Maximising Economic Recovery: A New Approach to Regulating the UK's Offshore Oil and Gas Industry

The North Sea Transition Authority (NSTA) administers the regulatory regime known as 'maximising economic recovery or MER,' which was introduced in 2015 to address the problems of an aging basin. It requires regulated persons to seek to maximize economic recovery across the basin, resulting in unprecedented levels of collaboration and a more hands-on regulator. The book discusses the legislative changes, the nature of the NSTA, and the regulatory tools available, including the OGA Strategy and sanctions. It also focuses on the NSTA's increasing focus on the energy transition.

Format: Hardback
Length: 296 pages
Publication date: 16 June 2023
Publisher: Globe Law and Business

The regulatory framework known as "maximizing economic recovery" (MER), which is currently administered by the North Sea Transition Authority (NSTA), was established in 2015. It was developed as a result of a government-commissioned report by Sir Ian Wood, which was published in 2014. The report recommended the introduction of a new tripartite strategy for MER from the UK Continental Shelf (UKCS) involving the HM Treasury, industry, and a new regulator that would be independent of government. The primary objective of this strategy was to address the challenges posed by an aging basin, where smaller discoveries resulted in new fields being more marginal and interdependent than in the past. As a result, there was increased competition for aging infrastructure and a need for greater collaboration among operators to ensure the economic viability of these fields. Additionally, the growing competition for investment from outside the UK led to significant declines in production, production efficiency, and exploration.

The new approach under MER requires regulated entities active in UKCS operations to prioritize maximizing economic recovery not only from their own assets but also across the entire basin. This necessitates unprecedented levels of collaboration among these entities. Furthermore, the NSTA has taken a more hands-on approach to regulation, seeking to use both influence and enforcement to radically alter the culture of the UKCS.

This book is not a comprehensive guide to oil and gas industry regulation in the UK. Instead, it focuses specifically on the MER UK regime. It provides an overview of the legislative changes that introduced the regime, the nature of the NSTA, and how it employs "soft power" to achieve its objectives. The book also describes the regulatory tools available to the NSTA, including the Oil and Gas Authority Strategy and the mechanisms for enforcing these regulations through sanctions.

In conclusion, the MER UK regime represents a significant shift in the regulatory approach to the oil and gas industry in the UK. It aims to maximize economic recovery from the UKCS while promoting collaboration and a more sustainable approach to exploration and production. The NSTA has played a crucial role.

Dimension: 240 x 160 (mm)
ISBN-13: 9781787429703