The Oil & Gas Authority ("OGA") published the final report on its Thematic Review into Industry Compliance with Regulatory Obligations on 29 October 2020. The OGA acknowledged that progress was being made by the industry, but also signalled an increase in enforcement action to secure compliance. The report noted that "[f]ollowing increased focus by the OGA, and subsequently by industry, the OGA is pleased to note a reduction in non-compliance. Nevertheless, the number of instances remains unacceptably high and the OGA will now be adopting a more proactive approach to the use of its powers where breaches are recorded, in order to ensure there is an effective deterrent to non-compliance."
The Review looked at six broad areas of regulatory obligations between licensees and the OGA:
- Licence mechanics
- Flaring, venting and production consents
- Pipeline works authorisations
- Wells consents
- Data requirements
- Statutory notification of meetings
While the majority of these areas were found to be positively rated following an industry survey, areas for improvement were also identified. The OGA report noted that "two areas rated slightly lower than the others were wells and licence mechanics. Whilst not rated particularly low, this information did provide the OGA with a view of the areas that might need more focus when examining the more detailed, question-specific survey outcomes."
Survey respondents advised that they would benefit from information, training and guidance on [regulatory obligations and how compliance can be achieved, which highlights the need for further collaborative working between the OGA and the industry.
For the industry, short term actions identified include setting up coordinators for each area covered by the thematic review, who will be a knowledgeable point of contact for the company, acting as an information conduit to and from the OGA. There coordinators are to be provided with generic email addresses to remove potential single points of failure and make it easier for the OGA to know who to contact within the company about a particular issue. Quarterly knowledge sharing meetings of those coordinators will assist, where they are not already held.
The OGA has committed to producing new wells guidance "covering what needs to be done in relation to wells and why, and the factors considered by the OGA when reviewing applications". Short training videos will be created and made available covering practical tasks such as use of Licence Round Applications (LARRY), Petroleum e-business assignments and relinquishment system (PEARS) and Well Operations Notification Systems (WONS). Pilot videos are expected in early 2021 and will be available on the OGA website and user feedback will be sought.
In the longer term, the OGA has noted that it would be beneficial to bring responsibility for maintenance and improvement of training and development resources under one training academy. The suggestion from the Thematic Review is that this training academy will sit within the OGA while working with key players from industry working in each of the broad areas covered by the Review. It will be interesting to see how this is developed over the coming years.
The overarching message of the report is positive - the majority need to maintain the high standards that they have achieved, and the minority need to catch up. The OGA have undertaken to work collaboratively with the industry to ensure that the recommendations identified in the Report are properly implemented to maximise the successful delivering of the MER UK strategy.
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