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    UK to launch next oil & gas licensing round as soon as this week


More than 100 licences are set to be up for grabs.

by: NGW

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NGW News Alert, Natural Gas & LNG News, Europe, Top Stories, Political, Regulation, Licensing rounds, News By Country, United Kingdom

UK to launch next oil & gas licensing round as soon as this week

New UK prime minister Liz Truss announced on September 8 the government would launch a new oil and gas licensing round as early as this week, offering rights to more than 100 licences in an effort to drive investment in domestic energy supply.

The UK held its last licensing round in 2019, and subsequently halted licence awards to assess whether its policies were in line with the country's climate goals. Truss is matching the policy of her predecessor Boris Johnson, whose government unveiled a new energy strategy earlier this year that involved resuming licensing this autumn.

Truss' government has gone further than Johnson's administration in announcing plans to lift a moratorium on UK shale gas production. Johnson's cabinet had only hinted that the ban would be lifted, pending a geological review of the country's shale gas resources.

These moves are part of a broader shift in UK energy policy, aimed at not only ensuring the country has enough energy supply to meet its own needs, but position it as a net energy exporter by 2040. In addition to fast-tracked oil and gas development, the government said it would also accelerate deployment of nuclear, wind and solar projects.

The government also said it would reduce the price cap for UK household energy bills to £2,500 ($2,885)/year over the next two years, down from the £3,549/yr cap that was set to be introduced next month. The plan will involve removing green levies, worth £150, from bills. Business and public sector organisations will see equivalent support this winter, the government said.

Whitehall will fund these subsidies, the government said, noting that a new energy supply taskforce had begun negotiations with domestic and international suppliers to agree long-term contracts for energy at reduced prices. The UK treasury will also work with the Bank of England to support the liquidity of energy firms struggling with high wholesale costs. The government also pledged to reform the structure and regulation of the energy market, based on recommendations from a review, and also review the country's net zero by 2050 strategy, to ensure the target is reached "in an economically-efficient way, given the altered economic landscape."

"Millions of families and businesses across the country can now breathe a massive sigh of relief, safe in the knowledge that the government is standing behind them this winter and the next," UK chancellor Kwasi Kwarteng said in a statement. "The price of inaction would have been far greater than the cost of this intervention. Not only can we provide urgent support now, but the beauty of our scheme is that it will also bring down inflation, helping tackle wider cost of living pressures."

New UK business and energy secretary Jacob Rees-Mogg added that Russia's war in Ukraine and Moscow's subsequent weaponization of energy supplies "have exposed the need to strengthen Britain's energy security for the good of the nation and millions of households and businesses who will struggle to meet the cost of bills this winter."

"The action we are taking today will reduce that worrying burden in the short term and will invigorate the long term reforms we need to complete, to resolve the underlying problems in the energy market and ensure the British people enjoy affordable and plentiful energy in future," he said.