In late January, the Infrastructure Bill received its third reading in the House of Commons before it returns to the House of Lord for final consideration. Not surprisingly, one of the key themes was the highly controversial focus on fracking.
While one expects that the Infrastructure Bill will be finalised before the general election, the future of fracking has wider reaching impacts on the oil and gas sector.
The rejection of the moratorium proposal and approval of the main provisions facilitating fracking will be seen as a positive step for the industry. However, investors are still likely to see the future of unconventional oil and gas in the UK as uncertain as we go into the general election. The additional conditions placed on fracking will almost certainly increase costs. This will need to be looked at carefully in a lower oil and gas price environment.
The Infrastructure Bill would provide a GBP 3.9 billion boost to the economy over the next 10 years
Ineos is forecasted to spend up to GBP 640 million in UK shale gas exploration
Lancashire County Council has deferred decisions regarding Cuardrilla’s planning applications to frack on two sites