UK Govt. grants three new shale gas exploration licences to Grangemouth refinery firm INEOS

The shale gas tank which INEOS is building at Grangemouth to store imported shale
The shale gas tank which INEOS is building at Grangemouth to store imported shale

INEOS – the petro-chems giant that operates the Grangemouth refinery – has won three new onshare shale gas exploration licences from the UK Govt.

The Aberdeen-based Oil and Gas Authority – the industry regulator – has today confirmed that a total of 27 on-shore licences will be awarded to exploration companies, including INEOS Shale.

Andy Samuel, OGA Chief Executive, said:  “With almost 100 applications received, the 14th Onshore Round has attracted significant interest and high-quality proposed work programmes from a range oil and gas companies.

“This announcement regarding the offer of 27 blocks gives those successful companies assurance about the blocks that they will be formally offered later in the year.”

UK Energy Minister Lord Bourne added: “As part of our long-term plan to build a more resilient economy, create jobs and deliver secure energy supplies, we continue to back our onshore oil and gas industry and the safe development of shale gas in the UK. This is why the OGA has moved quickly to confirm the winners of licence blocks which do not need further environmental assessment.

“Keeping the lights on and powering the economy is not negotiable, and these industries will play a key part in providing secure and reliable energy to UK homes and businesses for decades to come.

“It’s important we press on and get shale moving, while maintaining strong environmental controls. Investment in shale could reach £33 billion and support 64,000 jobs creating financial security for hardworking people and their families, whilst providing a cost-efficient bridge to lower-carbon energy use.”

The Habitats consultation, which covers those blocks which do require further environmental assessment, enables the public and other interested parties to submit responses by the end of September. The OGA will then consider the results of the consultation before offering any further blocks.

The 14th Onshore Oil and Gas Licensing Round was launched on 28 July 2014 and closed on 28 October 2014. A total of 95 applications were received from 47 companies covering 295 Ordnance Survey Blocks.

INEOS has been awarded three new petroleum exploration and development licences covering approximately 250 kmin the East Midlands, two blocks south of Rotherham and the third centred around Alfreton in Derbyshire. This additional acreage cements INEOS position as one of the UK’s leading Shale gas businesses – it already holds licences covering area around its Grangemouth refinery in the Central Belt.  

Gary Haywood, Chief Executive, INEOS Shale, said: “Shale gas is a once in a lifetime opportunity that the UK cannot afford to miss.

 “North Sea oil created great wealth for the UK – and shale gas can do the same.

“It will help secure manufacturing, deliver investment and create thousands of jobs, provide us with greater energy security, and help us to meet our climate change obligations using our own home-grown source of energy.

INEOS Shale is INEOS’ new on shore oil and gas exploration and production business. The Business made its first move into the shale exploration in August 2014 with the purchase of a share of the shale section of PEDL 133 from Dart Energy. It had grown rapidly, and now has the third largest portfolio of shale gas assets in the UK.

Haywood added: “We are keen to move quickly to evaluate the potential of this resource, and determine if we can economically produce gas from our licenses. 

“This will depend on the pace of planning approval. If we can, it will provide a local source of competitive energy and raw materials to support manufacturing jobs in the UK. 

“Our recent commitment to share the revenue of the gas production with the landowners and the community will also bring significant local benefits.”

It is the view of mainstream scientific authorities such as the Royal Society of Edinburgh and the Royal Academy of Engineering that shale gas can be extracted safely with appropriate regulation, and there could be real benefits from doing so, including jobs, tax revenue, local investment and improved energy security.

See also:

Shale and Safety: get the fracking facts right from the Royal Society of Edinburgh – http://goo.gl/BMO6Xp

The UK Shale Energy Conference 2015 –   http://goo.gl/hrEzOi

Ken Cronin, Chief Executive of UKOOG, the representative body for the UK’s onshore oil and gas industry, welcomed the offers of the first licences in the 14th onshore licensing round by the Oil and Gas Authority.

“More than 2,000 onshore oil and gas wells have been drilled in the UK, and 120 are currently operational, yet few people realise these sites are even there.

“The opportunity exists to create tens of thousands of jobs, reduce imports, generate significant tax revenue and support British manufacturing from an extremely small footprint which will benefit the environment at the same time.

“Research from the IoD shows that as few as 100 shale gas sites –  each the size of only two football pitches – could reduce the UK’s import dependency by half.

“We welcome the strong support from the industry with an increased number of licences applied for and offered and welcome new players into the UK industry for the first time.

“With over 4 out of 5 of our homes using gas for heating and cooking, with gas and oil being used by our manufacturing industries to make everyday products such as plastics and textiles -and with over 80% of our gas predicted to come from overseas by 2030 – it is imperative that we develop our own indigenous sources of oil and gas.

“The offers of these licences and the continued support from Government are critical in developing a genuine UK based energy mix for this country and today’s announcement is a significant move in helping us to reduce C02 emissions.”

Ms Flick Monk, Unconventional Gas Campaigner, Friends of the Earth Scotland, said:

“Scotland currently has a moratorium on fracking and other unconventional gas techniques until the public health and environmental impacts have been adequately assessed and the Scottish people have been thoroughly consulted.

“The people of England deserve the same precautionary approach and level of consultation as in Scotland. Parties across the political spectrum in Westminster must unite and call for a moratorium across the whole of the UK to stop this dirty and polluting industry from advancing into dozens of communities across the country.”

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