Exploration expansion

Showdown looms over 27 new oil and gas licences

Climate protestors promise to challenge the latest licensing decision (pic: Terry Murden)

A new showdown looms over the UK government’s decision to award 27 oil and gas licences in the North Sea.

Government ministers and oil and gas proponents say the decision will safeguard supplies, while climate activists and some business leaders have raised new concerns over the retreat from net zero.

The North Sea Transition Authority (NSTA) said it has prioritised areas which have the potential to go into production most quickly.

Licences in the central and northern North Sea and west of Shetland were awarded first to let operators press ahead with their plans.

The 33rd Oil and Gas Licensing Round was launched in October 2022 with 931 blocks and part-blocks made available for application.

Greenpeace has promised a legal response, while Amanda Blanc, the chief executive of insurance company Aviva, said she was “worried that UK climate action has stalled this year” and warned that Britain’s ambitious climate goals were “under threat due to a lack of practical and detailed plans.

“This puts at clear risk the jobs, growth and the additional investment the UK requires to become more climate-ready,” she said.

Amanda Blanc
Amanda Blanc: UK climate action has stalled

Her comments came days after a number of big businesses including Diageo, Heineken and ScottishPower owner Iberdrola urged world leaders to reach agreement at the COP28 Climate Summit to phase out coal, oil, and gas production. A letter signed by 128 companies warns that their operations are already feeling the impacts and costs of climate change.

The NSTA said that oil and gas contribute around three quarters of domestic energy needs and official forecasts show that, as the country transitions, they will continue to play a role in the UK’s energy mix for decades to come.

Stuart Payne, NSTA chief executive, said: “Ensuring that the UK has broad options for energy security is at the heart of our work and these licences were awarded in the expectation that the licensees will get down to work immediately.”

UK energy security secretary Claire Coutinho said: “As recognised by the independent Climate Change Committee – we’ll continue to need oil and gas over the coming decades as we deliver net zero.

“It’s common sense to reduce our reliance on foreign imports and use our own supply – it’s better for our economy, the environment and our energy security.”

Offshore Energies UK, the trade body for the sector, said the industry needs the churn of new licences to ensure continuity in domestic production and secure supplies.

It said there are 284 active oil and gas fields in the North Sea and that by 2030 around 180 of those will have ceased production due to natural decline.

Chief executive David Whitehouse said: “This announcement is a boost for UK energy security and for the 200,000 people in jobs supported by the offshore energy sector.

David Whitehouse
David Whitehouse: boost for energy security

“These are the very people we need to deliver reliable supplies of homegrown energy produced in the UK, for the UK.

“We all recognise that our energy system must change, and our industry includes companies that are expanding into renewables while using their expertise to pioneer ever cleaner energy production.

“The reality of the energy transition is that we need both oil and gas and renewables in an integrated system to protect the UK’s energy needs over the coming years.

“Last year filling the fuel import gap cost the UK £117bn. That’s a lot of money spent supporting the economic growth of other producing countries.

“With careful management and collaboration, the UK can become the gold standard of energy transitions.”

Climate activists said the decision was “backward” and warned that the UK would be “fuelling the climate crisis rather than helping to fix it”.

Philip Evans, climate campaigner for Greenpeace UK, said: “Greenpeace plans to fight these licences in the courtroom, and we’re mobilising voters to prioritise climate at the next election, because frankly we’re all sick of these backward-facing policies.”

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