England is likely to see at least 112 oil and gas wells drilled in newly licensed areas by the end of the decade.
According to the Oil and Gas Authority, successful operators have committed to drill 54 wells in the first five-year term of their licence. Of these “firm commitment” wells, 47 will be for shale gas or oil. And of these, 14 will be horizontal fracked wells.
Another 58 wells could be sunk under a drill or drop commitment in the licence. This requires the company to at least plan to drill a well within five years or give up its licence. Of these “drill or drop” wells, 35 will be for shale gas or oil and 16 for conventional hydrocarbons.
These wells will be in addition to those drilled in existing licence areas. Operators drilled 86 wells in these areas from 2011-2015. Wells in both new and existing licence areas require planning permission and environmental consents before drilling can start.
93 new licences
Under the 14th round, 93 new onshore licences were awarded in England. They were made up of 159 blocks, most of which were about 10km2.
- 27 blocks were announced on 18th August 2015
- 132 were subject to an assessment under the Habitats Regulations and announced on 17th December 2015
No licences were issued in Wales or Scotland because responsibility for oil and gas licensing is to be devolved to the Welsh and Scottish administrations.
The 93 new licences are now added to 137 existing ones, which cover 360 blocks and were created in the previous 13 licensing rounds.
Focus on shale
More than two-thirds of the new licences awarded under the 14th round are for shale gas or oil exploration.
Applicants for a licence had to state which hydrocarbon they were mainly interested in (the “primary prospectivity”). The type of licence does not, however, prevent the successful operator from exploring for other hydrocarbons.
Who got what?
47 companies applied for licences. 22 were awarded at least one block.
The Swiss-based petrochemical group, INEOS, was the clear winner from the 14th licensing round. It was awarded 21 licence areas covering 38 licence blocks. With its existing licences, the company now has the exclusive right to explore for hydrocarbons across 1 million acres.
IGas was named as the operator of 11 licences across 17 blocks. Other successful companies included South Western, which was named as the operator of nine licences across 23 blocks, and Cuadrilla which got eight licences across 18 blocks.
All the licences awarded to INEOS and Cuadrilla were primarily to explore for shale. IGas’s licences are divided between conventional exploration and coal bed methane. South Western’s licences are divided between shale and coal bed methane. All Alkane’s licences were awarded for abandoned coal methane venting.
Two new licences for shale exploration have gone to both Third Energy, which has applied for planning permission to frack at Kirby Misperton in North Yorkshire, and Celtique, which has planning permission for a conventional well in West Sussex.
Operators of 45 new licences have made firm committed to carry out 2d seismic surveying. There wre also firm commitments to do 3d seismic surveying in 33 licence areas. Most of the surveying will be in shale licence areas.
75 of the 159 blocks have some condition that prohibits all of some activities in parts of the block.