Responding today to an interim UK Government review of the offshore oil and gas industry, Scotland’s Energy Minister, Fergus Ewing called for a new UK Oil and Gas regulator to be set up in Aberdeen.
There are a number of reviews, commissions, and reports – including the one on offshore oil and gas industry headed by Sir Ian Wood – into this market sector.
But, unlike OFGEM – the UK’s Office of Gas and Electricity Markets regulator – there is no direct ‘OFGas + Oil Market’ regulator (‘OFGOM’). Ewing, said:
“Sir Ian Wood’s Interim Report suggests that a new regulatory body is needed in order to achieve the massive prize of maximising economic recovery of oil and gas.
“The Scottish Government is fully behind Sir Ian’s report. We believe it is essential that the recommendations are implemented with speed, and a shadow body be set up rather than await the outcome of primary legislation.
“We share Sir Ian’s view that the industry should finance this body, and since most of the developments in the North Sea and west of Shetland are managed from Aberdeen – which is Europe’s Oil and Gas capital – we believe the only conceivable principal location for the new regulatory body is in Aberdeen.”
This policy has been a consistent part of the SNP manifesto for more than 20 years. But the rapidly-approaching Scottish independence referendum, due to be held in October 2014 has given the policy fresh impetus. Ewing added:
“Sir Ian’s report today estimates that the prize from increased and effective collaboration could be an additional 3-4 billion barrels of oil equivalent over 20 years, which could be worth £200 billion.”
* Meanwhile, the Scottish Government has appointed an Independent Expert Commission on Oil and Gas, chaired by Melfort Campbell. The commission will consider specific proposals for providing long-term fiscal stability and predictability for the oil and gas industry, and will also make recommendations for the regulatory and licensing regimes. The commission will consider Sir Ian’s recommendations, and will report in Spring 2014.
* The Scottish Government’s Expert Commission on Energy Regulation – (another key policy plank for the SNP-led government ahead of the Scottish independence referendum) is due to publish its first interim report ‘soon’, according to St. Andrew’s House insiders. The Expert Commission on Energy Regulation – chaired by former nuclear industry lawyer Robert Armour – is not expected to publish its report as part of the Scottish Government’s ‘Independence Report’ on 26 November.