OGA Introduces New Measures for Operators in UKCS
The Oil and Gas Authority (OGA) is introducing new measures to ensure operators ‘work appropriately with the supply chain and derive maximum value from project activity’.
Under the new measures, operators will be required to develop Supply Chain Action Plans (SCAPs) in respect of all new projects valued at more than $33 million (GBP 25 million), including decommissioning activities.
SCAPs will include details such as the maturity of projects, demonstrating stages of development, expected dates of construction, delivery of first hydrocarbons or, in the case of decommissioning, removal of first infrastructure. A project plan including milestones of key interactions with the supply chain, e.g. procurement decisions, engagement events, strategy endorsements and award recommendations, is also expected.
If requested, the OGA will provide practical support to operators in preparing and submitting SCAPs, which will be reviewed based on engagement, trust, innovation and quality criteria, according to the OGA’s guidance notes published Tuesday.
The OGA says it will welcome SCAP submissions from January 2018 and expects to see them included in all field development plans and decommissioning programs from April 1, 2018.
Workshops are being held in early 2018 to ensure a wide understanding of the structure and expectations for these plans. At the end of the first year of submissions, the OGA says feedback will be sought from industry and the process will be ‘refined as necessary’.
The purpose of SCAPs is to assist operators in demonstrating their contract strategies and concepts are comprehensive and well-positioned to deliver ‘best value’, according to the OGA. SCAPs have been structured for the offshore environment and the process has been piloted by Chevron, Repsol and Premier Oil, based on real projects.
“Supply Chain Action Plans provide a golden opportunity to drive behavioural change and promote a culture of active engagement between operators and the service sector, where it is accepted many of the solutions to enable MER UK exist,” Bill Cattanach, head of supply chain at the OGA, said in an organization statement.
As highlighted in the OGA report ‘Lessons Learned from UKCS Oil and Gas Projects 2011-2016’, a significant number of recent projects carried out in the UKCS were delivered late and over budget. The report identified a number of contributory factors and made recommendations for future improvement, including early engagement with the supply chain.
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