The Oil and Gas Authority (OGA) recently proposed to amend its strategy and is currently seeking views from industry as part of a consultation process.

While MER UK remains the primary focus of the revised strategy, it has been re-positioned against the backdrop of Net Zero. The proposed revisions will have a notable impact on the sector and be in place for the next four years. Now, more than ever, industry is encouraged to engage with the OGA and have its say on the proposals. Oil and Gas UK (OGUK) has produced a draft response to the consultation and is engaging with industry, seeking views and comments to incorporate into its response. Individual responses from operators are also encouraged to allow tangible examples to be given.


The OGA's strategy sets out how the "principal objective" of maximising the economic recovery of the UK's offshore oil and gas reserves (MER) is to be achieved. It is obliged to produce such a strategy by virtue of section 9A of the Petroleum Act 1998. In addition, the OGA is legislatively bound to review the strategy every four years and either produce a new strategy or revise the current one (section 9F). Aside from these legislative obligations, it seems that the main driver behind the changes is the UK Government's commitment to achieve net zero greenhouse gas emissions by 2050 (Net Zero).

Name change

Before discussing the substantive changes to the content of the strategy, it is worth highlighting that the OGA proposes to change the name of the strategy from "MER UK Strategy" to "OGA Strategy". The likelihood is that the name change will have little substantive impact on industry, but it is worth noting the shift in emphasis.

The central obligation

The strategy already sets binding obligations on licence holders, licence operators and operators of upstream petroleum infrastructure. The revised strategy proposes to amend the central obligation. This comes in the form of the addition of what has been termed the Net Zero "limb".

This means that licence holders and operators must take the steps necessary to secure MER and in doing so take appropriate steps to assist the Secretary of State (SoS) in achieving Net Zero, 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 (CCS) projects. It is important to note that these are simply examples and are not themselves specific obligations.

OGUK is keen to engage in the process and recently facilitated workshops with industry and OGA representatives. During one workshop discussion the OGA recognised that while the strategy outlined some examples, every offshore oil and gas field is unique. Indeed, some fields will be more suited to CCS and/or other projects than others.

Industry has also expressed concern that the references to Net Zero and reduction of emissions may create confusion with regard to the regulation of emissions. OPRED deals with the EU Emissions Trading Scheme (EU-ETS). Clarification on how the two approaches sit alongside one another would be welcomed.

The supporting obligations

Several changes are proposed to the supporting obligations set out in the strategy. These bind licence holders and operators in the same way as the central obligation and aim to demonstrate how it will be achieved.

Carbon Capture and Storage

The importance of CCS to achieving Net Zero is recognised by a completely new section in the revised strategy. This includes licence holders and operators collaborating with proposed CCS projects and allowing access to infrastructure for such purposes on “fair and reasonable” terms. This has a sense of familiarity and reflects existing regulation in terms of access to upstream petroleum infrastructure.


A new governance supporting obligation has been added, proposing that licensees must apply "good and proper governance" at all times. This is not a defined term in the strategy. There are already several codes / guidance documents on this topic and so clarification of whether this new supporting obligation is trying to fill a gap or simply bring the strategy in line with existing codes / guidance would be helpful.


The proposed strategy extends the technology supporting obligation to existing technologies (as well as new and emerging ones). Furthermore, licence holders and operators must ensure these are developed (as well as deployed). These are subtle changes but have the potential for significant impact.

Operators have expressed concern about these changes, submitting that they are oil and gas operator companies, not technology companies. This proposed amendment may be too wide in its remit.

This links to the uncertainty surrounding the development of technology. Ordinarily, the supply chain would lead in developing technology, however it is not bound by the strategy obligations. Would contracting with supply chain companies on developing technology meet the obligation? It is expected that the consultation responses will seek to clarify this.


CCS is now incorporated into the decommissioning supporting obligation. This provides that licence holders and operators must “be able to demonstrate” that all viable options for the continued use of infrastructure including re-use for CCS projects have been “suitably explored”. This is a higher obligation than the present strategy imposes and as a result, operators will have to actively consider CCS (as a minimum) in their decommissioning planning.

It is useful to highlight an energy efficiency point here too. The asset stewardship supporting obligation provides that operators and owners of infrastructure are to achieve optimum levels of performance, including production efficiency, energy efficiency and cost efficiency, for the expected duration of production. The addition of energy efficiency here could be challenging. Much of the infrastructure in the UKCS is old and while much of it may still be serving its purpose in terms of production efficiency, it may not necessarily be energy efficient. This could potentially result in the premature decommissioning of certain assets and result in a conflict between the strategy's aims of MER and Net Zero.


There appears to be a concern from industry that actively undertaking CCS (and other) projects may be enforced by the OGA by virtue of the strategy. This highlights the importance of the safeguards. Paragraph 33 sets out that the strategy obligations do not require investment or funding of activities where "a satisfactory expected commercial return" will not be made. This remains unchanged in the new strategy. This is necessary to reflect the economic reality of investments (both in the UKCS and more generally) and its retention is welcomed.

The supply chain

As noted above, the strategy is not binding on the supply chain. However, as the supply chain is an integral part of the industry as a whole, it will play a crucial role in achieving Net Zero.

While paragraph 21 places an obligation on licence holders and operators to collaborate and cooperate with "persons providing goods or services relating to relevant activities" (i.e. the supply chain), there is no equivalent obligation on the supply chain. Proposals on how the OGA proposes to engage the supply chain on this would be useful.


The consultation closes on 29 July 2020. Following this, it is expected that the OGA will consider the responses over the summer with the aim of issuing a revision of the strategy later this year. A link to the consultation can be found here.