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UK to issue hundreds of new North Sea oil and gas licences

31 July 2023

Hundreds of new oil and gas licenses will be granted in the UK, Prime Minister Rishi Sunak confirmed on 31 July. The Government and the North Sea Transition Authority (NSTA) have announced a joint commitment to undertake future licensing rounds, which will continue to be subject to a climate compatibility test.

Representative image: Shutterstock
Representative image: Shutterstock

By adopting a more flexible application process, licences could also be offered near to currently licensed areas – unlocking reserves which can be brought online faster due to existing infrastructure and previous relevant assessments.

With the independent Climate Change Committee predicting around a quarter of the UK’s energy demand will still be met by oil and gas when the UK reaches net zero in 2050, the Government is taking steps to slow the rapid decline in domestic production of oil and gas, which will secure our domestic energy supply and reduce reliance on hostile states, it said in a statement.

The NSTA is currently running the 33rd offshore oil and gas licensing round. It expects the first of the new licences to be awarded in the autumn, with the round expected to award over 100 licences in total.

UK Prime Minister Rishi Sunak said:We have all witnessed how Putin has manipulated and weaponised energy – disrupting supply and stalling growth in countries around the world. Now more than ever, it’s vital that we bolster our energy security and capitalise on that independence to deliver more affordable, clean energy to British homes and businesses.

“Even when we’ve reached net zero in 2050, a quarter of our energy needs will come from oil and gas. But there are those who would rather that it come from hostile states than from the supplies we have here at home.

“We’re choosing to power up Britain from Britain and invest in crucial industries such as carbon capture and storage, rather than depend on more carbon intensive gas imports from overseas – which will support thousands of skilled jobs, unlock further opportunities for green technologies and grow the economy.”

Citing the importance of the oil and gas industry in driving forward clean technologies, like carbon capture usage and storage, by drawing from the sector’s existing supply chains, expertise and key skills, the UK government also confirmed two carbon capture usage and storage clusters. The Acorn project in North East Scotland and Viking in the Humber have been chosen as the third and fourth clusters in the UK.

The Government has already committed to deploy CCUS in two industrial clusters by the mid-2020s – the HyNet cluster in North West England and North Wales, and the East Coast Cluster in the Teesside and Humber – and another further two clusters by 2030 – now confirmed as Acorn and Viking.

The Government said that together these four clusters will build a new thriving carbon capture usage and storage industry, which could support up to 50,000 jobs in the UK by 2030.

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