The final report from the Wood Review of oil and gas operations on the UK Continental Shelf (UKCS) provides more details of the strategy for “maximizing economic recovery” (MER) there. The final recommendation outlines the roles of regulators and industry members, and identifies six sector strategies that the report claims could lead to a production increase of 3-4 billion boe over the next 20 years.
In an interim report published late last year, Ian Wood, retired chairman of the Wood Group, identified issues facing MER and proposed remedies (OGJ Online, Nov. 11, 2013). Feedback from the Department of Energy and Climate Change (DECC), UK government ministers and the oil and gas companies with licensed interests in the UKCS, was reflected in the final report, according to Wood Group.
The report calls for a shared strategy with a tripartite commitment among the UK government, oil and gas companies, and newly created regulatory body charged with licensing, supervision, and stewardship. Wood’s report sees this body as critical to influencing investment decisions aimed at achieving the MER UK strategy.
“It must be the catalyst…by facilitating, coordinating, mediating, and promoting collaboration; removing barriers; and encouraging more efficient exploration, development, and production,” said Wood.
The leadership role of the oil and gas industry was affirmed as well. According to the report, development of the UKCS must continue to be led by the operators that provide the investment of money, experience, and expertise.
These proposals were welcomed by industry association Oil & Gas UK. In a press release responding to the report, Oil & Gas UK Chief Executive Malcom Webb said, “It (the industry) has acknowledged the need to reexamine the way it does business on the UKCS and recognizes the growing pressure for fundamental change to maintain the basin’s competitiveness, attract investment, and sustain activity for the next 20 years and more.”
In addition to calling for greater commitment and collaboration, the report identified six sector strategies focusing on exploration, asset stewardship, regional development, infrastructure, technology, and decommissioning.
By implementing these strategies, oil and gas operators on the UKCS can avoid unnecessary costs, delays and commercial complexity in their dealings with one another and the regulatory body, said the report.