OGA: UK finally has an oversight body with teeth

A long time ago in a galaxy far, far away…the UK had offshore oversight authorities that could only remind you of Jaja Binks of Star Wars fame – fairly toothless and incapable of making any sensible judgments. A good deal of blubbering went on.

Operators were allowed to abandon fields on the slightest pretext of poor economics, to shutdown wells without having had any clear intention of carrying out intervention that might bring them back into economic operation and would put field developments in motion with seemingly little oversight.

Those days appear to be over. For the 30 plus years I edited Subsea Engineering News, I was always highly critical of the authorities and that was from the bottom of the Department of Energy and later DECC (cc=climate change, ha!) all the way to the energy ministers. Of the latter, many were a joke – I know that one is not supposed to speak ill of the dead, but Peter Morrison was in a class of his own – with little interest in the job and very few (eg Brian Wilson) took the job seriously.

So for me to stand up and say that the Oil & Gas Authority seems to have created a new atmosphere of forthright government involvement in the day to day operations of the offshore oil and gas business is nothing short of miraculous and says a good deal for what the OGA has done in terms of fulfilling the vision of its ‘maximising economic recovery’ (MER) strategy. This week the authority has issued updated guidelines for its Stewardship Expectations and much of it is so sensible and considered that it is hard to believe that has come out of a government agency.

I am not going to do a full roundup of the the strategy – you can read it on the OGA website if you are an insomniac – but I would like to focus on a few salient points.

First of all, there is something called ‘a joint venture hub strategy’ . Imagine that – operators are now meant to consider how a development fits into the wider infrastructure plans in an area. Awesome.

Then there is the area of well activity performance. OGA notes that there are over 800 inactive wells in the sector (30% of the total) with a ‘low average intervention and surveillance rate (14%)’. I think I mentioned this. It tells operators that they need ‘proactive measures to support on time and on budget delivery of well activities’. Did any of the OGA predecessors even consider telling operators that they needed to be more efficient?

Moving on, there is a section on ‘robust project delivery’ on which OGA comments that it has ‘observed delays and continual slippage in the delivery of (field development plans)’ and added that it expected that new finds had to reach a financial investment decision ‘in a timely manner’. Can’t recall operators being chivied before.

On technology deployment, OGA said it was ‘inconsistent, leaving untapped value’ across the sector. What a surprise! There must have been dozens of fields that might have had considerable more production with some well intervention plus the use of seabed pumps et al.

And finally, on decommissioning, OGA says that not only does it expect operator to have a decom strategy in place, all operators have to have a decom plan in place six years before cessation of production and execution and contracting scheme in place three years before CoP.

The only problem with OGA’s stewardship aims is that many of the rules will apply to some of the newbie operators who have neither the engineering backup nor the financial wherewithal to execute them properly. Therein lies the rub of having new blood coming into an old sector.

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Somewhat along the same theme was the announcement that there are plans afoot to redevelop the ancient Buchan field in UK waters by an Equinor-led group. Buchan was one of the first UK floater plus subsea fields, developed by BP, and was later re-developed by Talisman. So does this become a re-re-devo? Anyway yet another example of a field being allowed to be abandoned with valuable reserves still in place.

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A few passing items: whoever heard of a 20-year contract? I am sure that there have been decade long deals for drilling rigs or catering or maintenance, but a two decade deal for subsea hardware? Schlumberger apparently announced that OneSubsea has picked up such an agreement with Chevron in the Gulf of Mexico. What seems pretty likely that no one involved in this deal will still be with either company when it comes to the end of its life. I may not even be alive!

Lastly, who is 3DXLP? Great name, I think, whatever the letters stand for. Probably some alien bacteria. Actually this is a company with a new floating production concept. I am sure it is somewhat noteworthy, but there have so many such ideas that have ‘floated’ around during my three decades as a watcher, that it is often difficult to distinguish the wheat from the chaff. Check out the website. You decide.