UK: Greenpeace Challenges Award Of Oil And Gas Licences

Last Updated: 2 March 2011
Article by Judith Aldersey-Williams and Valerie Allan

The ramifications of the events last year in the Gulf of Mexico continue to impact the industry.  Last week, Greenpeace was successful in obtaining permission from the High Court for a full hearing of its  application for judicial review of DECC's decision by way of its latest licensing round to grant exploration and production licences for deepwater areas.  The latest round of licence offers (26th Round) involve a further 144 licences, although these have yet to be formally granted.  Of these, only around 40 relate to areas West of Shetland or in the Western North Sea, with offers made to around a dozen different companies and it is this proposed deep water activity which Greenpeace is now challenging.

Greenpeace seeks to quash the licences and/or obtain a declaration that the granting of such licences would be unlawful.  The High Court has ruled that there is sufficient argument in Greenpeace's written application to require a full hearing.

DECC now has 35 days to prepare a full written defence, and has confirmed that the application will be robustly defended.  Affected oil companies may also be permitted to join in defending the case.  A date for a full hearing has yet to be fixed.

To view the article in full, please see below:

Full Article

The ramifications of the events last year in the Gulf of Mexico continue to impact the industry. Last week, Greenpeace was successful in obtaining permission from the High Court for a full hearing of its application for judicial review of DECC's decision by way of its latest licensing round to grant exploration and production licences for deepwater areas. The latest round of licence offers (26th Round) involve a further 144 licences, although these have yet to be formally granted. Of these, only around 40 relate to areas West of Shetland or in the Western North Sea, with offers made to around a dozen different companies and it is this proposed deep water activity which Greenpeace is now challenging.

In addition, Greenpeace are seeking the revocation of a Seaward Production Licence which would allow deep water drilling in the West of Shetland. This Licence was granted to Faroe Petroleum on 4 October 2010 as a delayed award under the 25th Licensing Round.

Greenpeace seeks to quash the licences and/or obtain a declaration that the granting of such licences would be unlawful. The High Court has ruled that there was sufficient argument in Greenpeace's written application to require a full hearing.

Greenpeace's case is based on the contention that no deepwater licences should be issued pending completion and assessment of the ongoing investigation into the causes and implications of the Deepwater Horizon incident. It claims that in light of that incident, a DECC decision of 22 October 2010 that there is no need for an environmental assessment under Article 6 of the Habitats Directive for the licences offered in October is unlawful and that it is also unlawful for DECC to continue to rely on the conclusions reached in the Strategic Environmental Assessment of June 2009, at least insofar as these relate to exploiting deepwater oil reserves.

Application of the Habitats Directive

The Offshore Petroleum Activities (Conservation of Habitats) Regulations 2001 (as amended) (OPAR 2001) implement the requirements of Article 6(3) and Article 6(4) of the Habitats Directive (92/43/EEC) with respect to oil and gas activities in UK waters. To comply with its obligations under OPAR 2001, DECC undertook a Habitats Regulations Assessment, the first stage of which was a screening assessment to determine whether award of any Blocks applied for was likely to have a significant effect on a site, either individually or in combination with other plans or projects. On 22nd October 2010, DECC decided that no significant effect was likely in respect of a large number of the Blocks applied for, although it required further investigations with respect to around 99 blocks. (A copy of DECC's report can be found here)

DECC's report specifically refers to the Macondo incident. In relation to deepwater drilling in the areas west of Shetland they comment: "There have been numerous Blocks licensed in these deep water areas in previous licensing rounds and extensive exploration drilling has been undertaken to the west of Shetland over several decades and a number of hydrocarbon field developments. In connection with this exploration and field development, assessment has been undertaken of the behaviour of spills and contingency planning. The presence of the North Atlantic Drift/shelf edge current strongly flowing to the northeast, and legal requirements on well design safety and spill contingency planning, mitigate against the likelihood of significant effects on Natura 2000 and other conservation sites arising from oil spills from activities in those areas. The award of Seaward Production Licences for the Blocks in this area will not in itself lead to significant effects on Natura 2000 sites, since they do not permit subsequent field activities. DECC will ensure that the relevant lessons learned from the recent deep water spill in the Gulf of Mexico, including any additional mitigation measures considered necessary to prevent major oil spillage, will be implemented in UK waters and required as part of activity permitting for exploration and development drilling."

Strategic Environmental Assessments

Strategic Environmental Assessment (SEA) is the process of appraisal through which environmental protection and sustainable development may be considered, and factored into national and local decisions regarding Government (and other) plans and programmes – such as oil and gas licensing rounds and other offshore energy developments. The process aims to help inform Ministerial decisions through consideration of the environmental implications of the proposed action. DECC began a sequence of sectoral SEAs of the implications of further licensing of the UKCS for oil and gas exploration and production in 1999. SEA is now a requirement of UK law as a result of the incorporation of the European Strategic Environmental Assessment Directive (Directive 2001/42/EC) through the Environmental Assessment of Plans and Programmes Regulations 2004 (and similar regulations for Scotland, Wales and Northern Ireland).

DECC's draft plan to offer licences for offshore oil and gas exploration and production through a 26th licensing round was the subject of a Strategic Environmental Assessment (SEA) completed in 2009. The SEA is documented on a dedicated website and includes commissioned reports on various components of the natural environment, cultural features and socio-economic considerations. In addition, as part of the SEA new information was collected in particular on selected seabed features through seafloor mapping, sampling and photography, on the offshore distribution of large cetaceans, and on important navigation routes and commercial fishing areas.

The potential implications of the exploration and production activities which could follow if the draft plan was adopted were considered at an expert assessment workshop and a series of stakeholder workshops. The results of these workshops were assessed further and documented in an Environmental Report (available here) which then formed the basis for consultation with the consultation bodies and the public.

In deciding to proceed with a 26th offshore licensing round DECC had regard to the conclusions and recommendations of the Environmental Report together with feedback received from consultees. As a result of the SEA process, various blocks were withheld from licensing including some blocks in the deepest part of the SW approaches because of inadequacy of data, blocks in or overlapping with the boundaries of the Moray Firth and Cardigan Bay SACs (where further assessments initiated following the 24th Licensing Round applications are ongoing) and a large number of blocks withheld at the request of the Ministry of Defence.

Greenpeace's argument is that in light of the Macondo incident, the current SEA is wholly inadequate and there requires to be a re-assessment of the potential risks of oil spills for particularly sensitive sites.

Potential arguments which DECC may raise in judicial review proceedings

One argument which DECC may raise in these proceedings is that the licence process is not the process under which the implications of the Deepwater Horizon incident would most appropriately be addressed and that to refuse to grant any licences at all in deepwater areas would (given the UK's history of successful offshore drilling) have been a disproportionate response.

The licence is the general authorisation for exploration and production in a particular area. Such a licence does not allow a licensee to carry out all petroleum-related activities from then on. Field activities, such as seismic survey or drilling, are subject to further individual controls by DECC, and a licensee also remains subject to controls by other bodies such as the Health and Safety Executive (HSE).

It is notable that none of the proposed deepwater licences appears to include a firm commitment by the licensees concerned to drill any exploration wells. Of course, this does not rule out the possibility of wells being drilled during the initial term to meet contingent well commitments or in order to satisfy "drill or drop" provisions under which a well must be drilled in order to permit the licence to continue to its next stage. DECC's experience is that Drill-or-Drop and Contingent work programmes (subject to further studies by the licensees) tend to result in a well being drilled in less than 50% of cases.

As noted, in order to drill a specific well, a series of further consents would be required from DECC and HSE. The regime applicable to drilling in the UKCS includes the following protections:

  • The Offshore Installations (Safety Case) Regulations 2005 require written safety cases and risk assessments to be prepared by the operator, and then approved by HSE, for all mobile offshore drilling rigs operating in the UK.
  • A system of well notification, where the HSE reviews well design and procedures.
  • A requirement for the design and construction of a well to be examined by an independent and competent specialist.
  • A scheme of independent verification of offshore safety critical equipment such as blowout preventers to ensure they are fit for purpose.
  • Checks that workers involved in well operations have received suitable information, instruction, training and supervision.
  • Offshore inspections of well control and integrity arrangements, and related safety issues, by specialist inspectors from HSE's Offshore Division.
  • Weekly drilling reports submitted to HSE by operators.

In addition, operators must prepare Oil Spill Emergency Plans (OPEPs) under the Merchant Shipping (Oil Pollution Preparedness, Response and Co-operation Convention) Regulations 1998 to ensure that they are prepared for the contingency of an oil spill.

It is these various consents and mechanisms which would be (and indeed are being) varied to address the lessons learned from the Deepwater Horizon incident. For instance since December, OPEPs associated with exploration, appraisal and development drilling operations, or work-over and intervention operations on hydrocarbon producing wells, on the UKCS must assess and provide for an effective response to an identified worst-case scenario where all containment barriers have failed resulting in a blow-out, that would normally require the drilling of a relief well.

DECC now has 35 days to prepare a full written defence, and has confirmed that the application will be robustly defended. Affected oil companies may also be permitted to join in defending the case. A date for a full hearing has yet to be fixed.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 02/03/2011.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.