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LONDON (Alliance News) - The Oil and Gas Authority Tuesday offered companies 27 onshore blocks from the 14th Onshore Oil and Gas Licensing Round, which may be the first step to giving the green light to fracking in the UK.
The award of the initial 27 blocks comes after the UK government's decision last week to fast-track fracking applications to prevent lengthy delays.
A second group of 132 further blocks has been subjected to a further, more detailed assessment under the Conservation of Habitats and Species Regulations 2010. Those blocks will be issued sometime later in 2015.
The names of the companies that have been offered the 27 blocks has not been disclosed, but the companies themselves have been informed whether or not their applications were successful.
No companies have emerged as of yet, but BBC Business Editor Kamal Ahmed said chemicals company INEOS' subsidiary, INEOS Upstream, had confirmed it has been offered three licences for shale gas exploration covering 250 kilometres in the East Midlands.
Ahmed also suggested frontrunner Cuadrilla Resources, the last company to frack in the UK back in 2011, has been offered at least one licence.
"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. Today?s 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," said Oil and Gas Chief Executive Andy Samuel.
The government is desperate to get fracking going in the UK to try and reverse the dwindling homegrown energy production in the country as companies in the North Sea struggle to counter weaker oil prices.
Since the Conservatives won the General Election in May with an outright majority, the government has made it clear that it is in support of fracking. Most notably, it has said that fracking would be allowed to happen underneath National Parks and Areas of Outstanding Natural Beauty.
That means companies could drill into the ground on the borders of National Parks for example, before drilling vertically underneath to extract gas.
At the moment, two companies are in the spotlight and leading the charge over fracking in the UK. Cuadrilla Resources has launched an appeal after two applications to frack in Lancashire were rejected by local authorities, which it is likely to win, and Third Energy have an application to frack in Yorkshire, where it has already drilled one well.
The companies that have applied for onshore licences under the licensing round have not been released, but a series of listed companies may have potentially applied for licences as they either already have licences in the UK or have shown an interest in fracking in the past.
Listed companies thought to have potentially made applications are IGas Energy PLC and its subsidiary Dart Energy, Infrastrata PLC, Egdon Resources PLC, Enegi Oil PLC, Alkane Energy PLC and Celtique Energy which is not listed but works with numerous companies including Egdon, Europa Oil and Gas (Holdings) PLC and Union Jack Oil PLC on the Wressle-1 discovery.
The licensing round was launched on July 28, 2014 and closed on October 28, 2014. A total of 95 applications were received from 47 companies covering 295 blocks.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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