UK Government to give new oil regulator power to fine companies
20 March 2015
The UK is to give its new oil and gas regulatory body the power to fine companies that breach oil and gas licenses up to 1 million pounds, the UK Treasury said on March 20. The Oil and Gas Authority (OGA) is assigned to ensure offshore oil and gas producers do their best to retrieve as much as possible of Britain's remaining 24 billion barrels of reserves.
The Treasury said in a statement that the OGA, which will become an executive body on April 1, would primarily deal with violations of safety and environment regulations.
The OGA should also help resolve disputes with the potential to disrupt oil and gas production in Britain's North Sea, the statement said. Its recommendations will be open for consultation.
The creation of the OGA stemmed from a recommendation by oil industry veteran Ian Wood in a government-commissioned report on the North Sea last year that warned better industry cooperation was needed to retrieve Britain's remaining oil and gas.
UK oil production has fallen to the lowest since output started in the mid-1970s as old fields are running out of resources and traditional investors, such as BP or Shell, find the basin too expensive for large projects.
Earlier in the week the government made sweeping changes to its oil fiscal regime that will reduce some of the taxes oil companies pay for operating in the North Sea.