36
OGA Overview 2016
OGA Overview 2016
Contents
Front cover: Captain Field – Image courtesy of Chevron North Sea Limited.
Introduction from the Chief Executive 3OGA background 4OGA role and expectations of industry 5Current context 6The big opportunity 7The immediate steps 8OGA as a catalyst for success 9Striking the right balance 11Regulatory framework 12MER UK Strategy 13OGA powers: integration of powers 14Fiscal measures 16Fiscally competitive 17OGA way forward 18Focus on priorities 19Strategies 20Revitalise exploration 21Improve asset stewardship 24Improve decommissioning efficiency 26Leverage technology and data 27Create the right conditions 30Develop people, processes and systems 32Who does what in UK Government 35
Buzzard – Nexen
Introduction from the Chief ExecutiveOur oil and gas industry provides a great number of jobs, delivers secure energy for our homes and businesses and generates significant value for our economy every year, at home and through exports.
The sustained decline in global oil and gas prices has brought into sharp focus the significant risks facing the mature UK offshore oil and gas industry, reinforcing the need for operational and behavioural change.
I am encouraged by the progress the industry and the Oil and Gas Authority (OGA) has made with welcome improvements in efficiency. Further details of successes can be found on pages 9 and 10.
Rapid progress has also been made to establish the OGA as an independent authority. On 1 October 2016 we became an independent Government-owned company (GovCo).
The introduction of the MER UK Strategy and the new powers provided to the OGA through the Energy Act 2016 can have a positive effect on the UKCS. Like industry, we are bound by the obligations of the MER UK Strategy and will continue to deliver on our priorities to drive collaboration, regulate, influence and promote the United Kingdom Continental Shelf (UKCS).
We should of course not lose sight of the significant opportunities that still remain. These are shown in pages 7 and 8.
In particular, technology offers a great opportunity. The creation of the new Oil & Gas Technology Centre (OGTC), based in Aberdeen, should now accelerate the take up and deployment of technology and help ensure the UK amasses a wealth of expertise, becoming the go-to centre globally, in mature and late life technology solutions.
Further details can be found in other documents, in particular our Corporate Plan, our Annual Report and Accounts 2015-16 and on our new website.
Dr Andy Samuel Chief Executive
3
OGA background
Urgent need for enhanced stewardship across the UKCS
Review of sector in 2014 (the Wood Review) recommended independent authority
Rising costs, falling production efficiency and reduced exploration activity
Lack of industry-wide collaboration leading to inefficiencies
The need for the OGA
New independent authority created April 2015, became a GovCo on 1 October 2016
Effective stewardship of resources
New powers, better resourced and funded
Catalyst for change and facilitator of action
Encouraging collaboration
Focused on delivering a high-quality service and value-for-money to industry
Providing expertise and evidence to HM Treasury
Creating the OGA
4 OGA is working to drive actions to maximise economic recovery from the UKCS
OGA role and expectations of industry
The OGA regulates the exploration and development of the UK’s offshore and onshore oil and gas resources and the UK’s carbon storage, gas storage and offloading activities
The OGA has an important role to promote investment in the UKCS, value creation in the UK and through exports, and the overall development and prosperity of the industry including wider supply chain
Regulate
PromoteInfluence
MERUK
The OGA has a critical role to influence and encourage a culture of greater collaboration on the UKCS, improve commercial behaviours, and the creation of a more efficient industry
Expectations of industryOGA role
Continue to deliver improvements in asset stewardship
Significantly modify commercial behaviours to align with MER UK
Reinvigorate and intensify efforts to improve efficiency
Protect critical infrastructure
Do everything possible to retain people and skills – support retraining and facilitate redeployment as required
Support Oil and Gas Day and associated MER UK Forum and Boards
5
Current context
6
Infrastructure Production (boepd) Production efficiency
Resources Development Exploration & appraisal
Costs Supply chain Jobs
2014 1.4 million
2015 1.6 million
2016 1.6 million
2014 65%
2015 71%
2015 range 30%-90%
5,000+ wells
3,000+ pipelines250+ subsea systems
250 fixed installations
2014 wells 32
2015 wells 26
2016 wells (est) 16–19
6.3bn boein production or under development
Unit costs down by nearly 30% c.£30bn turnover 330,000 jobs in the UKAverage unit operating costs have fallen from £18 per barrel in 2014 to an estimate of £13 per barrel in 2016
40% through exports and supporting 80% of UK oil and gas jobs
Delivered through or supported by upstream oil and gas activity
Source – Oil & Gas UKSource –Oil & Gas UK and EYSource – OGA
Source – OGA and Oil & Gas UKSource – OGASource – OGA
Source – OGASource – OGA and Oil & Gas UK
CNS
NNS
WOS
SNSRemaining potential
Produced
43bn10bn 20bn
Adapting to new operating conditions
7
The big opportunity
£418bn
£281bn
£348bn
£496bn
Rev
enue
/Tur
nove
r (£b
illio
n, 2
016
pric
es)
Baseline supply chain turnover from exportsVision supply chain turnover from exportsBaseline gross production revenueVision gross production revenue
£148bn Additional turnover£137bn Additional gross revenue
Total value addedIncreased UK supply chainturnover from capturing largershare of exports markets
MER UKIncreased grossrevenues from UKCSoil and gas production
2014
201520162017201820192020202120222023202420252026202720282029203020312032203320342035
0
5
10
15
20
25
30
35
Vision 2035 – A single compelling vision for the offshore oil and gas industry
The immediate steps
8
SimplificationDigital
Collaboration
Efficient decom
Use it or lose it
Consolidation
Extend life
Halve well costs
Exports
Jobs and skills
Technology
Transparency
OGA as a catalyst for success
More than 70 successfulfacilitation/intervention cases by the OGA – across the full lifecycle including new discoveries, extensions of fields, unblocking of commercial issues, cost savings and improved plant operations.
During commercial negotiations on access to infrastructure, the OGA monitor, support, and facilitate where required. Only one case has required the OGA to issue a formal, legally binding notice for terms of access.
The OGA established as a GovCo and senior leadership and governance structures put in place.
The OGA has sanctioned several projects including the Culzean ultra high-temperature high-pressure Field Development Plan, and the Arundel oil Field Development Plan.
The OGA has led work, across a number of Government Departments and other bodies to rationalise and integrate key fora. Seven MER UK boards now report into the MER UK Forum – integrating PILOT and the Oil and Gas Industry Council.
The Prime Minister announced a further package of measures to support the sector in Q1 2016 – including £180 million for technology and £20 million for a further seismic campaign. Funding for the creation of a 3D visualisation centre, post-doctoral appointments and an exploration licence competition was also announced.
9
The OGA has worked flexibly with a number of operators by approving amendments to multiple work programmes and swapping firm well commitments in order to ensure the most prospective targets were drilled.
The OGA’s consents and authorisations team fast tracked a number of applications to allow work to start within reduced timeframes helping to avoid production downtime andhigh standby costs.
7
Highlights
The OGA worked closely with an operator in order to understand the main uncertainties that wouldneed to be overcome in unlocking a new play type.
The OGA has shown flexibility in granting licence extensions – including an example which allowed a field appraisal well to be drilled thus helping to optimise the field development plan.
OGA as a catalyst for success
Successfully deliveredand communicatedthe 14th onshore and 28th offshore Licensing Rounds and opened29th Round.
The OGA brought together all the companies operating in the East Shetland area in order to co-ordinate shutdowns and minimise down-time.
New process introducedto ensure that the most value-adding requests can be prioritised. As an example a deposit consent was fast tracked which prevented possible production delayand project schedule extension, deliveringestimated savings of £32m.
10
£32MThe OGA continue to facilitate industry collaboration, e.g. enabling a new production hub to connect to existing infrastructure, securing operational synergies and significant savings, notably the avoidance of hot-tap costs and offloading tanker operating costs.
LThe OGA has already started to formally set out how the obligations set by the MER UK Strategy might apply to specific investment choices and operational decisions in the UKCS. In three cases this more formal approach to problems within and between partner groups has helped parties reach MER UK solutions to the benefit of all.
Hackathon: The OGA brought operators and the supply chain together to uncover cost efficiencies and innovative technological solutions applicable to the Southern North Sea’s (SNS) well plug and abandonment market, with events in Aberdeen and Norwich.
Highlights
Striking the right balance
Sanctions Rewards
Licence revocation, operator removal
Improvement noticesFines up to £1m
Greater value via cooperationTransparency and better data accessTimely, effective decision making
MER UK benefits all
11Combining new regulatory powers with a more proactive approach
Regulatory framework
12
Legislative Context
Supporting Obligations
Execution
Cost reduction
Guidance
SanctionNotices
Statutory, non-statutory and Stewardship Expectations
Enforcementnotice
Financial penalty notice
Operator removal notice
Licence revocation notice
Central Obligation MER UK Strategy: ‘to take the steps necessary to secure that the maximum value of economically recoverable petroleum is recovered’
Infrastructure Act 2015 Petroleum Act 1998Energy Acts 2011 and 2016
RegulatoryPowers
Facilitation Licensing regime Strategies and delivery programmes
MER UK plans
Regulatory powers
Non-binding dispute resolution
Information and samples Meetings Licence
model clausesThird party
access
Collaboration
Exploration Regional development
Asset stewardship Technology Decommissioning
Sanctions
Principal Objective The principal objective is that of ‘maximising the economic recovery of UK petroleum’
MER UK Strategy
Take the steps necessary to secure that the maximum value of economically recoverable petroleum is recovered from the strata beneath relevant UK waters
MER UK Plans
Set out the OGA’s view of how any obligations in the Strategy may be met
Central ObligationUnderpins the work of the OGA
Legally binding on the OGA and industry
Describes how the ‘principal objective’ should be met in practice
Sets out central obligation, supporting obligations, and required actions and behaviours
Empowers the OGA to produce MER UK Plans
Provides safeguards
Include:
consistency with legislation, including competition law and common law
no investment or activity without a satisfactory expected commercial return
investment and activity not to damage confidence of investors in UK oil and gas
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Required Actions and Behaviours
Timing, collaboration, cost reduction, and actions where a party decides not to pursue MER UK
Supporting Obligations
Exploration, regional development, asset stewardship, technology, and decommissioning
Safeguards
OGA powers: integration of powers
Disputes*
Consideration
Recommendation
Propose
Licensing Regime*
Assessment of Provisions
Impose
Third party access*
Third party access Procedure§
Sanctions*
ImposeImpose
Mediate
Evidence of failure to comply§ ‡
Facilitation of Activity
Triage
Recommendation Recommendation
OGA Board DecisionSenior Leadership Decision
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* Failure to provide relevant information to the OGA is sanctionable.§ Issues that are subsequently found not to be in scope for Thrid party access or Sanctions may be considered for dispute resolution. ‡ Evidence in support of a failure to comply with the Central Obligation may include, depending on the context, such things as a person’s underperformance against the OGA’s published Stewardship Expectations or an OGA Plan.
Recommendation
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Non-binding dispute resolution: Powers to formally consider disputes and make a non-binding recommendation
Licence model clauses: The terms and conditions of an oil and gas licence
Information and samples: Strengthens requirements for the retention, reporting and disclosure of information and samples
Third-party access: Powers to impose binding terms for access to upstream petroleum infrastructure
Meetings: The right to attend meetings between companies operating in the UKCS
Sanctions: Power to impose sanctions where a person has failed to comply with a ‘petroleum-related requirement’
The OGA publishes guidance to support industry that promotes good practice, facilitates action, and clearly outlines requirements This includes Petroleum Operations Notices (PONs) setting out, for licensees, the OGA’s requirements in relation to a variety of matters
The OGA has developed 10 Stewardship Expectations for industry, across the oil and gas lifecycle, which, if followed, are intended to help facilitate delivery of the MER UK Strategy obligations
• Hub strategy• E&A subsurface work programme • Optimum use of subsurface data • Licence activity, decision points and milestones • Robust project delivery• Production optimisation• Information management• Technology plan • Collaboration• Planning for decommissioning
Regulatory powersGuidance and Stewardship Expectations
Fiscal measures
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Supplementary Charge reduced
from 32% to 10%
Petroleum Revenue Tax permanently reduced from 50% to 0%
Introduction of new basin-
wide Investment Allowance
2 x £20 million for new
geophysical surveys
Clarification of tax treatment of
decommissioning costs
Packages of measures worth £1.3 billion and £1 billion introduced in 2015 and 2016. In line with the ‘Driving investment’ principles.
16Tone for future fiscal policy set by HM Treasury in late 2014 in ‘Driving investment: a plan to reform the oil and gas fiscal regime’.
It recognised that to maximise investment the overall tax burden facing the industry should be reduced
Fiscally competitive
“ Strong commitment from Government
Positive fiscal reform
Politically stable
OGA provide expertise and evidence to HM Treasury
Adding certainty
The blue bars in the chart show rates of taxation (using a 0% discount rate) for a 20 million barrel of oil equivalent high cost ($21.6/bbl capex, $12.3/bbl opex) model oil field before and after the Budget changes with light blue bars for rates of tax for the same project in other countries
Projects are evaluated at a long-term Brent oil price assumption of $70/bbl (real, 2016 terms). The red diamonds show project post-tax internal rates of return (IRR)
17UK was already fiscally competitive – made more so by Budget measures
Ambition
Role
Priorities
To be a world-leading authority setting the framework for a sustainable and competitive UK oil and gas industry
Values
Behaviours One team – proactive, efficient, delivery-focused, respected and trusted – a catalyst for change
Accountable Fair Robust Considerate
Purpose To maximise the economic recovery of oil and gas
Regulate PromoteInfluence
• Licence and steward offshore oil and gas E&P• Licence and steward onshore oil and gas E&P• Licence carbon storage and gas offloading
• Investment in the UKCS• Value creation in the UK and through exports• Industry, supply chain and technology development
• Industry operating costs and efficiency• Greater industry collaboration• Industry culture and behaviours
Revitalise exploration
Improve asset stewardship
Drive regional development and
protect critical infrastructure
Improve decommissioning
efficiency
Leverage technology
and dataCreate the
right conditionsDevelop people, processes and
systems
This means
Implementing a licensing regime that encourages high levels of exploration, using data, analysis and insights to proactively influence and help incentivise exploration on the UKCS and improve success rates
Stewarding the development of UK oil and gas resources and working with industry to optimise efficiency while maintaining high standards of safety and environmental management
Seeing the big picture and maximising the sum of the parts, making sure that barriers to regional development are removed and that critical infrastructure and production hubs are protected
Achieving the maximum extension of field life and ensuring that decommissioning is executed in a safe, environmentally sound and cost effective manner and that the UK gains a competitive industrial capability
Ensuring that existing technologies are deployed to their full effect, relevant new technologies are developed and that the collection, analysis and sharing of data is used to maximise economic recovery
Engaging with industry, government and others to create an operating environment and supply chain that supports MER UK, sustaining high levels of skilled employment, economic value and energy security for the UK
Creating a diverse, high-performing team and a great place to work, where employees are supported to develop their capability, in an organisation with simple processes and systems
Why
Wha
tHo
w
OGA way forward
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West of Shetland task forceFocus on priorities
To help focus collective efforts the opportunity matrix details the OGA’s most urgent commercial facilitation priorities. Some are designed to tackle immediate risks whilst others will help to make sure opportunities are realised. Successful delivery of these priorities has the potential to deliver an additional three to four billion barrels of oil equivalent.
The timings shown in the opportunity matrix are based on information supplied by the relevant operators and may be subject to change.
KeyCNS – Central North SeaSNS – Southern North SeaP&A – Plugging and abandonmentFPS – Forties Pipeline SystemTGT – Theddlethorpe Gas TerminalSVT – Sullom Voe TerminalWOS – West of Shetland
OGA Opportunity Matrix
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Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
H1 2018
Impact
Tim
elin
eLow Very highSignificant
Brent by-pass
FPS
Lancaster
CNS Buzzard Phase 2
Quad 9 Heavy Oil
Columbus/Arran
Subsea WellAbandonment
Jackdaw
SVT
TGTOuter Moray Firth SNS P&A
campaign Phase 2
Dunlin Decomm
Edinburgh
Brae Area Decomm
RosebankPenguins
Shetland Hub
Quad 9 Gas Blowdown
WOS GasEvacuation
Ongoing
Opportunity Area
Complete
For representational purposes only. The OGA does not provide endorsements or investment recommendations.
Tackling immediate risks and seizing opportunities
StrategiesThe OGA is publishing a number of strategies to drive the direction of a new way of working across the oil and gas lifecycle. The strategies are accompanied by a delivery programme, providing further direction and detail on the implementation of the strategy.
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Rev
italis
e ex
plor
atio
nRevitalise exploration
43bn boe recovered from UKCS to date – up to 20bn boe remaining – with up to 9bn yet to find in mature areas†
> 300 unsanctioned discoveries with over 3bn boe potential
New, flexible, Innovate Licence introduced
Target of 50 Exploration and Appraisal (E+A) wells per year by 2021
UK Government funded seismic – 2015 and 2016 seismic campaigns completed successfully
40,000 km seismic data released and made freely available* from 2015 surveys
OGA competition to define potential of frontier areas
29th ‘Frontier’ Licensing Round launched July 2016
Three geoscience post-doctorates awarded and Lyell Centre 3D Visualisation Suite funded by UK Govt
29th
The OGA is committed to maximising the economic recovery of hydrocarbons from the UKCS by creating an environment that stimulates exploration activity within the UK, allowing industry to create value through drilling of a balanced portfolio of frontier and mature area prospects, leading to the discovery of new oil and gas reserves.
† www.ogauthority.co.uk/data-centre/data-downloads-and-publications/reserves-and-resources/* From www.UKOilandGasData.com
21Key OGA priority – to implement a licensing regime that encourages high levels of exploration,
using analysis and insights to proactively influence and help incentivise exploration on the UKCS
Significant opportunitiesR
evita
lise
expl
orat
ion
22
We will evaluate the potential for further seismic acquisition programmes including technology demonstrator projects
The OGA will launch, manage and deliver the 30th Offshore ‘Mature’ Licensing Round during 2017, and deliver subsequent licensing activity
Work with industry and academia to promote regional studies and improve geological understanding of UKCS frontier and mature areas
Provide high-quality geological maps such as play fairway maps integrating with neighbouring countries
Delivery of significantly improved regional prospectivity and yet-to-find analyses in order to promote opportunities
29th Licensing Round Areas
2015/16 legacy and reprocessed legacy lines
2015/16 2D broadband acquisition
30th Licensing Round Areas
UKCS Designated Area
2D line locations are subject to data availability and quality. The final datasets may vary from this illustration 30th Licensing Round areas are proposed and subject to further consultation and approvals.
Onshore exploration and developmentOnshore licensing
Drilling consents
Work with British Geological Survey (BGS) to publish assessments of shale potential
Collect and publish shale-related geotechnical data
Approval of Hydraulic Fracture Plans
Regulation of induced seismicity
Shale Policy – Government (BEIS)
Planning permission – Mineral Planning Authority
Environmental permits – Environment Agency (England), Natural Resources Wales (Wales), Scottish Environment Protection Agency (Scotland)
Scrutiny of well design – Health & Safety Executive
The Scotland Act 2015 devolves onshore regulatory functions, with similar provisions in the Wales Bill. Commencement of the respective oil and gas provisions will devolve responsibility for onshore licensing to the Scottish and Welsh administrations
Issue of Hydraulic Fracturing Consents – Government (BEIS)
OGA performs a number of onshore regulatory functions and will continue to work with industry and other regulators to ensure regulatory controls and guidance are in place.
Oth
ers
OG
A
Rev
italis
e ex
plor
atio
n
23
Asset StewardshipAsset stewardship is crucial to maximising economic recovery from the UKCS and to deliver greater value overall. Effective stewardship means:
Impr
ove
asse
t ste
war
dshi
p
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Stewardship ExpectationsBenchmarking
Stewardship reviews
Expectations for industry, across the lifecycle, and underpins the MER UK Strategy and supporting obligations
Benchmarking assets for: • production efficiency • recovery factor • operating cost • decommissioning cost
Results communicated confidentially in a non-attributable way to help continuous improvement
Proactive, structured and prioritised tiered stewardship reviews, based on intelligence gathered
Priority given to the greatest MER UK impact
Rationalised industry surveyNew single, annual, UKCS Stewardship Survey which replaces nine previous surveys. Reduces complexity, time, effort and burden on operators and the OGA
Stewardship Expectations
Tieredstewardship
reviews
Benchmarking
Rationalised industry surveys
Asset owners consistently do the right things to identify and then exploit opportunities
Assets are in the hands of those with the collective will, behaviours and capabilities to achieve this
Asset Stewardship Strategy defines good asset stewardship and how continuous improvement will be achieved and measured
Impr
ove
asse
t ste
war
dshi
pStewardship Expectations1. Hub Strategy
• Documented Hub Strategy, agreed by JV Partners, updated at least every two years, submitted to the OGA on request• A Hub Strategy will demonstrate how the hub will deliver MER UK over its life time
2. Exploration and Appraisal Subsurface Work Programme
• Submit to the OGA annually during the initial/second licence term: (1) An evaluation of resources on each licence, and (2) An associated E&A work programme• Engage fully with the OGA in pre-, syn- and post-well evaluations for E&A wells
3. Optimum use of Subsurface Data
• Annually, through the E&P lifecycle, the JV should consider all relevant available subsurface datasets and their ability to cost effectively reduce uncertainty or increase recovery
• Drive business decisions throughout the E&P lifecycle that are data supported and robust
4. Licence Activity, Decision Points and Milestones
• Deliver to the OGA a signed JOA by the end of the first six months of the initial licence term• Notify the OGA at least one month prior to an investment decision to drill or drop• Notify the OGA at least one month prior to commencing any farm out/divestment activity
5. Robust Project Delivery• Create alignment with the OGA on cost/schedule, front end loading and formal review cycle at FDP approval• Dedicated organisation and established project management system to be in place• Demonstrate consideration to optimising new and existing infrastructure to achieve MER UK
6. Production Optimisation• Demonstrate a systematic approach to production optimisation incl process, systems and people• Production optimisation should include production protection and production growth
7. Information Management• Comply with current obligations in PON9 detailing requirement to retain and report information/samples• Take necessary steps to prepare for information and samples powers in the Energy Act 2016
8. Technology Plan • Submit to the OGA annually a Technology Plan showing new and emerging technology deployed to optimum effect across the full lifecycle
9. Collaboration• Complete a documented assessment of collaborative behaviour, agreed by JV Partners, every two years• Licensees to act in accordance with the various codes they have signed up to (Industry Behaviours Charter, CCoP and ICoP)
10. Planning for Decommissioning
• Six years prior to CoP have a decommissioning preparation plan in place, available to the OGA on request• Prior to implementation, have decommissioning execution and contracting strategies in place, available to OGA on request
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Who does whatEssential that industry explores all viable options for infrastructure use prior to decommissioning. Where decommissioning takes place it must be executed in the most cost effective way without prejudice to, and in balance with, the maximisation of value from economically recoverable reserves.
- Cessation of production- Regional approach- MER UK compliant
- Cost efficiency- Delivery capability
- Funding and security- Decom Programme approval- Regulatory compliance- Environmental risk and mitigation
BEIS Team
Area Teams
Decom Team
OG
ABE
IS
Three clear priorities identified:
Cost certainty and reduction is achieved in a predictable, technically competent, safe and environmentally responsible manner
Decommissioning delivery capability in terms of organisational capacity, supported by appropriate business models, contracting arrangements and industry alignment
Decommissioning scope, guidance, and stakeholder engagement We work with relevant parties to identify and evaluate opportunities to optimise decommissioning scope and to improve engagement with those who regulate the process
Impr
ove
deco
mm
issi
onin
g effi
cien
cy
26
Delivering on these priorities will require not only increased collaboration and efficiency, but also the design and implementation of more transformative solutions across commercial, operational, technical and environmental aspects to address constraints, liabilities and risks.
Decommissioning
Decommissioning presents significant opportunities for innovation, cost reduction and development of UK skills and capability, and has the potential to deliver a competitive market advantage to the UK on the global decommissioning stage
Technology strategy and communication
TLB2 as an effective ‘programme board’
OGA Technology Strategy1 Delivery Programme
Leverage technology
Leve
rage
tech
nolo
gy a
nd d
ata
27
Well cost reduction
Small pools
Asset integrity
Digital technology
Decommissioning
Operators’ Technology Plans
Proactive support by the OGA
Benchmarking and reporting
1 www.ogauthority.co.uk/technology/strategy/2 www.ogauthority.co.uk/about-us/mer-uk-forum-boards/technology-leadership-board/
Drilling while casing (Schlumberger)
Versatile production unit (Amplus Energy)
Set priorities
Work with the TLB and the industry to define the shared priorities in technology
Support innovation
Work with the OGTC and other organisations to foster investment in existing and novel technologies
Oversee industry efforts
Regulate industry to promote innovation
Monitor progress in technology development and field deployment
Key prioritiesLe
vera
ge te
chno
logy
and
dat
a
28
300+ unsanctioned discoveries
3+ bn boe technically recoverable
Near-infrastructure ‘clusters’
‘New hubs’ and ‘stand-alone’ concepts
Clusters screening complete
Operators’ engagement commenced
10+ technology (areas) under review
OGA: identify/promote field opportunities
Oil & Gas UK: efficiency through standardisation
OGTC: new concepts and technologies
NSRI, industry partners
Well cost reduction Small pools
35% cost reduction via efficient design and execution with existing technology
Emerging technologies to yield further savings
Drilling contractors engaged on equipment cost efficiencies
Oil & Gas UK: Design and execution efficiencies, sharing best practices
OGTC: Improve existing technologies and develop novel solutions
OGA: Influence operators’ drilling plans to deploy technology and sustain activity
IADC, ITF, industry partners
Spooled pipeline (Airborne Oil & Gas)
Conductor Anchor Node (NeoDrill)
Extended Reach Drilling (Merlin ERD)
The ambition of the Information Management Strategy is to create an environment, over the next five years, in which information and data accelerate the effort to achieve MER UK
The Strategy identifies six key themes for the delivery of effective information management:
- Analysis, insight and understanding
- Data regulation
- Data quality management
- Data management authority and collaborative working
- Unified data store and access
- Enhanced operational data management
OGA approach Information Management Strategy
Information management
Small Pool DevelopmentTo provide access to comprehensive, good quality data
The Energy Act 2016 and supporting regulations gives the OGA new powers over the management of information and samples from licensees and other relevant parties – a national data repository will support this function
New regulations and guidelines to set out the requirements for retention, reporting and publication of information and samples
OGA Information Management Forum creates an industry-focused, collaborative environment
Leve
rage
tech
nolo
gy a
nd d
ata
29Higher quality information and data, across the full lifecycle, will help to
deliver more effective and efficient ways to maximise economic recovery
World-class supply chain with essential role to play in helping achieve MER UK
Potential for up to £239bn of additional turnover over next 20 years
Supply Chain Strategy sets out vision to grow the UK service sector’s share of both the domestic and global market
Income from exporting goods and services accounts for almost half overall value of UK service sector
Analysis shows there is an opportunity to double the UK service sector’s share of the global market over next 20 years
Real opportunity to establish the UK as the ‘go to’ centre globally for offshore mature basin, subsea and decommissioning solutions
Skills retention and development vital
Need to ensure, wherever possible, that skilled personnel are retained
OGA participates in the Scottish and New Anglia Jobs Task Forces
Creating the right conditionsSupply chain Exports Skills
30
Cre
ate
the
right
con
ditio
ns
OGA continuing to encourage, influence and promote the industry to achieve MER UK and generate additional value for the supply chain
Operating environment
Applying best practice
Must compete in lower oil price world – create a competitive cost base
Encouraging collaboration and integrating plans
Structural transformation required
Operational and cultural change essential – need to improve commercial behaviours
Need to ensure performance is improved through effective transfer of lessons learnt
Learning from other sectors
Engaging with other regulators
The OGA has undertaken a review of performance on all 57 major development projects since 2010 and lessons learned events have been held on 11 of them
MER UK awards recognise positive behaviours
Business process improvement: Continuous improvement to reduce waste and improve efficiency (1) Inventory Trading Platform 21 companies, 200,000 items (2) Tendering Principles launch, Share Fair, Nov 2016
Standardisation: Techniques developed in subsea technology being applied to real case studies realising savings
Culture and behaviours: Further development and promotion of Industry Behaviours Charter, Rapid Efficiency Exchange, workforce engagement including ETF Toolkit launch at Share Fair
Oil & Gas UK Efficiency Task Force
Cre
ate
the
right
con
ditio
ns
31
Creating the right conditions
Essential that UKCS is recognised as a collaborative place to do business
Continued participation at the MER UK Forum by Government Ministers
Oil & Gas MER UK Forum and BoardsForum / Boards’
Purpose
Membership
Core work areas
and MER UK Boards
Boards’ Objectives
Drive tripartite action and deliver tangible benefits in support of MER UK and maximise UK value from the oil and gas industry as a whole
• Forum – OGA, government, industry and trade unions• MER UK Boards – industry led with support from OGA and Oil & Gas UK
1. Develop a clear strategy, priorities and plans2. Create leadership alignment and leverage tripartite action – forum for consultation3. Deliver tangible and quantifiable results
Frequency • MER UK Forum meets twice a year• MER UK Boards meet a minimum of quarterly
Exploration AssetStewardship
Regional Development and Infrastructure
Efficiency Task Force
Technology Leadership Board Decommissioning Supply Chain,
Exports and Skills
Secretariat OGA external affairs team
Forum Objectives
1. Promote dialogue between industry, government and OGA2. Provide strategic direction and oversight and support3. Drive alignment, accountability, action and delivery on key prioritiesD
evel
op p
eopl
e, p
roce
sses
and
sys
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32
Experienced leadership
Director ofOperations
Gunther Newcombe
Director of Regulation
Simon Toole
Director of Strategy
Hedvig Ljungerud
Director of HR and Supply Chain
Stuart Payne
Director ofCorporate
Nicola Granger
AndySamuel
ChiefExecutive
Dev
elop
peo
ple,
pro
cess
es a
nd s
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33
Robust governance
Chief Executive
Andy Samuel
Shareholder Representative
Director
Stephen Speed
Non-Executive Director
Robert Armour
Non-Executive Director
Frances Morris-Jones
Company Secretary and General Counsel
Dr Russell Richardson
Chief Financial Officer
Nicola Granger
Sir Patrick Brown
Chairman
Accountable to BEIS Secretary of State
Non-Executive Director
Mary Hardy
Dev
elop
peo
ple,
pro
cess
es a
nd s
yste
ms
34 Broad experience
Who does what in UK Government
Exploration and production including: Oil and gas policy including:
Onshore, offshore and carbon storage licensing OGA
Field development plan consents OGA
Cessation of production approvals OGA
Offshore pipeline works authorisation OGA
Infrastructure OGA
Commercial matters and changes of control OGA
Flaring and venting consents OGA
Metering and allocation OGA
Production outages OGA
Offshore decom efficiency, costs, technology OGA
Offshore decom programme approval, execution and monitoring BEIS - OGED
Offshore environmental management and inspection BEIS - OGED
Health and safety management HSE
Overall oil and gas policy BEIS
Legislation including the Energy Act BEIS
Oil and gas parliamentary processes BEIS - OGA shareholder team
Offshore decommissioning BEIS - OGED, OGA, HMT
Fiscal and taxation
HMT The OGA provide
expertise and evidence to HM Treasury
Supply chain and business impact BEIS & OGA
Environment BEIS - OGED
International relations and trade BEIS, DIT OGA, FCO
Key
BEIS: Department for Business, Energy and Industrial Strategy DIT: Department for International tradeFCO: Foreign and Commonwealth OfficeHMT: Her Majesty’s TreasuryOGA: Oil and Gas AuthorityOGED: Offshore Environment & Decommissioning Unit
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