DRILLBITS
Monthly eNewsletter from the IADC

Lost Investment during Pandemic could Threaten UK’s Green Recovery Absent Oil & Gas Industry Contribution

On 16 December 2020, the United Kingdom’s oil and gas regulator Oil & Gas Authority (OGA) presented their revised strategy pursuant to Section 9G of UK’s Petroleum Act of 1998 in an effort to support the country’s net-zero target. This target is defined as UK’s net carbon account for the year 2050, as set out in section 1 of the Climate Change Act 2008.

Neither the House of Commons nor the House of Lords passed a negative resolution, so on 11 February 2021, the OGA announced its revised oil and gas strategy would go into immediate effect.

The revised Strategy reflects the ongoing energy transition and features a range of net-zero obligations on the oil and gas industry, including stepping up efforts to reduce production emissions, support for carbon capture and storage (CCS) projects, and unlocking clean hydrogen production.

OGA declared a two-fold Central Obligation for all “relevant persons in the exercise of their relevant activities” within the oil and gas industry to do the following:

  1. Secure that the maximum value of economically recoverable petroleum is recovered from the strata beneath relevant UK waters
  2. Take appropriate steps to assist the Secretary of State in meeting the net zero target, including by reducing as far as reasonable in the circumstances greenhouse gas emissions from sources such as flaring and venting and power generation, and supporting carbon capture and storage projects

OGA revised their Strategy since “oil and gas currently provide about 75% of the UK energy consumption and official government forecasts expect oil and gas to remain important to the UK’s overall energy mix for the foreseeable future, including as we transition to net zero.

In order to get meet their target, OGA outlines their Support Obligations for the industry; namely, to collaborate with each other and cooperate with the nation’s regulator. The OGA is now actively implementing the revised strategy into its work; guidance documents are being updated to help industry understand how operations may need to be altered in order to achieve the new requirements.

The OGA made the new Strategy available on their website.