UK Court Upholds Government’s Oil and Gas Exploration Licences Despite Climate Concerns

A UK court has ruled that the government acted lawfully when issuing more than two dozen oil and gas exploration licences in May 2024, rejecting a challenge from environmental campaigners who argued the move failed to account for climate and marine impacts.

The High Court case, brought by marine conservation group Oceana UK, alleged that the government did not properly assess risks to protected marine habitats and overlooked the broader climate consequences of expanding fossil fuel exploration. Oceana argued that exploration licences create a “clear pathway” toward eventual oil and gas extraction and should therefore undergo a comprehensive climate review at the outset.

The government countered that exploration is an early-stage activity and that meaningful climate impact assessments can only occur once the scale and viability of potential production are understood. Judge Tim Mould agreed, ruling that the licences-issued under the North Sea Transition Authority’s latest licensing round-were legally granted. He added, however, that full environmental and habitat assessments must be conducted at every subsequent stage of project development.

Oceana UK said the ruling underscores the need for the government to clarify that securing an exploration licence does not guarantee future production approval.

The case comes as climate litigation intensifies in the UK following a landmark 2024 Supreme Court decision requiring planning authorities to consider the emissions from burning extracted fossil fuels.

That precedent has already led to the overturning of approvals for two major North Sea oil and gas fields, leaving the future of new fossil fuel projects increasingly uncertain.

Court decisions like this reinforce that UK O&G asset valuations still carry substantial climate-linked uncertainty - even upheld licences get re-litigated periodically. Our sustainability-due-diligence and climate-action teams help clients build energy-portfolio and disclosure narratives that stay defensible across climate-litigation cycles.