UK: Fracking part of 27 onshore blocks offered by Oil and Gas Authority to 12 companies

The UK's oil and gas regulator is offering 27 onshore blocks in England from the 14th Onshore Oil and Gas Licensing Round to 12 companies where licences to frack for shale oil and gas are included.

In a statement, the Oil & Gas Authority said the first tranche of blocks announced is for blocks that do not require further environmental assessment under the Conservation of Habitats and Species Regulations 2010.

The exploration sites include areas in the Midlands and the North East. Whether exploration actually proceeds depends on local planning consent, the BBC says.

For the remaining 132 blocks, a consultation is being held and subject to its outcome, a second tranche of awards will be announced later this year, the regulator said.

Reuters said that this is the first time in seven years that the UK is offering shale gas exploration licences. All of the new 27 licensing blocks are in England as Wales and Scotland have imposed moratoriums on fracking due to the public's environmental concerns.

It said other European countries, including France and Germany have banned the use of shale gas hydraulic fracturing, or commonly known as fracking, due to environmental concerns.

The new licensing round, which has been delayed since the start of the year, offers 27 shale gas and conventional exploration blocks and received a total of 95 applications from 47 companies.

UK Energy Minister Lord Bourne said: "Keeping the lights on and powering the economy is not negotiable, and these industries play a key part in providing secure and reliable energy to UK homes and businesses for decades to come."

The blocks have been offered to the following operators:

• Island Gas Ltd (7 blocks);
• Cirque Energy (UK) Ltd (4 blocks);
• Ineos Upstream Ltd (3 blocks);
• ADM (2 blocks);
• Cuadrilla Resources Ltd (2 blocks);
• Egdon Resources UK Ltd (2 blocks)
• Hutton Energy PLC (2 blocks);
• Aurora Energy Resources Ltd (1 block);
• Blackland Park Exploration Ltd (1 block);
• GDF Suez E&P UK Ltd (1 block);
• Osprey Petroleum Ltd (1 block); and
• Warwick Energy Exploration Ltd (1 block)

Companies welcome offer

In a statement, Gary Haywood, chief executive of Swiss chemicals company INEOS said: "We are keen to move quickly to evaluate the potential of this resource, and determine if we can economically produce gas from our licences."

Reuters said Ineos had applied for shale gas licences in Scotland but nothing has moved forward due to the moratorium.

Francis Egan, Cuadrilla chief executive told the BBC that public fears about fracking were "understandable" but unfounded.

"People have not actually seen much happen on the ground, so what they are reacting to is a lot of stories, and understandable fears ... There is always uncertainty when you are hearing about something you can't actuall see it," he said.

Last week, the government announced plans to fast-track fracking applications, warning that it could take over the authority to make a decision if local councils continue to take longer than the 16-week statutory timeframe.

Environmentalists have reacted to the move, saying this is against the government's promise to give the power to decide on fracking to local residents.

Recently, the Lancashire County Council threw out an application by Cuadrilla to frack at two sites. The decision is being appealed.

The issue of fracking has come under strong opposition by environmentalists worldwide, over fears the technique, which involves injecting a cocktail of chemicals deep underground to break up the rocks around oil and gas deposits could contaminate surrounding water supplies and wildlife.

Despite opposition to this new technique, the New York Times said that the fracking boom has put the US on track to become the world's largest oil and gas producer.