The UK's Oil and Gas Authority, the industry watchdog, plans to hold an oil and gas licensing round for the North Sea this year, the Financial Times has reported, noting it would be the first licensing round since 2020.
The news comes weeks after reports that the UK government was considering a ban on new drilling permits in the North Sea. Discussions reportedly involved an immediate pause on licensing and a ban on all permits from 2040.
In this context, the decision to launch a new licensing round is bound to spark controversy amid the UK's push to move away from fossil fuels and into a fully renewable future. It was this push that put an end to new oil and gas licensing rounds two years ago.
Now, however, with the Ukraine war sending oil and gas prices soaring, it is adding some $50 billion to the collective bills of UK households. The cost-of-living crisis resulting from the energy price rally has sent the UK government scrambling for quick fixes to the situation.
In search of more oil, after the government banned Russian imports, Prime Minister Boris Johnson recently visited Saudi Arabia and the United Arab Emirates but, per comments from officials there, was left empty-handed by his hosts, the Wall Street Journal reported last week.
Meanwhile, the renewable energy push at home remains strong. The Oil and Gas Authority will this week change its name to North Sea Transition Authority, while the government drafts so-called "climate compatibility checkpoints" for all future oil and gas licensing rounds.
The Financial Times notes, however, that these checkpoints were hastily revised recently to include stipulations allowing regulators to overlook environmental considerations if there are national security concerns.
"The team [at the NSTA] are getting ready some packages of licences that have discoveries that are pretty much ready to go," said the head of the Oil and Gas Authority, Andy Samuel, as quoted by the FT.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More