With the introduction of the Energy Bill in the House of Lords on 9 July 2015, a major step was made towards meeting the Government’s commitment to implement the recommendations of the 2014 Wood Review. The Bill contains a number of key provisions which will underpin the principal Wood Review recommendation to introduce a strategic framework against which Government, industry and the regulator can successfully pursue the goal of maximising economic recovery of hydrocarbons from the North Sea basin.

The new regulatory body, the Oil and Gas Authority (OGA), was established as a Government agency on 1 April 2015. The Bill will enable the Authority to assume the status of a Government-owned company and to take over full responsibility for a range of oil and gas functions, including licensing, which currently reside with the Secretary of State.

Further provisions are designed to provide the OGA with new powers which will enable it to be a fully effective steward and regulator of offshore oil and gas recovery. The Bill enshrines collaboration as being central to the OGA’s way of working, while at the same time establishing a suite of new powers in the areas of dispute resolution, information sharing and meeting attendance. It also provides a framework giving the OGA the ability to enforce sanctions where it identifies behaviour contrary to the MER UK strategy or licence conditions more generally.

The Bill as introduced covers the key areas stemming from the Wood Review recommendations. It is expected that other, primarily more technical, provisions will be introduced by Government amendment as the Bill progresses through its Parliamentary stages, including on areas such as decommissioning, third party access to oil and gas infrastructure and cost recovery powers.

In addition to these measures, the Bill will enable more comprehensive charging for permits and licences for environmental and decommissioning activity.

To learn more about other measures in the Bill please follow the link to the Energy Bill page.

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