U.K. REFORMS DEVELOPMENT APPROVAL PROCESS

The U.K. Department of Trade & Industry (DTI) has simplified requirements for oil and gas field development approval, particularly for small fields. Procedures introduced Dec. 1 are expected to cut the cost to licensees in seeking Annex B development approval. For a typical North Sea field reductions could amount to 200,000-300,000 ($300,000-450,000), DTI said. A further 100,000-200,000 ($150,000-300,000) is expected to be saved during the life of the field through reduced production reporting.

Dec. 20, 1993

2 min read

The U.K. Department of Trade & Industry (DTI) has simplified requirements for oil and gas field development approval, particularly for small fields.

Procedures introduced Dec. 1 are expected to cut the cost to licensees in seeking Annex B development approval. For a typical North Sea field reductions could amount to 200,000-300,000 ($300,000-450,000), DTI said.

A further 100,000-200,000 ($150,000-300,000) is expected to be saved during the life of the field through reduced production reporting.

Announcing last year his intention to ease development approval requirements, Energy Minister Tim Eggar said operators who showed good field management practices would have greater freedom to exploit fields to suit their commercial interests (OGJ, Nov. 2, 1992, p. 27).

APPROVAL CHANGES

The main changes are:

Much detailed technical documentation will be replaced by discussions to resolve conflicts between licensees and DTI.
Development plans will detail licensees' management plans. Complex fields requiring several volumes of text under the old regime now will require only about 50 pages. Simple fields will need only a few pages.
Fields of less than 20 million bbl of oil or 60 bcf of gas in place will be assessed less rigorously.
Approval times will be halved, with DTI indicating early in the development process where operators' plans are satisfactory.
Production approvals will be more flexible and for longer periods. Gas fields and simple oil or condensate fields will be approved for the predicted field life. Complex oil fields will typically be given 5 or 10 year approvals.
Production reporting will be simplified. Six month reporting has been abolished, while annual field reports will focus on deviation from development plans and proposed remedies.

"The focus of the new procedure will be to identify early any aspects of a development where the objectives of the licensees and the DTI diverge," Eggar said. "It will provide a streamlined process for resolving these differences which does not rely on excessive or irrelevant documentation.

"In the past, when fields failed to perform to expectation, a revised Annex B had to be prepared. This was costly in both time and effort. Under the new process this will be much less common, because the development plan will set out a management strategy to cater for departures from expectation, and the annual field reports will quickly identify divergences from the original plan."