Britain is tightening controls on firms hoping to carry out hydraulic fracking in parts of the country by adding a financial health check to the application process, the government said on Jan. 25.
Substantial amounts of shale gas are estimated to be trapped in underground rocks and the British government wants to exploit them to help offset declining North Sea oil and gas output, create jobs and boost economic growth.
No fracking—which involves extracting gas obtained from rocks broken up or fractured at high pressure with water and chemicals—has taken place in the country in the past 7 years after operations were halted at the first British site following earth tremors.
The government has since imposed several environmental and technical requirements which must be met before any company can carry out the process. Energy minister Greg Clark said Jan. 25 that additional financial criteria must also be met.
“An equivalent assessment should be undertaken of the financial resilience of companies proposing to carry out hydraulic fracturing operations so that stakeholders can have confidence in the company’s ability to meet its commitments,” he said in a in a written statement on parliament’s website.
“We will therefore look at the financial resilience of all companies wishing to carry out hydraulic fracturing operations alongside their application for Hydraulic Fracturing Consent,” he said.
Third Energy, 95%-owned by Barclays Plc (NASDAQ: DTYS) is waiting for final sign off by Clark, to begin test fracking at its Kirby Misperton site in Ryedale, Yorkshire, northern England.
Clark said he was satisfied Third Energy had met the technical requirements, but is seeking further financial information about the company to help make his final decision.
Clark said Third Energy had not yet submitted financial accounts for the period ending in December 2016, despite a statutory deadline of September 2017 for them to do so.
No one from Third Energy was immediately available to comment.
Several firms hope to use hydraulic fracking in Britain, including shale gas developer Cuadrilla and petrochemicals group Ineos.
Environmental groups continue to be strongly opposed to fracking, concerned about the potential seismic activity and water contamination.