| Details: | A cross-border study published jointly by the oil and gas industry and governments in the UK and Norway is calling for closer co-operation between the two countries on the development of remaining oil and gas resources across the North Sea.
The report, "Unlocking Value through Closer Relationships", was officially launched today (28 August) by Brian Wilson, UK Minister for Energy and Construction, and Einar Steensnaes, Norwegian Minister for Petroleum and Energy, at the Offshore Northern Seas (ONS) 15th International Conference in Stavanger, Norway.
It outlines 14 recommendations for improving co-operation between Norway and the UK on all aspects of the oil and gas industry, which could ultimately be worth as much as $2 billion through savings on capital, operating and decommissioning costs and speeding up new development.
Many of the recommendations will facilitate export of gas for Norwegian producers and help the British Government in its aims to secure the UK a diverse energy supply. A key recommendation is the drawing up of a new "Framework Treaty" between the two countries to help unlock new opportunities for cross-border working, together with the creation of guidelines that will underpin both the new and existing treaties.
The study also recommends focused discussions between oil and gas producers, the Department of Trade and Industry, OFGEM and Transco on the investment required to ensure sufficient capacity in the UK National Transmission System (NTS), particularly at St Fergus, to meet future demand for gas. Other recommendations seek closer co-operation in areas such as the harmonisation of gas sales specifications and a common Code of Practice for access to cross-border infrastructure.
Scott Urban, BP group vice president, said: "Through the workgroup we set out to enhance competition and promote the efficient operation of the market between the UK and Norway. The benefits will be to bring on new reserves, extend the life of existing development and ensure optimal use of infrastructure for the long term. But we are only at the beginning of the journey bringing our two countries ever closer together."
The report was prepared by the UK-Norway North Sea co-operation workgroup, formed in January with representatives from oil and gas companies, contractors and government departments from both sides of the North Sea median line.
It was set up to find ways to improve understanding, at government, industry and contractor level, of how cross-border co-operation could help maximise recovery of UK and Norwegian reserves, and to develop recommendations for addressing any barriers hindering progress.
Tom Botts, managing director of Shell UK Exploration and Production, said: "Great progress has been made in giving substance to the issue and in moving cross-border co-operation forward. The effort and commitment of both Governments show how seriously this opportunity is viewed and that it must be grasped fully by the Industry."
Sir Ian Wood of the Wood Group and co-chair of the UK Industry Leadership Team within PILOT said: "The key interest for the supply chains in both Norway and the UK is the potential to unlock and accelerate new developments across the median line which should provide additional work opportunities."
The workgroup focussed on four key areas: transportation and infrastructure; operational synergies, such as safety practices and cross-border processing of oil and gas, mutual open market access for contractors; and the exchange of information based on the work of government/industry partnerships in both countries - PILOT in the UK and KON-KRAFT in Norway.
Kjell-Arne Oppeboen representing KON-KRAFT said: "KON-KRAFT is at present working on several projects designed to improve value creation in the oil and gas business. This report is a natural development in the North Sea and the results from this particular project is a major achievement demonstrating the effect of broad co-operation."
Lewis Macdonald MSP and PILOT vice chair said: "Time and again PILOT has proven that the partnership approach is the only way to implement pragmatic objectives which can help to sustain the industry in the UKCS. We have broken new ground in our partnership with KON-KRAFT as today's recommendations prove. We must act now to ensure that the UKCS continues to be an attractive prospect for development, and one of the ways we can do this is by maximising existing assets through cross-border co-operation."
An implementation team will be formed in September to carry forward recommendations from the report. Regular updates will be posted on the websites for PILOT (www.pilottaskforce.co.uk) and the Norwegian Ministry for Petroleum and Energy (www.dep.no/oed). |
Back to press releases
