North Sea Oil & Gas –
The North Sea Regulator
Michael Reid
Head Offshore Inspectorate Team
The Environmental Law Enforcement Conference
Edinburgh
Thursday 27 June 2013
Topics
•
Background to DECC
•
Environmental Management Team
•
Offshore Environmental Inspectorate
•
Decommissioning Unit
•
Maitland Review - Deepwater Horizon
– Emergency Response
– National Exercise 2011
– SOSREP
– Liability and Insurance
•
Future Developments
Background to DECC
Background to DECC
Department of Energy and Climate Change
Responsible for
•
•
All aspects of UK Energy Policy
Tackling global climate change on behalf of UK
Regulators for Offshore Oil & Gas Industry
•
•
•
•
DECC – Environment, Consenting, Decommissioning
HSE – Health & Safety
MCA – Shipping, Counter Pollution
SEPA/EA – Radiation, Waste
Background to DECC
UK Reserves, Who Owns Them?
Petroleum Act 1998
• Ownership of oil and gas within the UK, within its territorial sea, and on its
Continental Shelf, rests with the Crown
• Act gives the UK Government the right to grant licences to explore for and
exploit resources
• Licences include terms and conditions
‒ Exploration Licences
‒ Production Licences
• Operational Phase subject to consents and approvals, e.g. to drill wells, install
pipelines etc.
• Decommissioning Phase subject to approval of formal programme to abandon
or remove facilities
Background to DECC
DECC – Offshore Environment and Decommissioning
Responsible for:
•
Licensing UK oil & gas developments, including CCS & gas storage
•
Environmental regulation of offshore energy developments through permits /
consents
•
Inspection against permits
•
Enforcement Action
•
Review decommissioning plans for suitability
Background to DECC
How Does DECC Look After the Environment?
Policy
• Influencing EU, OSPAR and Domestic Policy
Implementing Policy
• Preparing regulations and agreeing voluntary initiatives
Management
• Approvals - environmental assessment of proposals, and issuing permits for
discharges, emissions and other activities
• Decommissioning - financial guarantees, programme approval
Enforcement
• Inspections, investigations and prosecutions
• Secretary of State’s Representative (SOSREP)
ENVIRONMENTAL
MANAGEMENT TEAM
The Offshore Oil and Gas Life Cycle
Exploration Activity
e.g. Seismic Surveys
Clean Sea Bed
Each stage has an environmental
impact that has to be assessed
Drilling Operations
Field Developments
Decommissioning
Production
Operations
UKCS Offshore Environmental Regulation
Generic and
Wide Ranging
Project and
Site Specific
Activity
Specific
Enforcement
STRATEGIC ENVIRONMENTAL ASSESSMENT (SEA)
HABITATS AND SPECIES DIRECTIVES (AA)
LICENSING
ENVIRONMENTAL IMPACT ASSESSMENT (EIA)
HABITATS AND SPECIES DIRECTIVES (AA)
Chemical Use
And Discharge
Discharges
Of Oil
Atmospheric
Emissions
Incident
Response
Regulatory Compliance
Pollution Prevention,
Inspections and Investigations
Licensing and Operatorship
Process for Operator Approval
• Formal application submitted to Licensing Authority, including details of
technical, environmental and financial competence
• DECC Environmental Teams will interview all new applicants
• Environmental assessment includes review of Company Management
Structure, Corporate Environmental Policy, Environmental Record,
Environmental Management System and Pollution Liability Arrangements
Well Operations
Robust Assessment Process
• Technical Assessment by DECC Exploration / Field Teams
• Applicant must provide details of well location, target and architecture to obtain
consent. Exploration / Field Teams can reject applications
• Environmental Assessment undertaken by DECC Environmental Operations
Unit
• Applicant requires a number of environmental approvals, permits before
operations can proceed
The SEA Programme
EC Directive 2001/42 on the assessment of the effects of certain
plans and programmes on the environment
SEA undertaken in specific geographical
areas prior to each licensing round
Total cost to date approximately £21M
Project and Site Specific Assessments
EC Directive 85/337/EEC on the Assessment of the Effects
of Certain Public and Private Projects on the Environment
Mandatory Environmental Statement
•
Field developments requiring consent for the production of >500 tonnes of
oil per day or >500,000 m3 of gas per day
•
Extension of a development consent involving an increase in production
that exceeds the thresholds detailed above
•
Construction of any pipeline of >40 km in length and >800 mm diameter
Recommended Environmental Statement
•
Qualifying activities in sensitive areas, or in areas where there has been no
previous, similar, activity, e.g. drilling in previously unlicensed blocks West
of Shetland
Directions
•
Other activities, e.g. drilling operations, well tests, small production
increases and small pipelines, require a mini-ES to confirm that an ES is
not required
Conservation / Biodiversity
EC Directives 92/43/EEC on the Conservation of Natural Habitats and
of Fauna and Flora and 79/409/EEC on the Conservation of Wild Birds
•
Potential conservation / biodiversity issues must be
identified and addressed in the SEA and EIA
•
DECC required to undertake an Appropriate
Assessment (AA) if a plan or project could affect
integrity of a protected site or affect the protected
species relevant to that site
•
If the AA finds no significant effect – DECC can
approve the proposals
•
If the AA concludes the integrity of the site, or the
protected species, could be adversely affected –
DECC may refuse or require modification of the plan
/ project
Protected Species Issues
Special Protected Areas (SPAs) and SACs:
•
Coastal SPAs for seabirds, which are to be extended offshore to include feeding
areas
•
Specific areas and times of the year are considered to be to be particularly
sensitive for seabirds found further offshore – OPEP content
•
SACs for Bottlenose Dolphin populations in Moray Firth and Cardigan Bay have
impacted licensing and exploration activities
•
Specific areas and times of the year are
considered to be particularly sensitive for larger
cetaceans (offshore) and seals (near-shore) –
OPEP content
•
Significant research being undertaken to provide
a better understanding of potential impacts
Control of Discharges
Chemicals and Oil Discharges
•
Offshore Chemical Regulations 2002 - The Chemicals Regulations
•
Offshore Petroleum Activities (Oil Pollution Prevention and Control) Regulations
2005 - Oil Discharge Regulations
– OSPAR Harmonised Mandatory Control System
– Chemicals permits required for all offshore operations
– Controls use and discharge of all operational chemicals
– OSPAR controls on produced water, ballast water, drainage etc
– Oil discharge permits required for all major waste streams contaminated with reservoir
hydrocarbons or other oils
Both recently amended to extend provisions
Control of Atmospheric Emissions
Combustion Equipment and Flare Emissions
•
The Offshore Combustion Installations (Prevention and Control of Pollution)
Regulations 2001 – the IED Directive
– All facilities with aggregated capacity of >50MW(th)
– Controls mass of NOx, SOx CO and UHC emissions
– Monitoring requirements
•
The Greenhouse Gases Emissions Trading Scheme Regulations 2005 – the
EU ETS Regulations
– All facilities >20MW(th)
– Offshore sector restricted to CO2 from combustion plant
– Trading scheme based on CO2 allocations and monitoring and reporting of
emissions
OFFSHORE
ENVIRONMENTAL
INSPECTORATE
Offshore Oil and Gas - Operations On United
Kingdom Continental Shelf (UKCS)
470 Installations - 58 Licensed Operators
•
•
•
•
10% floating installations
30% subsea installations
50% small steel installations
10% large steel or concrete installations –
potential derogations for abandonment
Approx 35,000 km pipelines
• 10,000 km major pipelines
Currently 28 Mobile Drilling Units (MoDUs)
Remit of Inspectorate
Assess &
Review
Combustion
Emissions
Flare
Inspect
Drilling –
Cuttings and
fluid
management
Respond
Investigate
Operational
Systems
Procedures
Bunkering
Chemical Use
& Discharge
Enforce
Accidental
Releasesoils and
chemicals
Production
Process Produced Water
Assess – Inspect – Respond – Investigate – Enforce
Exploration and Production - Drilling Activity
Production – Oil, Condensate and Gas
Operational Assessments and Inspections
Regulatory Reviews
• Linked to risk-based approach
• Onshore meetings with licence operator and drilling contractor, particularly
new operators or MODU owners, or when the MODU is new to the UKCS
• Review of documentary evidence , procedures, competencies etc., to
confirm that arrangements are compliant and fit for purpose
• Liaison with HSE to confirm MODUs have accepted UK safety case
Operational Assessments and Inspections
Offshore Inspections
• Linked to risk-based approach
‒ Unproven Operations – New Operator / New Drilling Contractor / New MODU
‒ Well type
‒ Reservoir type
‒ Estimated liquid hydrocarbon flow rates
‒ HPHT
‒ Well location
‒ Water depth
‒ Distance to the shore or nearest median line
Operational Assessments and Inspections
Offshore Inspections (continued)
• Pre Spud inspections undertaken prior to commencement of operations for
MODUs new to UKCS and for the most complex wells
• Pre Reservoir inspections undertaken prior to drilling reservoir sections for
high flow-rate wells
• Routine MODU inspections undertaken at regular intervals, with frequency
dependent upon the nature of the operations
• Liaison with HSE for joint inspections
UKCS Oil Spill Statistics
2008-2012*
(*2011 & 2012 data subject to change)
Total Volume Released - Tonnes
Total Number of Oil Reports
160
300
290
140
293
284
280
270
260
120
100
271
272
154
80
250
248
240
60
40
230
20
220
0
2008
2009
2010
2011
2012
51
37
2008
2009
2010
42
40
2011
2012
UKCS Chemical Spill Statistics
2008-2012*
(*2011 & 2012 data subject to change)
Number of Chemical Reports
Chemicals Released to Sea (Tonnes)
250
200
1400
1200
180
150
242
1300
227
1000
163
175
800
100
600
703
400
593
50
410
200
402
0
0
2008
2008
2009
2010
2011
2012
2009
2010
2011
2012
UKCS Statistics 2007 – 2011*
High Level Cause Analysis
(*2011 & 2012 figures subject to change)
2008
50
45
40
35
30
25
20
15
10
5
0
Hose
Failure
Pipework
Leak
2009
2010
2011
Caisson Seal Failure Tank Filling
Level
Overflow
Overflow Controller
2012
Drain
Overflow
Valve
Failure
Investigations
Common Factors and Learning
•
•
•
•
•
•
•
•
•
•
•
Routine Operations
Reinforce Risk Assessment procedures
Procedures ‘not followed’ or ‘not in place’
Review competency and training
Ensure roles and responsibilities are understood
Communication failures
Maintain ownership of task
Equipment failure / lack of maintenance
Operator error
Lateral learning within / between companies
Post incident Implications
Investigation and Enforcement Policy in Practice
• Size, scale and nature of the spill
• Environmental impact and potential impact
• Location of incident, e.g. special area of conservation or other
environmentally sensitive area
• Permit holders/operators past performance
• Previous enforcement record of the
installation
• Seriousness of any potential
breach of law
• Notification that may give rise to
public concern or media interest
Enforcement Policy
• The Enforcement Policy describes an escalating tariff of
enforcement:
• Enforcement options that can be applied by OED inspectors
include:
–
–
–
–
–
Enforcement letter
Enforcement notice
Prohibition notice
Revocation of a permit
Prosecution
DECOMMISSIONING
UNIT
What Are We Responsible For?
•
•
•
•
•
•
•
Protecting the Government and Taxpayer from incurring decommissioning
liabilities
Maintaining statutory liabilities on operators
Government policy and industry guidelines
Supporting operators as they develop their decommissioning programmes
Approving decommissioning programmes and monitoring programme
execution
Management of post decommissioning activity
Cradle to grave involvement
Complexity and Scale
•
•
Health and safety
Politics
•
•
Economics
•
Technical
Stakeholder engagement
Context
•
•
•
•
•
•
•
•
Decommissioning is taking place under the taxpayer’s radar
Increasing press coverage
Difficult economic period
High energy and fuel costs
Highly profitable industry
Significant tax relief
Freedom of Information
Actual costs >40% greater than estimated in approved programmes
Decommissioning
• Technical Feasibility
• Environmental Impact
• Other Users of the Sea
• Safety
- Well abandonment
- Decontamination of facilities
- Topsides, jackets and pipelines
- Seabed disturbance
- Derogations (footings / concrete)
- Drill cuttings
- Monitoring
- Long-term liability
£30-40 billion and rising
How much work is there?
Items Reviewed Over the Last 2
Years
Notfications Issued
Installations
600
500
400
300
200
100
0
50
70
07-08
08-09
•
£7 Billion estimated decommissioning
costs
20
Potential
Likely
30
20
40
09-10
10-11
18 active
decommissioning
30 programmes
Decommissioning
•
60
40
Items Reviewed
06-07
50
60
Pipelines
•
Further 20 programmes on10the horizon
Actual
0
Q3
Q1
Q2
Q3
2009-10 to 2010-11
10
FDP
0
Q4
Licence Transfers
IPR
PWA
Responding to increasing workload
• Continuous improvement
– Measuring internal performance
– Maximise use of web based systems
– Streamlining programme content
• Strengthen the relationship with industry
– Promote regular dialogue and open door approach
– Secondment programme
– Participate in industry working groups
• Recovering our costs from April 2012
– simple, fit for purpose, fair to both the taxpayer and industry
– balance resources against increasing workload
MAITLAND REVIEW –
DEEPWATER HORIZON
Deepwater Horizon Review
As a result of the Deepwater Horizon incident in April 2010 the UK Government
commissioned an independent review (Maitland) of the UK Offshore Oil and Gas
Industry, looking at areas such as
• Well Planning and Control
• Environmental Protection
• Emergency Response
Emergency Response
OPEP Guidance
•
Current OPEP Guidance viewed as robust and enabled operators to produce
an OPEP which is a fit for purpose operational document which sets out clear
procedures to respond to offshore oil pollution incidents
•
However:
Letters with revised Guidance to industry sent 23 December 2010; July and
September 2011
o Operator must have systems and procedures in place to source and initiate
contract for controlling the well situation – details of time taken to source and
deploy equipment both for capping and relief well drilling
o Confirmation of operators financial position or insurance provision to cover
costs of responding to a spill, deploying a capping device or drilling a relief
well.
•
OPEP Guidance strengthened and re-issued July 2012
Emergency Response
Environmental Assessment
•
All offshore operations must be covered by an Oil Pollution Emergency Plan, as required
under Oil Pollution Preparedness Response and Cooperation Convention
•
Development and production wells are incorporated within the main Field Plan and
exploration and appraisal wells are either likewise an appendix to this plan or a completely
separate plan
•
DECC requires additional information within the OPEP to provide evidence that systems
and procedures are in place that allows both the Operator and their third party oil spill
response contractor(s) to respond effectively to any pollution event
•
Well operations plans must assess the worst-case scenarios of an uncontrolled release of
hydrocarbons (a blow out) and the loss of the installation’s maximum fuel inventory
Emergency Response
Environmental Assessment
•
Operators responsibility to ensure the OPEP clearly identifies the potential release
scenarios, including the worst case scenario, the potential environmental impacts and the
strategies/measures that will utilised to respond to and mitigate those impacts
•
The measures that must be detailed include, where applicable, the deployment of a
capping device and/or the drilling of a relief well – with all the logistical timeframes for such
deployment
•
Plans must include modeling to assess whether, and when, spills would cross median lines
or beach (UK or adjacent States)
•
Plans must demonstrate operators ability to respond to a spill and the procedures that
would be followed, and confirm they have the financial capacity to deal with the potential
consequences of the spill
National Exercise 2011
Exercise Sula Overall Aim & Objectives
To exercise the United Kingdom’s (UK) response to major oil spill from deep water
drilling incident (similar to Macondo / Gulf of Mexico incident)
•
•
•
•
•
Test National Contingency Plan for marine pollution from an offshore installation
Demonstrate Oil and Gas Industry’s ability to respond to major deepwater well control
incident and resulting oil spill
Exercise Chevron Well Control, Oil Spill Response and Tier 2&3 emergency response
plans
Test liaison on National and International basis (Norway, Denmark, Faeroe Islands)
Exercise National Contingency Plan media response and management
In addition:
•
Physical demonstration of Industry Tier 2/3 oil spill response assets
‒ Surveillance and dispersant aircraft
‒ Marine vessels – dispersant and oil skimming
‒ Shoreline protection and counter pollution response
National Exercise 2011
SULA Scenario
• Chevron drilling Cambo 4 appraisal well in
Atlantic Ocean 162 kilometres West of
Shetland Islands, 170 kilometres east of
Faeroes and 8 kilometres from the median
line between UK and Faeroese waters.
• Water depth is 1090 metres and well flowing
at 6,000 barrels of oil per day.
• Emergency disconnect occurs of Stena
Carron after failure of marine riser tensioner
system and an increasing sea state.
• Failure of subsea test tree and BOP system
to fully close.
• Resultant uncontrolled release of oil to sea.
National Exercise 2011
SULA - Resultant Release (6,000bopd)
79 days duration with 68,000 tonne gross release
Exercise Artificiality
Weather simulated to drive oil towards
Shetland.
• Surface (OSIS) modelling predicts
‒ first oil beaches in 9 days
‒ Max Oil Day 18 (8,700 tonne)
• Alternate OSCAR Modelling
‒ Majority of oil remains within water
column
‒ First beaching day 12
‒ 83 tonnes of oil beaches in Shetland
‒ Further 12 tonnes beaches Norway
day 77
‒ 0.14% oil beached
Exercise Artificiality
• Models do not account for counter
pollution measures.
• Assume ongoing release with no well
intervention.
National Exercise 2011
SULA - Increased Release Scenario
Day 2 injects will assess response capability with
increased oil rate of 88,000 bopd.
Replace BOP Scenario (2 day increase)
• 34,404 tonne gross release
• >75% remains in water column
• Beaching in 12 days
• 114 tonne estimated beached
Failure case (79 day increase)
unable to replace BOP
• 926,000 tonne gross release
• 800 tonne beached on Shetland
• Majority remains within water column
• Norwegian Coastline beaching 60 days
Exercise Artificiality
• Models do not account for counter pollution
measures.
• Assume ongoing release with no well
intervention.
• Worst case exercise weather conditions.
• Maximum theoretical well flow condition.
National Exercise 2011
Exercise Sula – Recommendations
Following the completion of the exercise, a report was published and contained
therein were 13 recommendations and 15 Observations/Best practice issues published on both DECC and MCA web sites.
A Recommendations Review Group established to oversee the outcome of the
recommendations. Target dates were set and the group required monthly
updates from the action assigned personnel.
Report of the Recommendations Review Group is published on the MCA web
sites.
http://www.dft.gov.uk/mca/mcga07-home/emergencyresponse/mcgadops_cp_environmental-counter-pollution_and_response.htm
SOSREP
SOSREP
National Contingency Plan (NCP)
•
As a Party to the UN Convention on the
Law of the Sea (UNCLOS), the UK as
do all coastal states, has an obligation;
‘to protect and preserve the marine
environment.’
•
The Plan is one of the measures that the
UK has taken to meet this obligation.
•
Currently under review
SOSREP
History and Development
•
•
Following the Sea Empress incident in 1996 – 72,000 tonnes crude
released
Lord Donaldson’s Review of Salvage and Intervention and their
Command and Control
‒ 26 recommendations – 4 deemed fundamental
1)
2)
3)
4)
The ‘Trigger’ point is when there is “a threat of significant pollution”
to the UK’s pollution control zone, territorial waters or coastline;
MCA as a whole should play a much larger part in operations;
Response to the threat of pollution from or involving an offshore
installation to be compatible with same from shipping casualty –
need for new legislation;
Involvement of Ministers in Operational decisions is not a practicable
option
SOSREP
History and Development
‘There should be ‘ultimate’ control of salvage
by a Secretary of State’s Representative acting
in the overriding public interest’
‘SOSREP’
Secretary of State’s Representative for Maritime
Salvage and Intervention
SOSREP
Role
To represent the Secretaries of State
for Transport and Energy & Climate
Change by removing or reducing the
risk to persons, property and the UK
Environment arising from accident
involving ships, fixed or floating
platforms or sub-sea infrastructures
within UK waters, within the
remainder of the UK Pollution Control
Zone and on the UK Continental
Shelf
SOSREP
Function
•
One person to act as representative of Secretary of State’s
•
Free to act without recourse to higher authority
•
Ultimate and decisive voice
•
Ultimate control
•
Cannot choose to ignore a situation
•
Tacitly approves all actions
•
During operations must be
“Backed or sacked”
SOSREP
Powers of Intervention
•
Merchant Shipping Act 1995, as amended;
•
•
•
•
Dangerous Vessels Act 1985
Maritime Security Act 1997
Offshore Emergency Pollution Control (EPC) Regulations 2002
Marine Safety Act 2003
•
Powers cannot be used in anticipation of an incident
•
In all cases an accident must have occurred
SOSREP
Powers of Intervention
•
Purpose:
‒
‒
•
Application:
‒
‒
‒
•
Safety – UK Territorial Waters (12 miles)
Pollution – UK Pollution Control Zone (200 miles)/median line
Pollution - Offshore Installations – UK Continental Shelf
Directions:
‒
‒
•
Removing, preventing or reducing the risk to safety or of pollution
Securing safety of a ship/installation, persons or property
Ship/Installation is/is not to be moved, use of facilities, remove from UK
waters
Destruction of a vessel or installation!
Served to:
‒
Masters, owners, offshore operators, managers, servants etc.
Deepwater Horizon Review
As a result of the Deepwater Horizon incident in April 2010 the UK Government
commissioned an independent review (Maitland) of the UK Offshore Oil and Gas
Industry, looking at areas such as
• Well Planning and Control
• Environmental Protection
• Emergency Response
• Learning from Incidents and Best Practice
• Implementation Assurance
• Competency and Training of Work Force
• Work Force Engagement
• Liability and Insurance
Liability and Insurance
Financial Responsibility Guidance
What is it DECC requires?
Assurance that OPEP will be implemented, when required, including the
mitigation measures identified
Assurance that operators have accurately calculated the risks associated with
the planned activity
Assurance that appropriate financial mechanisms are in place to meet those
risks
DOES THE OPERATOR HAVE THE FINANCIAL RESOURCE TO
IMPLEMENT THE RESPONSE STRATEGY AND/OR DEAL WITH
COMPENSATION CLAIMS?
Liability and Insurance
Financial Responsibility Guidance
The level of Financial Responsibility that operators are required to
demonstrate for any particular well should be calculated by establishing the
combined:
– 1st party costs - Cost of well control, and
– 3rd party costs - Cost of financial remediation and compensation from
pollution
This should be provided at the time the OPEP is submitted to DECC
for approval, unless otherwise agreed with DECC
Liability and Insurance
Financial Responsibility Guidance
Financial Responsibility can be verified by means of
–
–
–
–
Reliance on credit/financial strength rating of the operator or co-venturer
Insurance
Parent company/affiliate undertaking
Any combination of the above
DECC also requires confirmation through a Resolution of the Board of
Directors of the Operator Company and Board of any Joint Venture
Partners that DECC Guidance Note and OGUK Guidelines have been
implemented.
Deepwater Horizon Review
As a result of the Deepwater Horizon incident in April 2010 the UK Government
commissioned an independent review (Maitland) of the UK Offshore Oil and Gas
Industry, looking at areas such as
•
•
•
•
•
•
•
•
Well Planning and Control
Environmental Protection
Emergency Response
Learning From Incidents and Best Practice
Implementation Assurance
Competency and Training of Work Force
Work Force Engagement
Liability and Insurance
• Regulator Issues
• Technology Development
FUTURE
DEVELOPMENTS
EU Directive on Safety of Offshore Oil and Gas
Operations
The objective of this Directive is to
•
reduce as far as possible the occurrence of major accidents relating to offshore oil and
gas operations and limit their consequences
•
increase the protection of the marine environment and coastal economies against
pollution
•
establish minimum conditions for safe offshore exploration
•
exploit oil and gas and limit disruptions to Union indigenous energy production
•
improve the response mechanism in case of an accident
EU Directive on Safety of Offshore Oil and Gas
Operations
•
Appointment of Competent Authority
– Assess and accept reports on major hazards
– Oversee compliance by operators, including inspections, investigations and
enforcement actions
– Produce Annual Plans securing compliance with the regulatory framework for
major accident prevention
– Produce reports
•
Functions of the Competent Authority shall be carried out within an
authority that is independent of functions relating to economic development
of the offshore resources, licensing and collection and management of
revenues.
Government and Industry Working in Partnership
•
PILOT is the Joint Oil and Gas Government
Industry and Trade Union strategic forum,
originally started in 2000 and refocused in 2010
•
Unique collaborative forum which works on the
key issue affecting the UKCS
•
8 industry representatives at MD level from Oil
and Gas
•
UK and 5 independent industry members
appointed by the Ministers
•
Trade Union representative from Scottish TUC
Role:
̵
To secure full economic recovery of our hydrocarbon resources
̵
Secure the long term future of the UK oil and gas industry
̵
Ensure security of energy supply for the UK
What PILOT is working on now and for the future
Current PILOT Work Areas
•
•
•
•
Infrastructure – working to ensure the infrastructure is available to exploit the
remaining reserves.
Improved Oil Recovery/ Enhanced Oil Recovery – working to improve our
recovery rates in the UK.(currently leaving more behind than recover)
Access to Capital – ensuring the funds are available for investment.
Supply Chain – drive on increasing UK content.
New work streams
» Technology
» Exploration
The Future
•
The oil and gas sector has been one of the UK’s major industrial success
stories, a key contributor to growth, jobs and tax revenue
•
41 billion barrels produced and circa 20 billion barrels or more could still be
produced
•
New challenges face the offshore oil and gas industry in extracting this oil and
gas reserves
•
Factors to be considered
– Declining exploration and production rates
– Aging infrastructure risk of premature decommissioning
– New areas of exploration – deep water West of Shetland
The Future
Secretary of State for Energy and Climate Change has initiated a review
on challenges facing UKCS
•
Licensing regime
•
Optimising use of and extending life of infrastructure
•
Production efficiency
•
Better collaboration across industry
•
Increasing the exploration effort
•
Maximising the use of enhanced oil recovery techniques
•
Effectiveness of Government Stewardship regime in line with the increased
technical and commercial complexity of mature market
Emerging conclusions from the review to be published in the autumn with the
final report and recommendations to be published in early 2014.
THANK YOU