Finance

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We aren’t suggesting for a moment that UKOG is doing anything illegal,  but its credit rating has recently fallen off a very big cliff and at Waverley Against Drilling (WAD) we think that its finances are built on the equivalent of straw. So we hope Surrey County Council is looking very closely at the financial worth (a big minus) and (lack of) substance of this group of companies. 

The National Planning Policy Framework says at paragraph 205(e) that in relation to oil and gas exploration “Bonds or other financial guarantees to underpin planning conditions should only be sought in exceptional circumstances”

Well, if SCC does decide to grant this bunch of oil and gas cowboys planning consent then WAD says these ARE exceptional circumstances and a bond or guarantee must be provided.

This is why.

If a temporary permission to explore is granted but UKOG either doesn’t find anything or does find something but its really expensive and uneconomic to extract (likely), then the planning system demands that UKOG (234)Ltd has to find the funds to restore the test site to its original condition.   This is expensive and UKOG simply doesn’t have the money.  It is hoping that this exploratory well produces enough income to pay for the restoration (no doubt after paying its one Director an enormous salary).  But what if no oil or gas are found or it isn’t commercially viable?  This seems quite likely given what has happened elsewhere in the Weald.  No oil or gas means no money to restore.

We at WAD predict that UKOG 234 won’t  have the required funds to restore the site to its original condition at the end of the temporary consent in three years time. If it doesn’t this cost will have to be borne either by the landowners (Ashley Ward ) or by the public purse.  So if SCC grants consent and doesn’t apply its powers under 205(e) we at WAD say that in the circumstances this amounts to an ‘irrational’ decision on the part of SCC and if it grants consent to UKOG 234 without a bank bond or some form of bank guarantee then SCC deserves to be taken to a judicial review.