UK's Lloyds bank drops funding for new oil and gas fields amid energy crisis
The UK's Lloyds bank announced on October 20 it would cease financing for the development of new oil and gas fields, two weeks after the country's government launched a new offshore licensing round in an effort to bolster its long-term energy security amid the global energy crisis.
Western financiers have been scaling back support for oil and gas in recent years to meet their climate goals. But in the UK, the HSBC bank promised in March to "phase down" its financing of hydrocarbons, "in line with what's required to limit global temperature of 1.5oC. Barclays, meanwhile, has pledged only to reduce financed emissions from energy over the coming years.
"We will no longer provide direct financing (either via project finance or reserve-based lending) of new greenfield oil and gas developments," Lloyds said in a corporate document. It defines green projects as those that did not receive approval from the UK's upstream regulator prior to this year.
"We will also not provide financing to new clients in the oil and gas sector unless it is for viable projects into renewable energy and transition technologies and clients have credible transition plans at the point of onboarding," the bank said.
The statement comes after the UK government launched the country's first offshore oil and gas licensing round in three years on October 7, inviting bids for 898 blocks and part-blocks across the North Sea, the East Irish Sea and West of Shetland. The focus will be on fast-tracking the development of known hydrocarbons, to bring oil and gas to market as soon as possible.