the West Sussex-Hampshire border.


PEDL126 on the West Sussex-Hampshire border. Source: UK Onshore Geophysical Library

The licence operator, UK Oil & Gas (UKOG), now has the authority to produce oil from the area, subject to planning permission and consent from the Environment Agency.

UKOG has a well site in PEDL126 at Markwells Wood, but no work has been carried out there since 2011.

Markwells Wood Watch, a residents’ group established to oppose production plans at the site, has now called on the government to block the licence.

The group said:

“Markwells Wood Watch is very concerned by the Oil and Gas Authority’s management of PEDL126 as evidenced in recent freedom of information requests.

“It appears that the OGA have not been robust in their examination of the history of the site nor the phases and requirements before passing it into production phase.”

DrillOrDrop asked the OGA under which legislation it was able to use its discretion to move licences into production. The OGA, now a government company in which the Energy Secretary is the sole shareholder, chose to treat the question as another freedom of information request. This post will be updated with the OGA’s response.


Markwells Wood wellsite. Photo: DrillOrDrop

What the licence rules say

Onshore oil and gas licences usually have three stages: initial (also called exploration), second (also called appraisal) and third (or production).

According to OGA licence rules, the licence will expire after the initial phase, usually five years, unless the operator has completed the agreed work programme and surrendered part of the licence area.

At the end of the second phase, the licence will expire unless the OGA has approved a development plan.

What happened in PEDL126

Documents released under the FOI response reveal that PEDL126 had two extensions to its first phase and two extensions to the second phase.

PEDL126 documents released under FOI request (pdf)

On 28 June 2016, a document from the OGA stated that the production phase would begin on 30 June 2016. UKOG would keep the whole of the licence, known as the retention area. The work programme for the production phase required UKOG to submit a Field Development Plan by 30 June 2017.

Two weeks later, however, UKOG asked the OGA to change the work programme.

On 27 July 2016, the OGA agreed to new licence arrangements. The licence area of PEDL126 remained the same but under the “retention area plan” UKOG committed to submit a planning application by 31 December 2016, drill a horizontal well by 30 June 2020 and submit the Markwells Wood Field Development Plan by 30 June 2021.

In its FOI response, the OGA said:

“A Retention Area Work Plan replaced the requirement for an approved Field Development Plan required at the end of the Second Term of the licence in 2016.”

UKOG submitted a planning application in September 2016 for new wells, testing and production at Markwells Wood. But the application was never determined.

On 2 May 2017, the South Downs National Park Authority announced that UKOG had withdrawn the application. The Environment Agency and Portsmouth Water had objected to the plans because of the risk to groundwater. DrillOrDrop report

UKOG said it would submit a revised application by the end of 2017. But as the year closed, UKOG had not told its investors that it had submitted an application for Markwells Wood and none had been published by the South Downs National Park Authority.

“Licence should be terminated”

In response to the OGA’s decision over PEDL126, Markwells Wood Watch said it was:

“requesting that the Secretary of State for Energy, Greg Clark, terminate the Retention Area Plan due to UKOGs non-compliance with its Work Programme.”

The group said:

“The water in our area is some of the most pure in England. It is our biggest asset and no risk is acceptable.  We have been arguing for the restoration of the site since September 2016 and will continue our campaign until the well is properly abandoned and the site is fully restored.”

Timeline of extensions for PEDL126 and Markwells Wood

Source: PEDL126 documents released under FOI request (pdf), FOI response and planning application register

1 July 2003

PEDL126 commenced for an Initial Term of six years expiring 30 June 2009

19 June 2007

West Sussex County Council validates planning application n (SO/3152/07) from Northern Petroleum for a temporary hydrocarbon exploration site

10 March 2009

Deed of variation to extend Initial Term of PEDL126 licence to seven years to expire 30 June 2010; Second Term to be four years (expiring 30 June 2014) and production phase for a maximum of 20 years (2034)

22 April 2010

Deed of variation to extend Initial Term of PEDL126 licence to eight years to expire 30 June 2011; Second Term to be three years (expiring 30 June 2014)

21 November 2010

Northern Petroleum announces Markwells Wood-1 well spudded at 15.00 hours

7 September 2011

Northern Petroleum announces extended well test at Markwells Wood-1

23 January 2013

West Sussex County Council issues a decision notice approving the application WSCC/011/12/SO/SDNP for an extension of planning permission until 31 March 2013

22 November 2013

South Downs National Park Authority approves extension of planning permission for another two years until 31 March 2015

23 June 2014

Deed of variation to extend Second Term of PEDL126 licence to four years to expire on 30 June 2015; production phase reduced from 20 to 19 years (expiring 30 June 2034)

20 October 2014

UKOG completes acquisition of Northern Petroleum’s UK interests including PEDL126

13 April 2015

UKOG announces it has bought the 40% stake in PEDL126 held by Magellan Petroleum UK

7 May 2015

Deed of variation to extend Second Term of PEDL126 licence to five years to expire on 30 June 2016; production phase reduced from 19 to 18 years (expiring 30 June 2034).

14 October 2015

South Downs National Park Authority grants extension of planning permission until 31 September 2016

20 May 2016

UKOG asks the OGA to create a Retention Area for PEDL126

28 June 2016

Deed of variation states the production period is the period of 18 years beginning on the day after the Second Term ends (30 June 2016) and expiring 30 June 2034

29 June 2016

Letter from OGA to UKOG approves the proposed retention area: the entire licenced area of PEDL126.  The retention area plan is to submit a Field Development Plan for Markwells Wood-1 discovery by 30 June 2017.

11 July 2016

UKOG asks the OGA to modify the Work Programme for the Retention Area of PEDL126, created on 29 June 2016

27 July 2016

Letter from OGA to UKOG responding to request for modification to Work Programme for the Retention Area created on 29 June 2016. Geographic area of the retention area is the entire licenced area of PEDL126. The expiry date is 30 June 2021. The Retention Area Plan is to submit a planning application for an appraisal well by 31 December 2016, drill a horizontal well by 30 June 2020 and submit Markwells Wood Field Development Plan by 30 June 2021.

20 September 2016

South Downs National Park Authority validates application for a sidetrack well off Markwells Wood-1, three new hydrocarbon wells, a water injection well, flow testing and production for 20 years

2 May 2017

South Downs National Park Authority announces UKOG has withdrawn planning application. Environment Agency and Portsmouth Water had objected to plans because of risk to groundwater

16 October 2017

UKOG said it would resubmit a new planning application by the end of 2017 DrillOrDrop report

31 December 2017

UKOG has not reported to its shareholders that it has submitted a planning application for Markwells Wood and no application has been published by the South Downs National Park Authority

17 replies »

  1. UKOG likes to write the rules, change safety protocols and move from one project to another. Haven’t seen much oil produced and despite public opposition the Government appears to be supporting this polluting industry instead of protecting our water supplies and investing in clean, safe renewables. Happy New Year everyone, let’s bring back logic this year.

  2. Disgusting but what else do you expect from this filthy company ? UKOG are a plague on the country , the sooner they are removed the better.

    • If there is as much oil in the area as they say then I am afraid its too valuable to be left in situ. A few thousand NIMBIES wont stop development that’s for sure. Get used to what’s coming.

  3. The UK ‘is not on track to meet the fourth (2023 to 2027) – [carbon budget:51% below 1990 levels by 2025].

    To meet future carbon budgets and the 80% target for 2050, the UK will need to reduce emissions by at least 3% a year, from now on. This will require the government to apply more challenging measures.’

    The expiration date for PEDL 126 of 30/06/2034 would appear to be in contradiction of the carbon reduction target of 57% by 2030 and ultimately the 80% target for 2050 as agreed in the governments’s own ‘robust’ regulation, the Climate Change Act 2008

  4. Indeed Rachel.
    Best to ignore the Giggle brigade who do not seem to understand that one litre of UK oil replacing one litre of imported oil actually REDUCES carbon emissions. So, the real answer is to produce a higher proportion of UK gas and oil consumption within the UK, regardless of any other changes to the energy mix. Might also mean energy bills ease back from the double digit price increase suffered by the UK domestic consumer last year.

  5. And wind turbines being removed in Cumbria following local opposition to them “industrialising” the countryside. Another missed piece of info. John, together with the slaughter of bats and birds.
    Good to see you have maintained your record into 2018 of selecting info. which immediately highlights the areas you have ignored. Not sure how proposing more on shore wind farms, where the majority of the public in the areas concerned are against them, is likely to gain any wide support but then, the motivation is to excite the anti oil/gas sector than convince any others.

    Tesla have proven nothing of the sort, by the way. Where will the lithium/cobalt come from for any sizeable scale? Where will the granite blocks come from for the Swansea lagoon? Inconvenient little details and no one will bother thinking about that-but they will, and they do back in the real world.

  6. Makes a change somebody speaking the truth here, Martin C. The other big benefits from indigenous energy resources are –
    1 Huge positive impact on the UK balance of trade account, presently in unsustainable deficit.
    2 Petroleum revenue tax paid on every barrel extracted
    3 Corporation tax paid by UK based operators
    4 Employment, both direct and indirect resulting in income tax, NICs and consumer spending all increasing in the local area
    5 Keeping the money and the jobs in the UK rather than exporting our money and our jobs (see 4 above)
    6 Reduction in dependence of overseas feedstock for downstream refining and petrochemical production
    7 Repatriation of downstream industries on a large scale back to the UK (as in USA, and refer to 4, 5 and 6 above)

    • ‘The other big benefits from indigenous energy resources’

      Like our North Sea which employs 375,000, is far cheaper to produce than onshore shale, and has 20 billion barrels of reserves.

      It is good to see production is up for the last 3 years running, extraction costs are down, and recent tax breaks and Government funded offshore seismic studies will see new investment.

      I presume we all agree we should not be exporting indigenous UK North sea oil and gas and should be using it ourselves to reduce import needs

  7. Ahh Fred, you raise the tax reference. Remember most of the antis are unfamiliar with the concept!

    And, by the way, the water purity bit is nonsense. An area with huge sales of water softeners for a very good reason. If anyone wants to make their fortune, open a kettle/shampoo salesroom in the area. Repeat customers on a very regular basis.

  8. Good that you know all the costs of UK shale gas production John-or could it be that it is speculation? The latter, as no gas has been produced and until it has all “costs” are simply speculation, or fabrication.
    Yes, I agree with most of your last sentence but the argument if applied to the North Sea should equally be applied to the UK land mass. Indeed, in ecological risk terms, even more so. Don’t be so worried about your North Sea investments John, I’m sure they can keep going even with production on shore. Exporting? Well, it just depends on the type of product UK reserves produce and type of product UK consumption requires. If you look at individual UK refineries and the product they utilise it is quite clear.

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