Regulation

UK shale gas regulator refunds licence fees because of fracking moratorium

Shale gas companies have received refunds on their onshore licence fees because of the moratorium on fracking in England.

14th round licences offered in central and northern England. Source: Oil & Gas Authority

The industry regulator has confirmed that it waived fees totalling £640,000 following the moratorium, imposed in November 2019, which left shale gas licences in limbo across the north of England and the midlands.

But the North Sea Transition Authority, known until this week as the Oil & Gas Authority, appears to have used its discretion in granting refunds and not all the applicants got their money back.

News of the waivers emerged following a freedom of information request by DrillOrDrop.

The NSTA told us:

“Applications for a waiver of licence rental fees have been received by the North Sea Transition Authority from holders of onshore oil and gas licences with shale potential.

“Waivers for licence rental fees have been granted for licences with shale development potential for reasons including those set out in the Written Ministerial Statement issued by the BEIS Secretary of State on 4 November 2019 concerning the development of licences with shale potential.”

The FOI response said the then OGA received £778,000 in licence rentals for the 12 months from 1 April 2020 to 31 March 2021.

It repaid a total of £640,000 for licence rentals for the periods 1 April 2019-31 March 2020 and 1 April 2020-31 March 2021.

DrillOrDrop understands that companies with shale gas potential had to pay the rental fee and then claim it back.

The NSTA told us successful applications for rental waivers required confirmation from the treasury.

And licences that got a refund would not necessarily be successful again. The NTSA said:

“These waivers were granted without prejudice to the question of whether any waivers will be given for future years.” 

In a follow-up question, we asked whether the then OGA had been threatened with legal action by shale gas operators over the moratorium.

A spokesperson said:

“We do not comment on legal action or threats of legal action if, or when, received.”

DrillOrDrop reported last year that the onshore shale gas industry had issued a letter before action, the first formal stage in a legal challenge, to the Department of Business, Energy and Industrial Strategy.

In the past few months, ministers have come under pressure from the industry and a small number of Conservative backbenchers to lift the moratorium.

We also asked NSTA whether the then OGA had any discretion on allowing the waiver or on the amount refunded.

The spokesperson said:

“Licensees can apply for a rental waiver to the NSTA. The NSTA considers these requests and not all waivers are granted”.

In another follow-up question, we asked what regulations oblige the government to waive rental fees for shale gas licences.  

The spokesperson said:

“Rental waivers for shale licences were granted on the basis of the Written Ministerial Statement issued by BEIS Secretary of State on 4 November 2019 and were given without prejudice for future years.

“The licences were granted to the licensees for the purpose of exploring for and developing shale gas. The introduction of the moratorium means that those licensees cannot currently carry out such activities.”

The spokesperson said Annex 4.10 of the UK government’s Managing Public Money sets out information regarding the granting of waivers.

The response to our FOI request also confirmed that licence waivers were not granted to operators that had no shale development potential.

In licences where there is both shale and non-shale gas potential, the NTSA said:

“the relevant waivers were granted on the basis that rentals will be reinstated on a pro rata basis should any of the licensees seek to develop the site for non-shale purposes.”

27/3/22 Acronym for regulator corrected to NSTA – thanks Phil C

20 replies »

  1. Congratulations to Ruth Hayhurst in obtaining the response to your Freedom of Information Request from the OGA (as was).
    https://www.whatdotheyknow.com/request/wavers_for_licences_for_onshore#incoming-2002138

    Fascinating information. The link to the gov.uk document is here:

    Click to access MPM_Spring_21_with_annexes_040322.pdf

    The connotations and implications of Annex 4.10 of the UK government’s Managing Public Money are very revealing as to the reason for the change of name from the OGA to the NS(!)TA. That just goes to show that there are always deeper reasons to investigate any government action. Such as the change of the name of any organisation out of the blue for mere bureaucratic convenience. There is no such thing as an innocent change of name of any organisation, be that private or governmental, there are always more important reasons than mere convenience and publicity. Changing the name of an organisation in private business is a well known strategy to avoid creditors, and to avoid paying tax for the old named company.

    Thanks to Ruth Hayhurst, this information was revealed to the public. The Freedom of Information request indicates a possible reason why that was done so quickly after these repayments of licences to the unspecified oil and gas industry operators. Otherwise, it would have never become disclosed and become buried in so many other bureaucratic machinations that are concealed under cover of distractions like the pandemic and the war in Ukraine.

    Since all licences for exploration were issued by the OGA (as was), then what chances, that future licences will be issued by the NS(!)TA or some other yet to be declared executive branch organisation which will not be accountable to the public? What are the chances that the small print of whichever organisation is responsible for issuing licences for onshore oil and gas exploration will exclude the possibility of refunding licences if a future event. Such as a moratorium on fracking and any other exploration and production process that becomes necessary? Nothing carried out in bureaucratic circles is ever done by mere publicity convenience. There is always a very good reason for everything. Declared or not.

    The implications and connotations of refunding £640,000 of the then OGA received amount of £778,000 in licence rentals for the 12 months from 1 April 2020 to 31 March 2021, are fascinating, and indicates that a timely name change has more to do with refunds than merely a convenient Bureaucratic Synonym exercise?

    So there are definitive and substantiated complications to the change of name of the OGA to the NS(!)TA than meets the eye, albeit of some, at least.

    “A government by secrecy benefits no one. It injures the people it seeks to serve; it damages its own integrity and operation. It breeds distrust, dampens the fervour of its citizens and mocks their loyalty.”
    Russell B. Long

    “Distrust and caution are the parents of security.”
    Benjamin Franklin

    Have a nice day.

  2. OMG!

    Didn’t take long for a conspiracy theory to be manufactured.

    “Indicates”, then a “?”

    Indicates that is pure speculation, at the best. Fabrication not far behind.

    Maybe it was just money owed after the event of the moratorium. No ? needed. Bit like a tax rebate.

    Changing a name of a private company is often related to said company moving into new areas with the new name reflecting that. Sometimes through acquisitions, sometimes through natural development. At least half of the private companies I worked for regularly reviewed their company name, often annually, as a marketing function to determine whether it was still the best name to reflect the business. Marketing Consultancy firms make a lot of income by advising on such matters. It needs to have strong justification as the costs of changing all literature etc. are significant. Not too sure if that last bit is usually a concern outside of the private sector.

    • Martin Frederick Collyer

      I suggest that you will provide substantiated and verified proof of your accusation that Ruth Hayhurst and Drill or Drop are guilty of the vague irrational terminological inexactitude of “conspiracy theorists”? please define the term in definitive, unambiguous and precise terminology and be prepared to defend it should it be taken further.

      Since the links to the Freedom of Information request and the responses from the former OGA were very clearly provided by Ruth Hayhurst and Drill or Drop for those who could actually be bothered to look at them.

      Perhaps now would be a time to do so, or be prepared to suffer the consequences.

      Also provided were the links to Annex 4.10 of the UK government’s Managing Public Money document. Which explained the reasons why the licences for oil and gas exploration were refunded. Do you also wish to challenge the former OGA, now the NTSA, for similar claims? I would not advise it.

      In order to correct your incorrect and spurious accusations, I suggest you either withdraw your comments or be prepared to defend them as will become necessary if you do not do so.

      Any further accusations that you may wish to extend towards myself personally, will be taken further to gain satisfaction by whatever method becomes appropriate.

      Enjoy!

      Enjoy!

      • I made no such accusation, Phil C. The DoD article was a factual account of what happened.

        Sorry you have difficulty reading the text I posted, that made it quite clear. Perhaps reread?

        • Martin Frederick Collyer.

          Yes, you did accuse Ruth Hayhurst and Drill or Drop of “conspiracy theory” in your very own words. Read your own words. Here is the proof:

          You said:

          “Didn’t take long for a conspiracy theory to be manufactured.” You can re-read it as often as you want. It still condemns your own words every time.

          There is the proof of your “conspiracy theory” accusation in your own words.

          [Edited by mnoderator]

          • [Edited by moderator]

            To get back to the issue:

            I would have thought that the majority of individuals in this country, because of the pandemic, would be quite used to having fees refunded when services the fees had been paid for could not be supplied. In my case, theatre tickets, in many other cases maybe flight fees or holiday booking fees. Maybe there were a few situations where legal action may have been required to push the refund, but in most cases the organisations who received the fees were honour bound to return them, and did so without legal costs. It might add a bit of information to find whether legal action, or threats of, were required in this instance, but as the OGA is/was largely funded by fees and levies from the industry I would hope they feel honour bound to be as reasonable to those who fund as my local theatre. If my local theatre had changed it’s name during the pandemic, in most situations, it would have still had the same responsibilities.

            I still find it surprising that in the real world where such matters are so fresh in people’s minds as their reality, that it should be considered as anything else.

    • MARTIN ,

      You say , quote ” At least half of the private companies I worked for regularly reviewed their company name. ” That’s a ridiculous comment to make.

      Can you actually prove what you have just said MARTIN , or is this just another unsubstantiated comment, that has been thought up to try and bolster your weak position on the matter .

      • Oh dear Jack.

        I am a qualified marketing professional. I worked in marketing. I was involved in constant reviews on whether to modify a company name.

        Now, yes, that was my experience. Has it changed?

        Not in my experience. Within the last year I have received notification one of my suppliers was about consider a change to their company name, and the asked to take part, with a marketing consultancy, to give my views on the choices and reasoning for their considerations.

        Please prove from your own experience why you consider it a ridiculous comment to make, together with your professional qualifications for doing so. I suggest you take care though, as you may find that there are readers on this site who do have more awareness of what actually happens in the real world.

        • MARTIN ,

          Do I really need to explain the nursery school level of basic business studies to a marketing professional like you ?????

          As PHIL C had previously implied, when a Company looks to change its name , it does so to HIDE something BAD or unpopular…… A successful thriving, popular brand would clearly want to keep its brand name for reasons a 2 year old child could work out.

          I stand by my original comment, what you said, was ridiculous.

          • JACK

            I admire your willingness to post about matters you clearly know little about, without any concern about reality! Your approach to risk may find some reward in some professions, but I suggest you steer clear of mine clearance, or managing a china shop.

            So, you have wanted to join in, let ‘s see the outcome:

            (Those who do know about such matters will have seen this coming!)

            In 2018, Statoil changed it’s name to Equinor, and I quote their reasoning to do so:

            “Equinor is a name that is forward looking, and creates a strong platform for engagement and dialogue with a broad set of stakeholders.

            The name Equinor is formed by combining “equi”, the starting point for words like equal, equality and equilibrium, and “nor” signaling a company proud of it’s Norwegian origin, and who wants to use this activity in it’s positioning.”

            I suspect, some marketing individual or group, may have been involved, and were adequately rewarded! The “positioning” bit is usually the reason companies change names. Joe Bloggs Cars may become A.1 Cars to be positioned first in Yellow Pages.

            But feel free, Jack, to try and create some conspiracy theory that is nothing to do with marketing. May be best to check out the financial situation of Statoil and then Equinor before you do so.

            You can stand by your original comment, manufacture some fantasy, but it will still be ridiculous, and be added to the other strange comments around subjects that posters clearly know little about, but need to join in. I could quote an extensive list, but am not allowed to do so.

            Perhaps your concern regarding plastic could be reduced if those parts of humanity who use plastic for ridiculous fantasy games, were prevented from doing so?

              • Indeed, Paul.

                Oil seems to have been slipping out of a lot of company and organisation names in recent years. Some would suggest it is greenwashing, others would suggest it is to reflect that many have invested considerably in other areas so that oil is not such a logical focus, and there is a desire to focus more on other areas of their business. Don’t think that is the case with Equinor, though.

                I suspect there are many marketing guys and gals making a case for projecting what a business might be growing into, either naturally or via acquisitions, by rebranding. There is quite an industry involved and it is not cheap to achieve.

              • It’s called ‘misdirection’, a deliberate and appropriate means to rebrand away from what the world see’s as a dirty word! “Greenwashing”!
                But will the world disassociate its self from the thirst of Oil ( $109 bbl on the 28th March 2022) and Gas (£1 a therm)

                Rebranding is part of consistent development, removing oil from a name does not mean expansion of renewable energy alternatives tomorrow…

                Bashing an industry which those take for granted, yeah all fine and well when it’s been onshore and unannounced for 40 years and offshore for 50 years.

                But wow, have some nimby’s and anti’s suddenly got their voices, but will they still consume hydrocarbons after their little rant?, of-course they will!

                A little applause for those workers who keep the lights on at night, and the gas flowing for cooking and heating 👏

            • MARTIN

              What was the debt ratio for STATOIL in 2018 ????????

              Like I said , when you have a booming, successful business, the brand name has great value.

              When you have something that you want to brush under the carpet ” HIDE ” you have good reason to change your company name.

              The comment you made in your above post , quote , ” At least half of the private companies I worked for regularly reviewed their company name, often annually. ” I stand by my original comment , its totally ridiculous and utter tosh to say such a thing .

              As far as you being a qualified ” Marketing Professional. ” I’m a professional tap dancer who was Fred Astaire personal dance instructor . In fact we once, both tap danced our way down the Yellow Brick Road with Judy Garland .

              We all can be whoever we want on here MARTIN

              Speaking for myself, I can confirm that I’m not a qualified ” Marketing Professional , ” BUT then again who’s to say you are

              • Oh dear, Jack.

                So, that’s the way you discuss/debate. You fail to win the argument so have to resort to trying to discredit the person you were debating with. If you are a grown up, and not a lad, then maybe act like one? That way, at least you may learn something.

                Maybe it would be a lot easier and a bit more rewarding to other readers, if you just made sure you were correct before you posted your opinions based upon no evidence. That way, they may learn something too.

                I suspect someone in Statoil in 2018 had an ingrowing toenail, or similar affliction, but they certainly had no financial reason that determined a name change! To suggest there was, is simply another desperate attempt to wriggle out of the corner you have painted yourself into. You arrived in that painted in corner yourself, Jack. “Oops!” may have been the more appropriate reaction.

                [Edited by moderator]

                On an open forum Jack, it may be wise to accept that some readers may be more qualified in certain areas than the poster. It is usually accepted that would be wise in a bar, as failure to do so could be embarrassing. I see more need, not less, on social media. You seem to have a different opinion, which is your choice, but so are the consequences.

                By the way, Jack, there are also bars in London where the price of a beer is several times the national average for that same drink. Nothing to do with the manufacturer/supplier of that drink, all to do with the retailer.

        • MARTIN ,

          If you were a “marketing professional ” how come you are always on the ropes when trying to promote the Fracking industry ….. Forum members run rings round you when pressing home the dangers and pitfalls of this type of industry . Your always on the losing end of the debate.

          You do more damage than good to the Oil and Gas industry , as you give enviournmentalists an amazing opportunity/platform to promote their agendas

          NOW IF YOUR real intention is to discredit the Oil and Gas industry in favour of the Green Industry , then I would applaud you as a true genius of marketing. You truly would be worthy of the highest of accolades.

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