MER Collaboration to become a legal requirement for N. Sea industry in new Energy Act

DECC logoCollaboration between exploration companies so as to maximise economic recovery from North Sea oil and gas fields will become a legal requirement in the UK when the current Energy Bill is enacted by 2Q2016.

This is presently provided for at Para-25 in Part 3 (see below) in the government’s draft strategy ‘Maximising Economic Recovery of Offshore UK Petroleum’, which states: –

Collaboration: When considering how to comply with obligations arising from or under this Strategy relevant persons must, where relevant:

A) consider whether collaboration or co-operation with others with interests in the region could reduce costs, increase recovery of economically recoverable petroleum or otherwise affect their compliance with the obligation in question

B) where it is considered possible that such collaboration or co-operation might improve recovery, reduce costs or otherwise affect their compliance with obligations arising from or under this Strategy, relevant persons must give due consideration to such possibilities, and

C) co-operate with the OGA.

British Energy minister Amber Rudd has now launched a consultation on the MER Strategy, which – once in force, would be binding on holders of offshore petroleum licences; operators appointed under those licences; operators of upstream petroleum infrastructure; and persons planning and carrying out the commissioning of upstream petroleum infrastructure assets in the North Sea.

She said: “The North Sea still offers significant value for the UK – up to 20 billion barrels of oil equivalent could still be extracted, and the industry supports 375,000 jobs.

“But we need to provide clarity to investors in UK oil production, which is why we have launched a consultation on a Strategy to Maximise the Economic Recovery of the North Sea.

“The principle objectives this Strategy is designed to meet have been challenged and amended in the Energy Bill by the House of Lords. But we intend to overturn this amendment when the Bill is considered in the Commons.”

“The Wood Review described the challenges facing the North Sea oil and gas industry. Those challenges were serious at the time the Review was published, but with the dramatic fall in the oil price since that time, the situation has got considerably tougher.

“We need to move quickly to ensure we can safeguard this important industry, which is why we’ve acted swiftly to set up the OGA. The MER UK Strategy is a legal document containing obligations with which those bound by it are required to comply.”

Measures proposed in the Energy Bill currently before parliament would broaden the reach of the MER Strategy to relevant offshore installations and their owners.

See also:

Getting MER from the UK North Sea: The 2016 Oil & Gas Collaboration Conference, Aberdeen

http://www.scottishenergynews.com/getting-mer-from-the-uk-north-sea-the-2016-oil-gas-collaboration-conference-aberdeen/

collaboration2

The draft MER Strategy:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/477776/MER_UK_Consultation_document.pdf

The deadline for responding to the consultation is 11.45am on 8 January 2016:

Email to: woodreviewimplementation@decc.gsi.gov.uk

Write to:

MER UK Strategy Consultation 
William Cutler, Area 4C 
3 Whitehall Place 
London 
SW1A 2AW

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