The nascent UK Oil and Gas Authority (“OGA”), has issued an urgent Call to Action report setting out the main risks facing the UK oil and gas industry: insufficient profitablity leading to pre-mature asset decommissioning and a failure to commit to critical long-term investment. The Call to Action sets out the priorities for OGA, the UK oil and gas industry and HM Treasury in order to address these risks. It is a measure of how serious the challenges are for the industry that OGA has been tasked with producing the report even as it is being established.
The OGA will officially be established in April 2015 and will be charged together with the oil and gas industry and HM Treasury - with developing and implementing the UK’s strategy to maximise the economic recovery of oil and gas from the UK Continental Shelf’s (the “UKCS”). In order to implement this strategy (the “MER UK Strategy”), OGA is intended to have certain powers that go beyond those currently held by the Department of Energy and Climate Change (“DECC”).
These include: attending industry meetings; initiating and deciding on dispute resolution procedures; imposing financial sanctions; suspending, revoking or transferring licences; and greater access to data from licence holders. OGA will be partly funded by the UK Government; through charges for its services; and through a levy on licence holders.