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UK regulator to speed up North Sea gas drilling to boost domestic output

by SuperiorInvest

New North Sea gas fields will be prioritized in a licensing round due to be announced by the UK regulator later this week, aimed at boosting domestic output in the short term as the government tries to tackle the energy crisis.

Andy Samuel, the outgoing chief executive of the North Sea Transition Authority (NSTA), told the Financial Times it would speed up applications for discoveries in the southern North Sea as part of a process that would grant more than 100 permits, mostly focused on exploration.

The government has promised to boost production in the North Sea as it seeks to secure more UK Energy supplies in response to Russia’s push for natural gas exports to Europe, with Moscow pressuring Western nations over their military support for Ukraine.

“[In] in these unusual times, security of supply is a concern,” Samuel said, adding that the regulator would do “whatever we can do to boost domestic production”.

But he warned that the new permits, which will be granted in the first licensing round in almost three years, would do little to change Britain’s overall reliance on imports, which is expected to grow over the next three decades even as demand for hydrocarbons falls. .

Samuel, who will step down from the regulator in December after almost eight years, said the permits were likely to make a difference only “on the fringes”, given the North Sea was one of the oldest oil and gas producing areas in the world. . “I think it’s unlikely, given that this is a mature basin and the geology is well known, that we’re suddenly going to be in a situation where we’re going to ramp up production significantly again.”

He added that some of the discoveries that would be licensed could produce gas in as little as 12 to 18 months, including the Pegasus West field, which was discovered off the North Yorkshire coast at the start of the last decade.

The UK currently produces enough gas in the North Sea to meet the equivalent of about 40 per cent of the country’s demand. The NSTA predicts that will drop to 30 percent by 2030. In 2021, domestic oil and gas production fell by 17 percent year-on-year to 45 million tons of oil and 29 billion cubic meters of gas.

The decision to proceed with the licensing round drew criticism from climate groups. Government climate advisers warned earlier this year that further oil and gas exploration would they undermine credibility the UK’s global leadership on climate change.

But Samuel insisted the new round of licensing was not incompatible with the UK’s net-zero emissions target by 2050, as new domestic production would replace imports of liquefied natural gas from destinations such as Qatar and the US, which are more carbon-intensive given the , that they are transported in large volumes. distance. “We don’t want to blow the carbon budget all of a sudden,” he added.

But Tessa Khan, chief executive of climate group Uplift, said: “When it comes to energy security, new licenses for oil and gas fields. [was] illusion’, adding: “All the government is doing is signaling to the oil and gas industry that it’s business as usual and to hell with the climate crisis.”

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