UK moves to clarify third-party access to offshore infrastructure

By the OGJ Online Staff

LONDON, Dec. 14 -- The UK government has begun to clarify and simplify the rules allowing third-party access to the oil and gas delivery infrastructure in the UK Continental Shelf.

The government stressed the action does not involve new regulations, but is intended to make access easier for new companies in the sector.

Brian Wilson, the UK energy minister, said that a consultation document would clarify how the government would handle applications to settle disputes over third party access to oil and gas infrastructure.

Oil companies are being invited to submit their views. Draft proposals will be brought forward in March. It is understood that the government feels that in some cases infrastructure owners are making unreasonable financial demands on those seeking access.

Wilson said, "Access to infrastructure on the UKCS is a key element in the process of extracting the UK's petroleum resources. The changing character of activity on the UKCS means that a better understanding of the use of these powers is required."

He said that government's procedure would ensure that applications are dealt with effectively and expeditiously, avoiding unnecessary expense.

Wilson said, "A key feature in the proposed approach is transparency. We want to encourage as much openness as possible between the parties, in the interests of narrowing the focus of the dispute and reducing the time taken to make a determination. We also want, subject to the consent of the parties, to publish our decisions with some of our reasoning. This will increase understanding of policies and approach.

"We recognize that there is commercial sensitivity surrounding the issues central to a dispute, but I would encourage companies to support this proposed approach by minimizing their use of statutory constraints on disclosure. While there have been concerns expressed by smaller production companies that high tariffs are deterring activity and informal approaches to the government to facilitate access negotiations, there has never been a formal request for the government to intervene in an application for access to infrastructure.

"We don't want any monopolistic behavior by infrastructure owners to deter the timely exploration for and development of new fields. We expect that if third party access tariffs were more cost reflective, this would increase exploration of, and ultimately increase production, from the UKCS."