U.K. to Offer 'Hundreds' of Oil & Gas Licenses

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The U.K. has announced plans to offer "hundreds of new oil and gas licenses" in the North Sea as part of a drive to make the country more energy-independent and boost its shrinking oil and gas industry.

The move was revealed by Prime Minister Rishi Sunak alongside plans to support two more carbon capture, usage and storage (CCUS) projects, Acorn and Viking. The North Sea Transition Authority (NSTA) will grant the first license in the coming weeks, with more than 100 set to be approved in total. The strategy to invest more in fossil-fuel development drew fire from renewable energy and environmental groups. The government has already committed to deploy CCUS in two industrial clusters by the mid-2020s -- the HyNet cluster in northwest England and North Wales, and the East Coast Cluster in Teesside and Humber. It expects to invest up to £20 billion (US$26 billion) in funding for the four projects and claimed that a "thriving carbon capture usage and storage industry...could support up to 50,000 jobs in the U.K. by 2030."

"We have all witnessed how Putin has manipulated and weaponised energy -- disrupting supply and stalling growth in countries around the world," Prime Minister Sunak said. "Now more than ever, it's vital that we bolster our energy security. 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. The U.K.'s oil and gas industry are also vital to driving forward and investing in clean technologies that we need to realize our net zero target, like carbon capture usage and storage, by drawing from the sector's existing supply chains, expertise and key skills whilst protecting jobs. The U.K. has one of the largest potential carbon dioxide storage capacities in Europe, making the North Sea one of the most attractive business environments for CCUS technology."

The news was welcomed by Ruth Herbert, chief executive of European carbon capture industry group, CCSA: "We are pleased to see the U.K. Government pushing ahead with its CCUS deployment programme and selecting the next two CCUS clusters, as time is running out to meet 2030 targets. This CO2 infrastructure is critical to safeguarding the U.K.'s supply chain security, enabling local industries to continue to thrive whilst reducing their emissions as we transition to a net zero economy. It is therefore vital that the Government urgently sets out clarity on the process and timeline for selecting carbon capture sites within these 'Track-2' clusters and within the previously announced Track-1 cluster expansion. Billions of pounds of investment is waiting to be deployed to decarbonise these industrial regions, but firm plans are required to secure it."

The Acorn project is the transport and storage backbone of the Scottish Cluster and will see the construction of a carbon capture plant at the St. Fergus oil and gas terminal. It will be used to capture emissions from existing or new facilities at the site which will be transported by the repurposed Goldeneye pipeline to a new injection well offshore in the Central North Sea. Industrial Info is tracking 12 Acorn projects worth in excess of US$600 million. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.

Industrial Info is also tracking the Viking CCUS project, located in the heavily industrialized Humber region. Formerly the V Net Zero Cluster, Viking has the potential to capture and store up to 10 million tonnes per year of CO2 by 2030--one-third of the U.K. government's target of 30 million tonnes per year. Industrial Info is tracking 17 projects associated with Viking CCS from a number of power, refining and industrial companies worth a combined US$1.5 billion. Subscribers to Industrial Info's GMI Database can click here for the report.

Earlier this year, oil and gas major BP plc (NYSE:BP) (London, England) bought a 40% stake in Viking. For additional information, see April 25, 2023, article - BP Buys Stake in Viking CCS Project in the U.K..

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).