OGA Opens Investigation

OGA Opens Investigation
The UK Oil and Gas Authority has opened an investigation into a possible failure to maximize economic recovery for the UK due to a commercial disagreement.

The UK Oil and Gas Authority (OGA) has announced that it has opened an investigation into a possible failure to maximize economic recovery for the UK due to a commercial disagreement. 

According to the OGA, the investigation will, among other things, gather and assess further information to enable the OGA to reach a decision, offer the companies concerned the opportunity to provide written representations, and decide how the case should be resolved. The investigation has been launched under the OGA’s sanction procedure.

The case is said to concern the recovery of hydrocarbons, the OGA revealed, adding that it considers there to be sufficient initial evidence. The suspected failure took place at a time when the OGA was following the MER Strategy, which has since been succeeded by the current OGA Strategy. The new strategy places an obligation on the oil and gas industry to assist the Secretary of State in meeting the net zero carbon by 2050 target, the OGA notes on its website.

In a statement posted on its site, the OGA highlighted that it has a duty to regulate the industry and that it has communicated to industry the strategic significance the organization places on regulatory compliance to support industry’s social license to operate. The statement also highlighted an OGA letter to licensees and infrastructure owners published in June 2019, which outlined that too many issues were taking too long to resolve or ending up in deadlock between disputing parties, threatening MER UK.

The OGA’s role is to maximize the economic recovery of the UK’s oil and gas resources, while also supporting the move to net zero carbon, its website shows. The organization, which was created as one of the key recommendations of Ian Wood’s 2014 Review of the UK Continental Shelf, became an Executive Agency in 2015, and a government company in 2016. The OGA is largely funded by an industry levy.

To contact the author, email andreas.exarheas@rigzone.com


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