UK regulator the OGA fail to conduct financial health checks on Third Energy for over 2 years despite concerns over the fracking firms financial stability

A Frack Free North Yorkshire (FFNY) investigation has revealed that the Oil & Gas Authority (OGA) which is widely seen as a key government body for regulating the Fracking industry,  hasn’t completed a financial ‘competence’ check on Third Energy since November 2014, despite the controversial fracking firm recording a loss of over £3million in its latest set of published accounts

The OGA responded to the FFNY freedom of Information request on the 19th April 2017 stating;

The last detailed financial assessment was in November 2014 for the 14th Landward Licensing Round.

FFNY issued a similar request for information to the OGA back in 2015, when the fracking regulator was part of the Department of Energy & Climate Change (DECC) and the regulator confirmed;

Third Energy UK Gas Limited: DECC conducted a financial assessment of this company in November 2014 which was in accordance with DECC published financial guidance. The financial assessment was based on published accounts supplemented by management accounts and financial forecasts

 The OGA have also missed another vital opportunity to further hold Third Energy to account, when they failed to secure a parent company guarantee from Barclays Plc the ultimate owners of Third Energy UK Gas ltd instead opting for a guarantee from ‘Third Energy Holdings Ltd’ the controversial subsidiary based in the notorious tax haven, the Cayman Islands.

Third Energy Holdings Limited registration certificate from the Cayman Islands

Third Energy’s financial stability since the last assessment from the OGA has raised concerns and was flagged up in a recent report by drill or drop in February 2017. (extract below);

‘Third Energy UK Gas Limited – the company behind fracking plans at Kirby Misperton in North Yorkshire – made a loss of £3.854m in 2015. It owed more than £50m to parent and sister companies and turnover was less than half that of the previous year. The figures, released yesterday by Companies House, cover the 12 months to December 2015. They were filed on 13 February 2017, more than four months after the due date. In December 2016, Third Energy was warned it risked being struck off the companies’ register if it did not file its accounts by 6 February 2017.’

In more recent developments Third Energy’s Financial Director,, David Robottom has resigned from Third Energy UK Gas Ltd and a number of other subsidiaries, this further adds to the ongoing concerns over Third Energy financial difficulties. The official termination document is available via companies house and shown below.

It is Frack Free North Yorkshires opinion, when you analyse Third Energy’s poor financial health, that we cannot trust them to finance either safe working practices or the clean up afterwards. we therefore urge the OGA to immediately conduct another financial assessment and deny consent to frack at KM8 until the companies financial viability has been proven. FFNY also request that a parent company guarantee is obtained from Barclays Plc the ultimate owner of Third Energy UK gas ltd.

useful links:

  • Response from the OGA dated 19th April 2017 –  FOI-2017-0005
  • Drill or Drop report; https://drillordrop.com/2017/02/23/third-energy-records-loss-of-3-8m-in-2015/
  • OGA financial guidance information; https://www.ogauthority.co.uk/licensing-consents/licensing-system/licensee-criteria/