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OIL AND GAS INDUSTRY AGREE TO BOOST PIPELINE ACCESS TO PROMOTE NEW NORTH SEA DEVELOPMENT
| Date: | 15 Sep 2004 | | Details: | Over fifty North Sea oil and gas companies have pledged their support for a new infrastructure code of practice which is designed to sweep away one of the prime obstacles believed to be hampering development of new UK oil and gas fields.
The code was launched today in Aberdeen at PILOT, the quarterly meeting between the Government and the UK offshore oil and gas industry.
Mike O'Brien, Energy Minister and chair of PILOT, praised the industry for agreeing the new measures which will greatly help to open up access to North Sea oil and gas infrastructure for third party users. He said:
"The 2003 Treasury, DTI and oil industry consultation group on exploration identified the lack of transparent access to upstream oil and gas infrastructure as an area of real concern to explorers and developers. They agreed key improvements aimed at unlocking future oil and gas volumes from the UK continental shelf.
"I am delighted that the industry, in conjunction with the DTI, has taken this forward to create the new code of practice. It demonstrates again that the Government and Industry co-operation at the heart of PILOT can tackle the most difficult issues and deliver practical solutions. We have already seen the new approach changing behaviours in infrastructure negotiations."
A significant feature of the code is the undertaking that parties will automatically invite the Secretary of State to step into negotiations if a deal between the infrastructure provider and a potential user is not reached within six months. Technical data relating to pipeline operations as well as the key commercial terms and conditions of agreements between infrastructure owners and third parties will be posted on the web, tied into the DEAL portal (www.ukdeal.co.uk).
The code will be maintained and its implementation reviewed by the UK Offshore Operators Association (UKOOA).
Alan Booth, managing director of EnCana UK Ltd, president of the UKOOA Council and member of the 2003 consultation group on exploration, said: "The consultation group saw access to infrastructure as key to unlocking future oil and gas volumes from the UKCS. Many of today's new fields are too small to support their own cost-intensive production facilities and need to use existing systems to make them commercially viable.
"The new code recognises the need for greater transparency in infrastructure access and pipeline business dealings. It outlines principles for good practice and behaviour for both the infrastructure owners and users."
Malcolm Webb, UKOOA chief executive, said: "Strong industry leadership is being shown by UKOOA members who provided the core of the workgroup which worked closely with the DTI in formulating the code and who have unanimously signed up to implementing it."
Paul Blakeley, vice president of Talisman Energy UK Ltd, said: "We see the introduction of this new code as a step in the right direction, which industry as a whole has to embrace fully. We have to dismantle previous 'norms' of commercial behaviour and this product could help effect that change. I am very encouraged by the number of companies who have already indicated that they will comply with the requirements of both the Infrastructure Code and the over-arching Commercial Code of Practice - and this is an excellent start.
Kieron McFadyen, Technical Director of Shell in Europe, said: "We are pleased to have been closely involved in updating this code to suit the changing nature of activity in the North Sea, and we aim to champion its implementation. It should help to ensure consistency in approach and behavior, and it's a good example of how cooperation across our industry and with government can help us regulate ourselves."
The Code updates an existing 1996 Infrastructure Code of Practice. It can be found on the UKOOA website www.oilandgas.org.uk.
Ends | | Contact: | Trisha O'Reilly - UKOOA Communications Team
2nd Floor, 232-242 Vauxhall Bridge Road
London SW1V 1AU
Tel: 020 7802 2422/2400
Fax: 020 7802 2401
Pager: 07659 153 069
Email: toreilly@ukooa.co.uk
Notes to Editors
1.For a printed copy of the Code of Practice on Access to Upstream Oil and Gas Infrastructure on the UK Continental Shelf, contact Trisha O'Reilly at the above address.
2.The Key Principles of the Code of Practice:
Overarching Principles
·Parties uphold infrastructure safety & integrity and protect the environment
·Parties follow the Commercial Code of Practice
Principles of the Infrastructure Code of Practice
·Parties provide meaningful information to each other prior to and during commercial negotiations
·Parties support negotiated access in a timely manner
·Parties undertake to ultimately settle disputes with an automatic referral to the Secretary of State
·Parties resolve conflicts of interest
·Infrastructure owners provide transparent and non-discriminatory access
·Infrastructure owners provide tariffs and terms for unbundled services, where requested and practicable
·Parties seek to agree fair and reasonable tariffs and terms, where risks taken are reflected by rewards
·Parties publish key, agreed commercial provisions.
3.All the technical detail required by the Code will be up and running on the web by the end of the year.
4.PILOT is the successor body to the Oil and Gas Industry Task Force (OGITF) and was established in January 2000 to secure the long-term future of the oil and gas industry in the UK. PILOT is made up of twenty-three key Government representatives and recognised leaders from the industry. It meets quarterly. |
 Back to press releases
For all press enquiries please contact:
Trisha O'Reilly at UKOOA Tel: 0207 802 2422 Email: toreilly@ukooa.co.uk
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