The fledgling Oil and Gas Authority (OGA) has today been given new powers to fine companies and revoke exploration licences.
Both Chief Secretary to the Treasury, Danny Alexander and Energy Secretary Ed Davey were in Aberdeen today to announce the new regulatory role for the OGA, alongside more details of the package of financial support outlined in Wednesday’s budget.
The OGA, which officially starts its role in April, will be given a range of powers to help maximise the economic recovery of the UK’s oil and gas industry.
It will be able to issue fines of up to £1m, to revoke licences where necessary, as well as having the right to attend meetings and have access to data to enable it to spot and resolve disputes that might disrupt oil production.
License breaches would have mainly to do with violations of safety and environment regulations.
Ed Davey said: “We’ve moved quickly to get the OGA up and running to help the industry with the challenges it is facing but it’s also vital that we give it the powers it needs to be an effective regulator. It was important for us to work with industry to get that right – and I think what we have developed together will enable the OGA to be very effective.”
His cabinet colleague Danny Alexander added: “The UK’s oil and gas industry is a hugely important employer and investor in Scotland and across the UK, which is why we announced a package to encourage £4 billion of additional investment at Budget and why today we’re announcing that the new Oil and Gas Authority will have the powers it needs to maximise the ongoing strength of the industry.”
The OGA was created last year, after a report by oil industry veteran Ian Wood said better industry co-operation was needed, if the UK was to extract the remaining reserves in the North Sea.