The UK Department of Energy & Climate Change has introduced the new Energy Bill, which aims to formally establish an independent oil and gas regulator in the UK, the Oil and Gas Authority (OGA).
The OGA, to be led by Andy Samuel, former Managing Director of BG Group’s Exploration and Production in Europe, will be a government entity charged with the asset stewardship and regulation of domestic oil and gas recovery. The OGA will take over the Secretary of State for Energy and Climate Change’s existing regulatory powers on oil and gas in the UK. The Secretary of State’s regulatory functions in relation to the environment would not be transferred.
Furthermore, the bill aims to provide OGA a with access to company meetings; data acquisition, retention and transfer; dispute resolution; and sanctions. Also, the bill introduces provisions in relation to charges for the offshore oil and gas environmental regulator’s services to the industry.
According to the text of explanatory notes of the bill, the bill aims to ensure the OGA has the powers it needs to become a robust, independent and effective regulator, and enable it to deliver on a strategy to maximize the economic recovery of oil and gas from beneath UK waters.
Also, in the overview of the bill, it has been written the aim is to enable more comprehensive charging of the offshore oil and gas industry for permits and licences for environmental and decommissioning activity.
“The intention of this is to allow government to continue to recover the costs of its environmental and decommissioning activity in line with the ‘polluter pays’ principle of environmental law and address a perceived gap in current legislation,” the explanatory notes of the bill reveal.
Oil & Gas UK welcomes OGA
Commenting on the publication of the new Energy Bill, Oil & Gas UK’s chief executive, Deirdre Michie, said: “While it will take time to digest and comment on the full detail of the Energy Bill, we welcome its publication as it formally establishes the Oil and Gas Authority (OGA) as an independent, government company (GovCo).
“The OGA is a critical catalyst for the work being done to sustain offshore oil and gas activity and the Bill aims to provide the new regulator with the tools and capabilities it will need to do the job effectively and efficiently so we support its swift passage through Parliament.
“The provisions contained in the Bill complete the implementation of Sir Ian Wood’s recommendations for MER UK – Maximising Economic Recovery from the UK Continental Shelf, which enjoy cross party support.
“The commissioning of the Wood Review and implementation of its recommendations, along with the tax changes announced in this year’s Budgets, lay strong foundations for the regeneration of the UK North Sea.
“Big strides are being made by industry to improve the efficiency and reduce the cost of operations with average lifting costs anticipated to fall as a result over the next twelve months. The focus of the industry now is to continue that work while maintaining comprehensive engagement with the OGA and HM Treasury.”