UK Upstream Regulator to Get Tougher

The Oil & Gas Authority (OGA) has warned all licensees on the UK Continental Shelf that it is going to be tougher with companies whose behaviour it believes is blocking the maximum economic recovery (MER) of hydrocarbons.

The upstream regulator has a range of tools at its disposal to remove obstacles in the way of oil and recovery. It can intervene to speed things along towards an amicable agreement but it also has powers to act if companies act too slowly.

The director of regulation Tom Wheeler said in an open letter published on its website June 10 that most operators, licensees and infrastructure owners have responded well to its approach, making substantial changes to align their businesses to the requirements of the MER," but "opportunities, and challenges, remain. Despite good progress we still see too many issues taking too long to resolve or ending up in deadlock between disputing parties, threatening MER UK. Therefore, to help embed the new culture, and to ensure that any companies not onboard do not profit at the expense of the majority, we will be progressively more proactive in using the OGA’s powers."

As a result it expects to take on more cases and says it will be more transparent about the work that it is doing, including using alternative dispute resolution methods and progressing issues through measured escalation more quickly.

It will also update its "stewardship expectations" on commercial behaviour and publish a regulatory requirement on consents, authorisations and basic licence management, it said.