The role of the OGA (Oil and Gas Authority) has been strengthened with backing of the Government’s Energy Bill published today.
Earlier this year it was announced the body would have a number of powers it would be able to enforce as part of its remit.
The move has been made as part of the implementation of the Wood Review last year and the Oil and Gas Fiscal Review which helped to establish the OGA.
Led by chief executive Andy Samuel, the government has handed the body a raft of powers.
This includes the ability to levy up to £1million in fines on companies which break rules as well as the right to revoke firm’s licences, sit in on their meetings and have early access to data.
The Government said the new powers would enable to the OGA to maximise the economic recovery of oil and gas, which has seen production costs rise and a lower oil price.
Oil & Gas UK’s chief executive, Deirdre Michie, said the industry body welcome the publication of the Energy Bill as it formally establishes the OGA as an independent government company.
She said:“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.”
A spokesman for DECC (Department of Energy and Climate Change) said the Government was “committed to backing” the OGA.
He said: “By reinvigorating our domestic oil and gas industry, we will also reduce our reliance on volatile foreign imports.
“The oil and gas industry is one of our great industrial success stories over the past 50 years, supporting around 375,000 jobs, contributing £3bn to our economy last year and is critical to our energy security.
“As a Government we are committed to backing it. We took forward the rapid implementation of the Wood Review and the Oil and Gas Fiscal Review, establishing the Oil and Gas Authority (OGA) and taking action to help revitalise exploration.
“With this Energy Bill, we are going further. We are strengthening the Oil and Gas Authority (OGA) with new regulatory powers so that it can drive greater collaboration and productivity in the industry, helping it to grow, attract investment, create jobs and remain competitive for the future.”
The OGA became an executive agency in April and has already filled a number of senior appointments on its team.
The Energy Bill has also sought to close the RO (Renewables Obligation) to new onshore wind developments in Great Britain and put more power in the hands of local people to decide on whether they want this now mature technology in their local communities.
More to follow.
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