Regulation

Oil and gas companies keep 12 licences despite failing on drilling commitments

PEDL162 OGA

A dozen onshore oil and gas licences, including one in Scotland, have been extended even though the operators have not met commitments to drill an exploration well.

The Oil and Gas Authority (OGA) has extended seven licences in England. For some this is their fourth extension. These licences include one in Cheshire which was the subject of an unsuccessful court challenge to a previous extension (details). The extensions are between six months and four years.

The OGA also appears to have extended four licences in Wales even though the Welsh Government assumes responsibility for licensing in under four months. These extensions are all for two years.

The Scottish Government has extended a licence held by Ineos and Reach Coal Seam Gas in the Central Belt. These companies failed last month in their attempt to sue the Scottish Government over its fracking policy (details).

PEDL189

Extract from OGA online database for PEDL189

The extensions are controversial among anti-drilling campaigners because the oil and gas companies involved had a commitment to drill a well to keep the licence. In none of the 12 licences had the companies complied with the condition. Only two licences where no well was drilled appear to have been relinquished.

DrillOrDrop asked the OGA why the English licences had been extended when the operators had not met the conditions. The OGA said:

“In each of these examples, extension of the licence term rather than licence expiry was considered the most appropriate way forward.”

On the four extended Welsh licences, which become the responsibility of the Welsh Government in October, the OGA told us:

“Until such time as the Welsh Government assumes responsibility for the licences in Wales, the OGA remains responsible for licensing policy and decision making.”

In Scotland, where the Scottish Government is responsible for licensing, there was a campaign to strip Ineos and Reach of their licence (details here and here). Correspondence from the Scottish Government sent to a campaigner today shows that this licence has been extended for another year.

Licences, terms and conditions

A Weekend Long Read on DrillOrDrop explained that oil and gas Production Exploration and Development Licences, known as PEDLs, are divided into three phases or terms.

In the initial exploration phase, the operator is required drill at least one well to keep the licence.

If the operator met this commitment it would normally move on to the second appraisal term.

If it met the conditions in the second stage, it would move on to the third production term.

Expiry dates

PEDL235

PEDL235 (in yellow) in West Sussex.Map: UK Onshore Geophysical Library

A group of PEDLs issued in 2008 were due to see their initial term end on 30 June 2018. They had already had their initial term extended from what would have been the normal expiry date of 2014.

Another PEDL issued in 2004 has also seen its initial term extended several times, most recently to 30 September 2018.

In none of these PEDLs has the operator drilled a well. But data on the OGA website shows that they have all had their initial term extended

PEDL189
Upton, Chester, Cheshire
IGas Plc
Initial term extended to 30/06/2022 (confirmed in May 2018)

PEDL235
Godley Bridge, West Sussex
Star Energy Weald Basin Ltd (IGas)
Initial term extended to 30/06/2021

PEDL143
Leith Hill
Europa
Initial term extended to 30/09/2020
This PEDL was granted in 2004 but no well has been drilled

Leith Hill eviction 170621 Dan Harvey 3

Anti-drilling protests outside the proposed but undrilled oil exploration site near Leith Hill in PEDL143. Photo:  Dan Harvey

PEDL214
Swansea, Wales
UK Methane Ltd
Initial term extended to 30/06/2020

pedl215

PEDL215 in South Wales

PEDL215
Port Talbot, Wales
UK Methane Ltd-
Initial term extended to 30/06/2020

PEDL216
Bridgend, Wales
Coastal Oil and Gas Ltd
Initial term extended to 30/06/2020

PEDL217
Bridgend, Wales
Coastal Oil and Gas Ltd
Initial term extended to 30/06/2020

PEDL224
Newport, Wales
Sonorex Oil and Gas Ltd
Initial term extended to 30/06/2020

PEDL241
Brigg, East Lincolnshire
Egdon Resources
Initial term extended to 30/06/2020

PEDL253
Brigg East Lincolnshire
Egdon Resources
Initial term extended to 30/06/2020

PEDL162
Midland Valley, Scotland
INEOS
Initial term extended to 01/07/2019

PEDL177
Scalthorpe, North Yorkshire
Third Energy
Initial term extended to 31/12/2018

More on PEDL162

The Scottish PEDL162, north east of Glasgow, was granted in 2008, with an initial term of six years to 2014. This was extended by the UK Government, which was then responsible for licensing, to 2018. No well has been drilled.

Correspondence from the Scottish Government confirms that PEDL162 has been extended.

In a letter sent today, an official said:

“In relation to the request for an extension to the initial term of PEDL 162, as a competent licensing authority, it would be a dereliction of Scottish Ministers’ responsibility not to consider this request, taking into account all the relevant factors.”

It said its preferred position was not to support unconventional oil and gas extraction in Scotland. It was undertaking a Strategic Environmental Assessment before confirming the policy by the end of this year, the letter said.

It continued:

“The extension of the licence maintains the current position whilst the statutory assessments on the preferred policy are undertaken. To be clear, Ministers anticipate that those statutory assessments should be concluded well within the next 12 months, enabling a finalised policy position to be reached.

“In the meantime, the Minister has asked me to emphasise that a moratorium on UOG planning consents remains in place which means no local authority can grant planning permission at this time and Ministers would defer any decision on any planning application that did come forward until the policymaking process is completed.

“The practical effect of the actions of the Scottish Government in the form of the current moratorium, implemented since 2015, and the policymaking process which the Minister announced last October and which is now well underway to finalise the position, is that no fracking or coal bed methane activity can take place in Scotland while the Government’s preferred policy position is subject to the final statutory processes.”

Relinquished?

Belvoir, Nottinghamshire

PEDL204 in Nottinghamshire no longer appears on the OGA database. Its initial term was extended in 2016 but no well was drilled. The PEDL was held by Hutton Energy. There is no reference to it on the company’s website.

Graffham, West Sussex

At the time of writing, the OGA still listed PEDL233, centred on Graffham in West Sussex. This was held by IGas with an initial term expiry date of 30/6/2018.

But UKOG, which had an interest in the PEDL, confirmed on 9/7/2018 that the licence has lapsed. IGas announced plans in 2013 to drill an exploratory well at Baxter’s Copse in Graffham in the South Downs National Park. But no planning application has been submitted. In the 1980s, Conoco drilled a well at Baxter’s Copse but abandoned it after it was found to uncommercial. This operation would not meet the terms of the current licence.

No change?

Formby and Halsall

Altcar Moss Aurora

Proposed site for fracking at Great Altcar (small red line).

At the time of writing, the OGA has not changed the term expiry dates for PEDL164, in Formby and Halsall, held by Aurora.

The expiry dates remained today at 30/06/2018 for the initial term and 30/6/2019 the second term.

Two wells were drilled in this PEDL in 2012 but they didn’t meet the work commitment because they were not deep enough.

Aurora has said it expects to submit a planning application this year to drill and frack near Great Altcar.

Move to appraisal term

Broadford Bridge

UK Oil & Gas, the investor behind PEDL234 at Broadford Bridge in West Sussex, announced in May 2018 that  the licence had moved to its second, appraisal, term. This term had been due to end in June 2019 but UKOG said it had been extend until December 2023. According to the OGA, the licence is still due to end in 2039.

Legislation

The OGA gave this background about the law behind licence extensions:

“The Energy Act 2016 sets out the matters to which the OGA must have regard when exercising its licence powers onshore including when deciding whether or not a licence term should be extended. These, in combination with the functions set out in the Petroleum Act 1998, and associated Landward Petroleum Regulations, provide the following framework for the exercise of the OGA’s powers in relation to English licences:

  1. Minimising future public expenditure: The need to minimise public expenditure relating to, or arising from, relevant activities.
  2. Security of supply: The need for the United Kingdom to have a secure supply of energy.
  3. Collaboration: The need for the OGA to work collaboratively with the government of the United Kingdom and with persons who carry on, or wish to carry on, relevant activities.
  4. Innovation: The need to encourage innovation in technology and working practices in relation to relevant activities.
  5. System of regulation: The need to maintain a stable and predictable system of regulation which encourages investment in relevant activities.”

Researching licence details

The OGA has a searchable database (link here) for details of PEDL licences.

Updated 9/7/2018 to include information from a UKOG statement on the Graffham/Baxter’s Wood licence and a previous UKOG statement on Broadford Bridge

Updated 13/7/2018 with information from the Oil and Gas Authority

9 replies »

  1. What a farce! World class gold standard regulations and legal obligations don’t exist, it’s clear the the OGA are little more than another government sponsored rubber stamp brigade bending over backwards whenever the operators want to make a joke of the entire process.
    It’s time to challenge these decisions in court and in parliament to suspend all illegally extended licences and turf out the entire corrupt edifice once and for all.

        • Ha! Ha! No right?!!

          Whoops!

          Censorship alive and well in “Nova Scotia” now is it?
          I don’t think so, sorry to burst that bitter bubble illusion.

          We could equally say that you don’t live in England and don’t come from here, so you have “no right” to comment on events here??

          Fortunately for you, we are more open minded in England than that and would not say or claim anything so bitter and repressive?

          We can see from this just what will happen to freedom of speech and protest if the fracking industry imperative gets a frack boot in the ground here?

          Such a pleasure! Have a nice freedom of speech day

    • I see no reason why not Ellie? Except of course that no doubt the issue would be refused to protect the government. No law for them, many laws for us.

  2. I think we should mount a legal campaign to say that the licences should have been offered to other companies first before renewal. I could have bought one and drilled for oil 😉

  3. Hmm maybe they’d have drilled if it wasn’t for nimbys coming up with silly objections just to delay the companies

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