In February 2011, Greenpeace was successful in obtaining permission from the High Court to bring an application for judicial review of DECC’s decision 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. While only around 40 licences relate to deepwater areas, Greenpeace are challenging the entire award.

 The application 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 warrant a full hearing.

Greenpeace argues that no deepwater licences should be issued pending completion and assessment of the ongoing investigation into the causes and implications of the Gulf of Mexico 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.

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

In particular, DECC may argue that licensees are subject to controls by other bodies, such as the Health and Safety Executive, which controls are better suited to addressing any concerns arising from the incident.

Given the potential impact on oil and gas licenses, Operators are likely to monitor the case closely. We shall continue to report as the case develops.