 which is responsible for issuing the licences, says that the majority of production permits issued "do not end up with production actually taking place". Oil and gas analyst Nathan Piper says to be awarded a licence, companies bid against each other. But this is not about companies throwing cash around. Companies who are bidding have to commit to carrying out a certain amount of work on a site for a certain amount of time, which can typically be between two or three years. During this period, firms will explore the area for oil or gas and carry out scientific tests, before deciding whether){kind=link}
Around 100 new oil and gas licences for the North Sea are up for grabs, with the first of the new permits set to be awarded in the autumn.
Prime Minister Rishi Sunak says the licences are part of the UK’s plans to bolster its energy security and make the UK less reliant on other countries for supplies.
But critics argue that extracting oil and gas is not the right approach for the environment.
In very simple terms, an oil and gas licence is permit for a company to explore and potentially extract oil and gas from a defined area of land either onshore or offshore.
There are two types of licence: