UK Oil & Gas (UKOG) has announced it will not appeal against the refusal of planning permission for exploration near the village of Arreton on the Isle of Wight.
In a statement this morning, the company said the estimated £500,000 cost of a planning appeal would now be spent on other projects.
Isle of Wight Council blocked the application in a unanimous vote in October 2021
Planning officers had recommend approval of the scheme, arguing that “economic benefits outweigh environmental harm”.
But councillors said the proposal had no local economic benefits and would damage the Isle of Wight’s high-quality natural landscape, key to its tourist industry.
UKOG said this morning:
“Given the number of new opportunities available to the Company, all of which are considered to offer far greater success case economic impact and higher probabilities of success than the proposed Isle of Wight project, the Company has decided not to appeal against the planning refusal.
“The envisaged £0.5 million planning appeal costs will therefore remain available and could be used for developing new oil & gas and geothermal/energy storage projects.”
Opponents welcomed the news this morning. A spokesperson for Don’t Drill The Wight said:
“We are delighted to hear that UKOG has finally decided not to appeal the decision of the planning committee to reject the Arreton Oil site application. It is a huge relief for us all on the island.
“We hope that this will give our council the confidence to include a specific statement within their upcoming review of the Island Minerals and Waste Plan rejecting all plans for fossil fuel exploration and extraction. The Isle of Wight exploration licence is still active until July 2023 but it is doubtful that it will be sold on by UKOG to another
“We are continuing to monitor the Government’s policies on future plans for offshore developments, since the Isle of Wight offshore licence P1916, which was dropped by UKOG in 2018, could be included in the next
offshore round of licences.”
UKOG sought three years of consent for a well pad, new access track and road junction, and drilling and testing of vertical and sidetrack wells.
It said today it had taken “considerable care and undertook much research to minimise the potential impact of the site”. The location was near a anaerobic digester and a quarry.
But opponents said the company had relied on out-of-date studies and had not carried out 2D or 3d seismic surveys.
UKOG had estimated the Arreton site could produce 500 barrels of oil a day from vertical and sidetrack wells drilled into the Portland formation.
Opponents pointed to predictions that the site would release 24,000 tonnes of CO2 equivalent, from flaring of unwanted methane gas, the operation of machinery and lorry journeys.
Six parish councils opposed the application, raising concerns about the impact of the site on the local road network and ferry port, through which any oil produced would be exported.
UKOG had six months in which to appeal against the planning refusal. The deadline to lodge an appeal was due in April 2022.
The company said:
“Having taken time to consider, the Company has decided not to appeal this decision.”
The estimated value of the Arreton asset has been written off, in annual accounts, also published today, the company said.
At the time of writing (08.25am), UKOG shares were broadly unchanged. The company said it had written off £0.95m in its accounts as a result of the decision not to appeal.
- More details on the accounts coming soon on DrillOrDrop