New oil and gas regulator

Calls for new offshore oil and gas regulator

12th November 2013

Improving the way the UK’s offshore oil and gas industry is regulated could boost the economy by £200bn over the next 20 years, a report has said.

Retired oil tycoon Sir Ian Wood was asked by the UK government in June to carry out a review of the industry.

His interim report made a series of recommendations aimed at maximising the economic benefit from the UK’s remaining offshore resources.

These included setting up a new regulator to oversee the industry.

The current regulator, which is situated within the Department of Energy and Climate Change (DECC), is now “significantly under resourced and far too thinly spread” to effectively manage the increasingly complex business and operating environment, Sir Ian said.

He pointed to the rapid fall in production efficiency as an indication of poor asset stewardship by the industry, which the regulator had not been able to adequately confront.

“It is an opportune time for government and the industry to take stock and reshape the stewardship regime that will be required for the decades to come” Sir Ian Wood

Sir Ian called on the DECC to establish a new arm’s length regulatory body to take on the stewardship role for the next phase of the UK Continental Shelf (UKCS).

This would be appropriately resourced and equipped with additional powers to achieve greater co-ordination of activities and collaboration, closer in style and influence to neighbouring North Sea regulators.

It would work closely with industry to develop and implement key strategies in areas such as exploration, third party access to infrastructure, production efficiency and decommissioning.

It would also have the right, for the first time, to attend operator consortia management meetings.

The review recommended that the new body be funded by industry.

Sir Ian interviewed 40 active companies in the oil and gas industry, representing more than 95% of UKCS production, while compiling the report.

He also spoke to key government figures, and regulators from neighbouring regimes such as Norway and the Netherlands.

Source: BBC News

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