Policy paper: Maximising economic recovery of UK petroleum: the draft MER UK strategy

By HM Government

The Government is committed to supporting the oil and gas industry which plays a vital role towards our energy supplies to employment and our economy more generally. The OGA, which was established as an executive agency on 1 April 2015, is already engaging with industry to drive down costs and improve efficiencies and to maximise economic recovery of our offshore oil and gas reserves, both for Britain’s energy security as well as our long-term economic outlook.

The Petroleum Act 1998, as amended by the Infrastructure Act 2015, places a duty of the Secretary of State to produce one or more strategies for enabling the Principal Objective of “maximising the economic recovery of UK petroleum to be met”. This is the first MER UK Strategy and is required to be produced within 12 months of the relevant clauses coming into force, therefore by April 2016. It was laid in Parliament for scrutiny on January 28 2016.

The OGA will transition to a Government Company in summer 2016, subject to Parliamentary approval for the Energy Bill 2015/16 (the Energy Bill). The Energy Bill, which was introduced into the House of Lords on 9 July, seeks to establish the OGA as a Government Company and equip the body with additional powers to maximise economic recovery of oil and gas from beneath UK waters. These powers, will give the OGA the ability to issue enforcement notices and financial penalties, and to revoke licences for clear or persistent breaches of the MER UK Strategy.

Therefore, the MER UK Strategy should be read as a legal document containing obligations with which those bound by it will be required to comply. Once in force, the Strategy will be binding on the OGA, petroleum licence holders, operators appointed under those licences, the owners of upstream petroleum infrastructure, and those planning and carrying out the commissioning of upstream petroleum infrastructure.

Source:: Policy paper: Maximising economic recovery of UK petroleum: the draft MER UK strategy

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