The UK’s new Labour Government could run into serious legal issues if its reported plans to place an immediate ban on new North Sea oil and gas exploration come to fruition, despite claims from the government that no such plans exist.
The UK is currently in the middle of a North Sea licencing process, and any ban would start before the offshore oil and gas industry’s latest licensing round closes.
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According to multiple UK media reports, the new government will soon need to decide whether to cancel the process, which started last year, or allocate a small number of licences to complete the process.
Cancelling the process overseen by the North Sea Transition Authority (NSTA) could leave the new government vulnerable to legal action from companies who have spent millions of pounds researching and preparing bids for new exploration blocks.
According to media reports, the new government is expected to take legal advice on the matter before taking a final decision on the ongoing and yet-to-be-completed licensing round.
However, on Thursday afternoon, the UK’s Department for Energy Security and Net Zero denied reports that Secretary of State Ed Miliband had banned the North Sea oil regulator from issuing any outstanding drilling and exploration licences.
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By GlobalDataSeveral UK media outlets ran with the story on Thursday, with the Daily Telegraph’s headline reading ‘Miliband overrules officials with immediate ban on new North Sea oil’.
The newspaper claimed that Miliband had overruled his officials to stop the NSTA from issuing new licences. The outlet added that Miliband’s decision “means that companies will have wasted millions of pounds on preparing their bids”.
The applications were submitted as part of the offshore oil and gas licensing round that started last autumn.
However, a spokesperson for the department, when contacted by Offshore Technology, labelled the claims as a “complete fabrication” inventing “meetings and decisions that have not taken place”.
They continued: “As previously stated, we will not issue new licences to explore new fields. We will also not revoke existing oil and gas licences and will manage existing fields for the entirety of their lifespan” while working “with the North Sea Transition Authority to ensure a fair and balanced transition in the North Sea”.
It appears as though nothing had changed from the position Labour set out in its manifesto ahead of the election, essentially ensuring a responsible transition to green energy, while accepting that oil and gas would be a part of the UK energy mix for “decades to come”.
In May, the NSTA awarded 31 new oil and gas licences.
Awarded as part of the third and final tranche of the NSTA’s 33rd oil and gas licensing round, the licences are primarily aimed at gas extraction in the southern North Sea.
