1.1 This chapter describes some of the ways the Department of Trade and Industry (DTI) discharges its regulatory and sponsorship responsibilities for the oil and gas industry. It also contains information on some of the main highlights and events in the past year.
1.2 Information on the DTI’s Oil and Gas (OG) Directorate and the Infrastructure and Energy Projects (IEP) Directorate is contained at sections 1.25-1.26 and 1.27.1.32 respectively below.
Petroleum Licensing
1.3 The Petroleum Act 1998 came into effect on 15 February 1999. The Act consolidates the Petroleum (Production) Act 1934, the Petroleum and Submarine Pipelines Act 1975 and certain provisions from the Continental Shelf Act 1964, and other enactments relating to oil and gas exploration. The consolidation maintained the legislative status quo, but provides a single legislative focus for a range of legal issues related to the full gamut of upstream operations from exploration to development, pipeline authorisations and decommissioning.
1.4 The Current Model Clauses Order was published and came into effect on the same day. This reproduces the consolidated model clauses applicable to current seaward and landward petroleum licences. Further information about the UK Petroleum licensing framework can be found in Chapter 3.
Data Release
1.5 Under the terms of the Licences all data is held confidential for a period of 5 years from the time the Secretary of State for Trade and Industry receives it. Historically only well data has been released under a discretionary rolling programme, this has resulted in a series of non-exclusive contracts. Some specific offshore seismic data sets are also available through non-exclusive contracts. UKOOA (UK Offshore Operators Association) has produced a set of Guidelines to facilitate the routine release of offshore seismic data. The UK Onshore Geophysical Library manages the release of onshore seismic data.
1.6 This subject is covered in greater detail on the DTI Oil and Gas web site (see 1.33 section below). Various Well Data sets and Analysis, and Seismic Data sets, are available from the companies listed in Table 1.1 below.
1.7 Any company that would like to suggest further datasets or analyses to release on a non-exclusive value added basis should contact the DTI on tel: 0171 215 5133.
Table 1.1 Various Well Data sets and Analysis are available from:
|
Various Seismic Data sets are
available from:
|
More useful addresses can be found in Appendix 17.
CDA (Common Data Access)
1.8 CDA has been established to provide a radical solution to hydrocarbon data management in the UK oil industry. A company, CDA Ltd, has been formed, owned by 27 oil companies, to manage the initiative. The DTI fully supports CDA’s objective of offering a quality-controlled data service to the industry. The first phase of the project related to digital well log data. Further phases of the project cover hard copy well data and seismic.
The Environmental Imperative
1.9 Protection of the environment is a key priority in the exploration, development and production of the United Kingdom’s oil and gas resources. Applicants for Production Licences are expected to submit copies of their Company Environmental Policy, Environmental Management Systems and an assessment of the environmental areas to be explored in their applications. They are also expected to demonstrate that environmental considerations have been taken into account in their work programmes for the development. Once development has started regular inspections, including unannounced monitoring overflights, are conducted to ensure strict compliance with the agreed environmental constraints. More information on Environmental Protection can be found in Chapter 4.
EU Environmental Impact Assessment (EIA) Directive
1.10 Regulations to implement the EU environmental impact assessment Directive (85/337/EEC) as it applies to offshore oil and gas activities on the UK Continental Shelf came into effect in April 1998. More recently, in March 1999, the DTI introduced further Regulations which implement the amending 1997 Directive 97/11/EU. These regulations add a further legislative strand to the UK’s objective of ensuring that oil and gas exploration and development take place with minimal impact upon the marine environment, while providing for greater public access to information and decisions. Information on these decisions, as well as on the guidance documantation, can be found on the DTI’s website at: http://www.dti.gov.uk
More information on Environmental Protection can be found in Chapter 4.
1.11 The Petroleum and Submarines Pipelines Act 1975 (as amended) prohibits the construction and use of pipeline on the UKCS without the written consent of the Secretary of State for the DTI. It describes the procedure to be followed by the Operator and the Secretary of State before an authorisation can be granted. In addition to these legislative controls over pipelines, the industry has adopted a voluntary Offshore Infrastructure Code of Practice.
DTI Core Store
1.12 The DTI Core Store, located in Edinburgh is the national archive for core and cutting samples taken from wells drilled on the UKCS. The Store contains some 280 km of rock cores and and nearly 29 thousand trays of cutting samples from offshore wells. In addition it also holds an extensive collection of well information in hard copy format and records on microfiche.
1.13 Under the terms of the model clauses a licensee is obliged to keep samples and is required under the Petroleum Operation Notices (PONs), to provide a portion of all core and cutting samples to the DTI. These are received, curated and administered at the Core Store by Hays Information Management under a contract.
1.14 The Store offers laboratory facilities to anyone wishing to view and examine the samples in a spacious well equipped environment. These laboratories facilities have been used by oil companies, contractors and academics to run core workshops as a training forum for numerous geoscientists in the industry.
For further information telephone 0131 664 7330.
Hydrocarbon Additional Recovery Programme (HARP)
1.15 The DTI’s expenditure in 1998/99 on the Hydrocarbons Additional Recovery Programme (HARP) was £2.8 million. This programme aims to provide the DTI with the technical support which it requires to fulfil its regulatory function of ensuring maximum recovery of economic oil and gas from UK fields, with due regard to the environment, and to foster and sponsor innovative recovery techniques.
1.16 Dissemination events including a number of workshops and publishing of generic studies undertaken by AEA Technology and the Universities, were carried out during 1998/99. Further studies and research on improved oil recovery topics were carried out through Joint Industry Projects. The new Joint Industry Projects this year, concerned density and improved parachor estimation for interfacial tension prediction, determination of dynamic relative permeabilities and capillary pressure, and improved calibration of the Todd and Longstaff method.
1.17 The DTI expenditure in 1998/99 on the Offshore Geology programme was £1.25 million. The programme covers the provision of independent analyses of hydrocarbon prospectivity on the UKCS, the receipt and curation of cores and cuttings from hydrocarbon wells, and the management of the DTI Core Store.
1.18 The advice on hydrocarbon prospectivity on the UKCS is carried out by a small team of geoscientists from the British Geological Survey (BGS) dedicated exclusively to the DTI. Their work forms the basis of the estimates of the Undiscovered Reserve Potential published in Chapter 6 of this report.
MAIN EVENTS MAY 1998 - MARCH 1999
The 18th Round of Seaward Licensing
1.19 The 18th Round invited applications for petroleum licences for 602 blocks in the Southern, Central and Northern North Sea as well as Liverpool and Morecambe Bays. The blocks were in mature areas close to existing fields or infrastructure. Licence awards were made for 79 of the 82 blocks applied for. The rationale for the Round was the desire to revisit acreage in the North Sea, some of which has not been offered for licence for several years. In addition, the Round was expected provide opportunities for companies to explore close to existing developments and thus allow incremental discoveries to be brought on stream.
Frigg Treaty and UK/Norwegian Framework Agreement
1.20 A revised Frigg Treaty and a new Framework Agreement on pipeline developments were signed in August 1998.
1.21 The original Frigg Treaty was signed in 1976. It governed the construction and use of two pipelines from the transboundary Frigg field to a terminal at St Fergus in Scotland. The new Treaty revises the original text to enable the pipelines to be used in future for gas from other fields as the Frigg reserves become depleted. It also gives the UK jurisdiction over the parts of the Norwegian Frigg pipeline within the UK’s territorial sea, internal waters and land territory, and contains agreed administrative procedures for third party use of the pipelines and their eventual decommissioning. The original Treaty allowed Norway jurisdiction right up to St Fergus.
1.22 The Framework Agreement on interconnecting pipelines will simplify the process of agreeing arrangements governing the construction and operation of new pipelines connecting infrastructure on either side of the UK/Norway boundary. These would previously have required separate treaties. This new agreement should encourage the development of new links to make more efficient use of existing infrastructure and improve the viability of marginal developments.
UK/Belgium Interconnector
1.23 The Interconnector, which links Bacton in Norfolk to Zeebrugge in Belgium, became operational in October. It was formally opened by HRH the Duke of Edinburgh and was one of the largest engineering projects in Europe, completed on schedule and well within budget. The Interconnector links the UK gas transmission system with continental gas grids and will therefore play a tangible role in the creation of a single European market for gas. The pipeline is owned by Interconnector (UK) Ltd, a UK based company, in which several international energy companies have shareholdings. The Interconnector has the capacity to transport 20 billion cubic metres of gas every year from the UK and can also be used to bring gas to the UK from the continent.
1.24 The Gas Liberalisation Directive (98/30/EC) came into force in August. Member States are required to implement it by August 2000. The Directive introduces competition into natural gas markets by requiring Member States to allow a minimum number of larger customers to purchase gas from a variety of suppliers and to receive supplies through existing transmission and distribution systems. The Directive sets out a number of rules on the organisation of the gas sector which include provisions on transmission, storage, distribution and supply. It makes provision for third party access to transmission and distribution systems, giving a phased market opening over 10 years; and it provides for third party access to upstream pipelines. Member States have the right to seek derogations from some parts of the Directive in certain circumstances (eg where the introduction of competition would cause substantial problems for a geographically limited area). The DTI is considering how best to implement the Directive in the UK.
1.25 The OG Directorate of the Department of Trade and Industry is responsible for maximising the economic benefits to the United Kingdom of its oil and gas resources, taking into account the environmental impact of hydrocarbon development, and the need to ensure secure, diverse and sustainable supplies of energy for business and consumers at competitive prices.
1.26 The Directorate is located in three sites in the UK; London and Aberdeen and in Edinburgh, where the Core Store is located.
|
promote exploration for oil and gas resources over the maximum extent of the UKCS by means of an appropriate licensing regime which pays due regard to the environment and to the interests of other land and sea users; |
|
to regulate and promote oil and gas developments which are technically, economically and environmentally sound; |
|
to continue to improve our understanding of the upstream UK oil and gas industry and its international markets;in order to promote open competitive markets, strong companies in the UK and to influence EU policy formulation and international discussions; |
|
to collect, analyse and selectively disseminate data relating to the UK’s hydrocarbon reserves in order to assist planning and decision taking in Government and the industry; |
|
to collect the Royalties due to the Secretary of State efficiently, objectively and economically. |
THE OIL, GAS AND PETROCHEMICALS SUPPLY INDUSTRY
1.27 In the early 1970s it seemed that UK industry would be unable to supply much of the equipment and services needed to support the rapid expansion of oil and gas production on the UKCS. However, following the creation of a dedicated Government organisation sponsoring the supplies industry in 1973, the UK steadily improved its share of UKCS orders and throughout the 1980’s and early 1990’s it consistently supplied over 70% of the market. During this period exports became an increasing focus of Government support and downstream oil and gas and petrochemicals were added to the remit of the organisation now known as the Infrastructure and Energy Projects directorate (IEP).
1.28 IEP’s principal tasks are to ensure that the UK is a preferred location for investment by the oil and gas supply chain and, in relation to oil, gas and petrochemicals supply chain exports help UK suppliers maximise their share of the estimated £200 billion (1998) spent each year world-wide. IEP staff work with others in Government identifying opportunities and co-ordinating effort to maximise UK involvement in these markets, helping companies take part in promotional events such as Ministerial visits, missions, exhibitions and conferences. IEP’s Target Market group focuses on twelve markets; Azerbaijan, Kazakhstan and Turkmenistan; Brazil and Venezuela; Angola, Nigeria and Qatar; Russia and China; and Norway and Australia.
1.29 The Upstream Export Promotion group helps the UK supply chain and in particular smaller specialist firms, win business in upstream overseas markets in the rest of the world. It takes forward the traditional export promotion role and works with Trade Associations, regional organisations etc. The LNG and Petrochemicals group, working with the major contractors, has specific export responsibility for downstream opportunities out-with the target markets.
1.30 Within the UK, IEP teams work to improve the performance of Supply Chains in the oil & gas industry by: working to help UK companies develop their competitiveness; helping buyers identify competitive suppliers; providing information on market opportunities; advising on funding and other support available from DTI and other arms of government; upporting research and development of key technologies. A Business Support team provides advice on UK technical and commercial capability.
1.31 The Oil and Gas Industry Task Force Secretariat is provided by IEP. (for more details on the task force see box 1.1)
1.32 Further information can be found on IEP’s websites:
|
http://www.dti.gov.uk/ots/iep |
|
http://www.dti.gov.uk/ogsc |
|
http://www.dti.gov.uk/ogitf |
World-Wide Web Pages
1.33 Other information produced by the DTI aimed at the Oil and Gas industry has been available on the World Wide Web since December 1995. For anyone who has access to a web browser the information can be found at the following addresses:
|
www.og.gov.dti.uk |
Information currently available on these pages includes the following:
|
Petroleum Operations Notices |
|
Licensing Operations Notices |
|
Licensing Rounds |
|
CDA Data release |
|
About the DTI Oil and Gas Directorate |
Support for the UK oil, gas and petrochemicals supply chain and contact details.
1.34 DTI is investigating whether the web is a suitable mechanism for making public domain data available. Currently the official UK list of wells and some basic well header information details are available.
DIGITAL VERSION OF THE BROWN BOOK
1.35 A digital version of the 1999 Brown Book will be available for purchase in August 1999. The Digital Brown Book is a linked compilation of HTML (Hyper Text Mark-up Language) pages, tabulated data in MS Excel version 4 worksheets and comma delimited files (CSV) and graphic files (GIF and JPEG). The compilation can be accessed by using any standard web browser, but an MS Internet Explorer is also recommended.
1.36 For further information on obtaining a copy of the Digital Brown Book please contact:
|
OIL AND GAS INDUSTRY TASK FORCE The Oil and Gas Industry Task Force was formed to:
The Task Force held their first meeting on 27 January with further meetings scheduled each month until July. The Task Force will report back to the Secretary of State for Trade and Industry in the late summer. As Chairman, John Battle set the objective of quickly identifying actions to secure the future of the Industry in the UK At the time of writing, the Task Force has identified seven key areas for action:-
Sustainable Development Workgroups under the joint leadership of an industry and government sponsor have been formed for each of these action areas. Chairman and Deputy Chairman The Chairman and Deputy Chairman are John Battle, Minister for Energy and Industry, DTI; and Lord Macdonald, Minister for Business & Industry, Scottish Office.
|
Title
| Table of Contents
Chapter 1 | Chapter 2 | Chapter 3 | Chapter 4 | Chapter
5 | Chapter 6 | Chapter 7 | Chapter 8 | Chapter 9
Appendix 1 | Appendix 2 | Appendix 3 | Appendix 4 | Appendix
5 | Appendix 6 | Appendix 7 | Appendix 8 | Appendix 9
Appendix 10 | Appendix 11 | Appendix 12 |
Appendix 13 | Appendix 14 | Appendix 15 |
Appendix 16 | Appendix 17
Index Map | Plate 1 |
Plate 2W | Plate 2E | Plate 3W | Plate 3E | Plate
4W | Plate 4E | Plate 5W | Plate 5E | Plate 6
Plate 7 | Plate
8W | Plate 8E | Plate 9W | Plate 9E | Plate 10W | Plate
10E | Plate 11 | Plate 12 | Legend
Legal Notice