44
OGA Overview 2019/2020

OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

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Page 1: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

OGA Overview 20192020

Front cover Courtesy of BP Exploration

3

OGA role 4Introduction from the Chief Executive 5Current context 6-7Transition to net zero 8The big opportunity and energy integration 9Regulatory framework 10Exercise of the OGArsquos powers 11UKCS commercial landscape 12Ownership in transition 13Fiscal measures 14UK performs favourably 15Resource base 16Projects in execute phase 17UK oil and gas production projectionscenarios 18Measuring success 19

Revitalise exploration 20-21

Improve asset stewardship 22-24

Asset stewardship ndash driving improvement Further example operator benchmarksWells

Create the right conditions 25

Significance of the supply chain

Drive regional development 26-27

Area plansMarginal discoveries

Leverage technology and data 28-31

Leverage technologyDigital transformationOGA Data Centre

Improve decommissioning efficiency 32-33

Reducing decommissioning costs OGA role in the energy transition 34Carbon capture and storage 35

Develop people processes and systems 36-40

Onshore licensing and consents The way forwardMER UK Forum Steering Group and Task ForcesMER UK in actionExperienced leadership

Who does what in UK government 41 Key publications 42-43

Contents

4

OGA role

The OGA regulates the exploration and development of the UKrsquos offshore and Englandrsquos onshore oil and gas the UKrsquos carbon storage and gas storage and offloading activities

The OGA has an important role to promote investment in the UKCS promote the opportunities that the transition to a lower carbon economy will bring create value in the UK through exports and develop the prosperity of the industry including wider supply chain

Regulate

Promote

MERUK

The OGA has a critical role to influence and encourage a culture of greater collaboration on the UKCS improve commercial behaviours help enable a more efficient industry and to support and influence the UKrsquos transition to a low carbon economy

Influence

OGA valuesAccountableFairRobust Considerate

55

Introduction from the Chief ExecutiveThe Oil and Gas Authority (OGA) works alongside the UK oil and gas industry and government to maximise the economic recovery (MER UK) of the UKrsquos oil and gas resources and to fully support the energy transition

Much has been achieved over the past few years since the OGA was established The central production projection out to 2050 is now 39 billion barrels higher than it was in 2015 A mix of field life extensions infield reserve additions enhanced oil recovery new projects and discoveries have helped add this extra 45 to the original projection

Government forecasts show that oil and gas will remain an important part of our energy mix for the foreseeable future and maximising economic recovery from the UKCS is still vital to meet our energy demands and reduce reliance on hydrocarbon imports The OGA estimates there are potentially over 20 billion plus barrels of oil equivalent remaining in the UK Continental Shelf and decades of economic life

Very high on my priority list right now is working with government and oil and gas companies on the vital role this industry must play in the UKrsquos energy transition ndash both in driving to net zero carbon across the UKCS as quickly as possible and also progressing the opportunities that overall UK net zero presents We are very focused on vital solutions such as Carbon Capture and Storage (CCS) including re-using existing infrastructure The OGA is also leading a cross-regulator project studying opportunities for deeper offshore energy integration with renewables gas to wire hydrogen and offshore energy hubs

Key to achieving MER UK and central to the diversification to a lower carbon future is our world class supply chain This supply chain is also home to circa 80 of the jobs in our sector And now all new oil and gas projects (including decommissioning) require a SCAP (supply chain action plan) to be in place and approved by the OGA setting out the contracting strategy to ensure maximum value is generated from each project

Over the last few years we have worked with industry to better connect our supply chain within oil and gas whilst in parallel encouraging meaningful diversification into areas such as renewable energy and CCS In addition we have supported industry on the enormous export potential for this sector and for example in June 2019 helped organise the UKrsquos first ever Energy Exports Conference

Data and digitalisation will help unlock these and other opportunities We continue to maximise the value from the wealth of UKCS data making it openly and transparently available for all through our new National Data Repository and other digital platforms which are real game-changers

Our stewardship data provide evidence that industry is collaborating to sustain improvements Compared to 2014 costs are down production is up and the UKCS is globally competitive Decommissioning activity has progressed well with an impressive 17 reduction in the total estimated cost on a like-for-like basis on the 2017 inventory Operators are clearly thinking more strategically about technology uptake and there is evidence of more collaborative partnering with the supply chain and improvements in commercial behaviours more generally

Looking ahead industry must focus on establishing its role in the energy transition sustaining cost efficiencies and progressing efficient projects Achieve this and there is an exciting future ahead

Dr Andy Samuel Chief Executive

6

Current context Infrastructure

Exploration success rates Resources

10bn

Development Projects consented

54bn boein production or under development

NNS

WOS

CNS

SNSIS

wells drilled to date7800+

pipelines20000 kms+

fixed installations320+

subsea systems250+

Remaining potential 10bn - 20bn+

20bn+

2017 2018

Number of projects 7 20

CAPEX (pound billion) 07 39

Reserves (mmboe) 100 490

NPV10 (pound billion) 11 50

245839

1

Technical volume mmboe

Technical finding cost $boe

2014 2018

7

2008

20092010

2011

2012

2013

2014

2015

20162017

2018

Cost E

fficie

ncy a

nd O

pera

tiona

l

Effic

iency

Incr

easin

g

Cost Effic

iency and

Operational E

fficiency D

ecreasing

Improvem

ents in PE

but costs still rising

Annual average UOC and PEU

OC

(poundb

oe 2

018

pric

es)

21

19

17

15

13

11

9

7

5

PE

55 60 65 70 75 80

Production barrels of oil equivalent per day (boepd)

142 157 163 163

million million million million

2014 2015 2016 2017

Production efficiency (PE) and unit operating costs

Supply chain

pound27bnturnover

c40 through exports and supporting

c80 of UK oil and gas jobs

Source ndash Oil amp Gas UK and EY

40 80

2018

17million

280gt 280000 jobs in the UK delivered through or supported by upstream oil and gas activity

Jobs

Source ndash Oil amp Gas UK

8

Transition to net zeroMaximising economic recovery from the UKCS is vital to meet our energy demands reduce reliance on imports and support a supply chain which can diversify into other energy markets

UK oil demand and production

UK gas demand and production

1970 2035

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Oil Production

Oil Production (OGA March 2019Projection)

Actual Oil Demand (excluding marinebunkers)

Oil Demand (BEIS UEP 2018 ReferenceScenario)

1970 20350

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Gross Gas Production

Gross Gas Production (OGA March 2019Projection) Actual Gross Gas Demand

Gross Gas Demand (BEIS UEP 2018Reference Scenario)

Energy security

Diversification transition to net zero 2050

Strong supply chain

exporting globally

Anchor skills in UK

MER UK

2050

9

The big opportunity and energy integrationOil and gas continues to play key role in UK energy system

10

Regulatory frameworkLegislative Context

Supporting Obligations

Execution

Cost reduction

Guidance

SanctionNotices

Statutory non-statutory and Stewardship Expectations

Enforcementnotice

Financial penalty notice

Operator removal notice

Licence revocation notice

Central Obligation MER UK Strategy lsquoto take the steps necessary to secure that the maximum value of economically recoverable petroleum is recoveredrsquo Includes safeguards to protect and promote investment

Infrastructure Act 2015 Petroleum Act 1998Energy Acts 2011 and 2016

RegulatoryPowers

Facilitation Licensing regime Strategies and delivery programmes

MER UK plans

Regulatory powers

Non-binding dispute resolution

Information and samples Meetings Licence

model clausesThird party

access

Collaboration

Exploration Regional development

Asset stewardship Technology Decommissioning

Sanctions

Principal Objective The principal objective is that of lsquomaximising the economic recovery of UK petroleumrsquo

11

Exercise of the OGArsquos powersThe OGA uses lsquomeasured escalationrsquo to manage lsquoissuesrsquo where the OGA seeks primarily to influence the outcome and lsquocasesrsquo where the OGA will consider intervention with regulatory powers

Separately the OGA enforces licence obligations and deadlines to drive the pace of delivery and ensure that the right assets are in the right hands

Esca

latin

g le

vel o

f OG

A in

terv

entio

n

Operations Escalation Regulatory Escalation

Investigation5

Under these categories

Striking the right balance

RewardsSanctions Enforcement noticeFinancial penalty notice up to pound1mLicence revocation Operator removal

Greater value via collaborationTransparency and better data accessTimely effective decision making

MER UK benefits all

Asset Stewardship

Strategic use of data

Use

of P

ower

sOGA interventions

Area Plans

17 9 6 20 20

Further details on the measured escalation process can be found in the OGArsquos Enquiry Guidance

OGArsquos measured escalation process

45 Issues

33 Cases

Stage at which an issue or case issue closed

Enquiry

28Facilitation18 Enhanced

Facilitation

27

Access to infrastructure

Licence Commitments

Asset Transfers

Intra Inter JV

Area Solutions

Compliance

Closed interventions 2017 to present (Last update July 2019)

6

12

Changing commercial environment to deliver right assets right hands

UKCS commercial landscape

Contractor finance

Late life specialists

Innovative development

OGA

Assess financial capability

Understand technical capability

Review applicant capability to operate or credentials to be a non-op partner

Innovative deal structures helping new entrants

Majors consolidating and re-focusing eg West of Shetland

Innovative decommissioning agreements (eg seller retains liability) helping stimulate MampA

Late-life specialists bringing diversity

Chrysaor and Baker Hughes commercial partnership

Baker Hughes to fund a portion of CAPEX for a potential higher return

Risk and reward sharing drilling programme

Operator and service provider working together to realise value

BPEnQuest SVT and Magnus transactions

No cash upfront from EnQuest transaction funded by deferred consideration

Operator focused on bringing down costs and extend life

BP has stated this transaction highlights right assets right hands

Tolmount development

Antin Infrastructure Partners to part own platform and pipeline and pay for terminal upgrade

Development expected to produce 500bcf of gas with peak production of 300 mmscfd

First gas target Q4 2020 as per licence commitment

Case studies commercial modelsMampA and the regulatory process

Right assets right hands

BEIS

Manages Section 29 liability

Consultee in regulatory process for MampA activity

13

Ownership in transition

25000

Small Cap

Mid Cap

Large Cap Supermajor

Private Equity

Other

Utilities

35

Current production changed hands in past 5 years

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Average Daily Production

Operator shares of infrastructure based

on throughput

2014

2018

2018Production

2014Production

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Key

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

boed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Each pie chart represents a geographical area

14

Supplementary Charge reduced

from 32 to 10

Petroleum Revenue Tax permanently

reduced from 50 to 0

Basin-wide Investment Allowance

2 x pound20 million for new geophysical surveys in 2015 amp 2016 and pound5m for explorationdata in 2017

Transferable tax history gives buyers increased certainty

they can get tax relief for their

decommissioning costs

In line with the Driving Investment principles various measures introduced since 2015 include

Fiscal measuresThe three Driving Investment principles for tax policy-making

The overall tax burden will need to fall as the basin matures

In setting fiscal policy the government will consider the wider economicbenefits of oil amp gas production in addition to revenues

A lsquofair returnrsquo will take account of the global competitiveness of commercial opportunities in the UK and UKCS commodity prices and costs

1

2

3

15

Leading on returns payback break-evens and value

UK performs favourablyIRR and reserves Payback periods Break-evens and value per bbl

Source OGAWood Mackenzie

Number of projects in each region Payback period years

UK post tax IRR is 13 higher than next highest basin

MER UK Forum and Task Forces the OGA and industry jointly committed to maintaining current cost disciplines

UKCS still has diverse portfolio of opportunities from large complex developments to small low cost tie-backs

Opportunities and dramatically lower unit costs mean UKCS boasts world-class payback periods

Recent investments in UK projects have delivered world-class returns in terms of breakeven and value per barrel

OGArsquos marginal discoveries initiative illustrates the continuing potential of the UK

Value per barrel (post tax) Breakevens

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 2: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

Front cover Courtesy of BP Exploration

3

OGA role 4Introduction from the Chief Executive 5Current context 6-7Transition to net zero 8The big opportunity and energy integration 9Regulatory framework 10Exercise of the OGArsquos powers 11UKCS commercial landscape 12Ownership in transition 13Fiscal measures 14UK performs favourably 15Resource base 16Projects in execute phase 17UK oil and gas production projectionscenarios 18Measuring success 19

Revitalise exploration 20-21

Improve asset stewardship 22-24

Asset stewardship ndash driving improvement Further example operator benchmarksWells

Create the right conditions 25

Significance of the supply chain

Drive regional development 26-27

Area plansMarginal discoveries

Leverage technology and data 28-31

Leverage technologyDigital transformationOGA Data Centre

Improve decommissioning efficiency 32-33

Reducing decommissioning costs OGA role in the energy transition 34Carbon capture and storage 35

Develop people processes and systems 36-40

Onshore licensing and consents The way forwardMER UK Forum Steering Group and Task ForcesMER UK in actionExperienced leadership

Who does what in UK government 41 Key publications 42-43

Contents

4

OGA role

The OGA regulates the exploration and development of the UKrsquos offshore and Englandrsquos onshore oil and gas the UKrsquos carbon storage and gas storage and offloading activities

The OGA has an important role to promote investment in the UKCS promote the opportunities that the transition to a lower carbon economy will bring create value in the UK through exports and develop the prosperity of the industry including wider supply chain

Regulate

Promote

MERUK

The OGA has a critical role to influence and encourage a culture of greater collaboration on the UKCS improve commercial behaviours help enable a more efficient industry and to support and influence the UKrsquos transition to a low carbon economy

Influence

OGA valuesAccountableFairRobust Considerate

55

Introduction from the Chief ExecutiveThe Oil and Gas Authority (OGA) works alongside the UK oil and gas industry and government to maximise the economic recovery (MER UK) of the UKrsquos oil and gas resources and to fully support the energy transition

Much has been achieved over the past few years since the OGA was established The central production projection out to 2050 is now 39 billion barrels higher than it was in 2015 A mix of field life extensions infield reserve additions enhanced oil recovery new projects and discoveries have helped add this extra 45 to the original projection

Government forecasts show that oil and gas will remain an important part of our energy mix for the foreseeable future and maximising economic recovery from the UKCS is still vital to meet our energy demands and reduce reliance on hydrocarbon imports The OGA estimates there are potentially over 20 billion plus barrels of oil equivalent remaining in the UK Continental Shelf and decades of economic life

Very high on my priority list right now is working with government and oil and gas companies on the vital role this industry must play in the UKrsquos energy transition ndash both in driving to net zero carbon across the UKCS as quickly as possible and also progressing the opportunities that overall UK net zero presents We are very focused on vital solutions such as Carbon Capture and Storage (CCS) including re-using existing infrastructure The OGA is also leading a cross-regulator project studying opportunities for deeper offshore energy integration with renewables gas to wire hydrogen and offshore energy hubs

Key to achieving MER UK and central to the diversification to a lower carbon future is our world class supply chain This supply chain is also home to circa 80 of the jobs in our sector And now all new oil and gas projects (including decommissioning) require a SCAP (supply chain action plan) to be in place and approved by the OGA setting out the contracting strategy to ensure maximum value is generated from each project

Over the last few years we have worked with industry to better connect our supply chain within oil and gas whilst in parallel encouraging meaningful diversification into areas such as renewable energy and CCS In addition we have supported industry on the enormous export potential for this sector and for example in June 2019 helped organise the UKrsquos first ever Energy Exports Conference

Data and digitalisation will help unlock these and other opportunities We continue to maximise the value from the wealth of UKCS data making it openly and transparently available for all through our new National Data Repository and other digital platforms which are real game-changers

Our stewardship data provide evidence that industry is collaborating to sustain improvements Compared to 2014 costs are down production is up and the UKCS is globally competitive Decommissioning activity has progressed well with an impressive 17 reduction in the total estimated cost on a like-for-like basis on the 2017 inventory Operators are clearly thinking more strategically about technology uptake and there is evidence of more collaborative partnering with the supply chain and improvements in commercial behaviours more generally

Looking ahead industry must focus on establishing its role in the energy transition sustaining cost efficiencies and progressing efficient projects Achieve this and there is an exciting future ahead

Dr Andy Samuel Chief Executive

6

Current context Infrastructure

Exploration success rates Resources

10bn

Development Projects consented

54bn boein production or under development

NNS

WOS

CNS

SNSIS

wells drilled to date7800+

pipelines20000 kms+

fixed installations320+

subsea systems250+

Remaining potential 10bn - 20bn+

20bn+

2017 2018

Number of projects 7 20

CAPEX (pound billion) 07 39

Reserves (mmboe) 100 490

NPV10 (pound billion) 11 50

245839

1

Technical volume mmboe

Technical finding cost $boe

2014 2018

7

2008

20092010

2011

2012

2013

2014

2015

20162017

2018

Cost E

fficie

ncy a

nd O

pera

tiona

l

Effic

iency

Incr

easin

g

Cost Effic

iency and

Operational E

fficiency D

ecreasing

Improvem

ents in PE

but costs still rising

Annual average UOC and PEU

OC

(poundb

oe 2

018

pric

es)

21

19

17

15

13

11

9

7

5

PE

55 60 65 70 75 80

Production barrels of oil equivalent per day (boepd)

142 157 163 163

million million million million

2014 2015 2016 2017

Production efficiency (PE) and unit operating costs

Supply chain

pound27bnturnover

c40 through exports and supporting

c80 of UK oil and gas jobs

Source ndash Oil amp Gas UK and EY

40 80

2018

17million

280gt 280000 jobs in the UK delivered through or supported by upstream oil and gas activity

Jobs

Source ndash Oil amp Gas UK

8

Transition to net zeroMaximising economic recovery from the UKCS is vital to meet our energy demands reduce reliance on imports and support a supply chain which can diversify into other energy markets

UK oil demand and production

UK gas demand and production

1970 2035

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Oil Production

Oil Production (OGA March 2019Projection)

Actual Oil Demand (excluding marinebunkers)

Oil Demand (BEIS UEP 2018 ReferenceScenario)

1970 20350

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Gross Gas Production

Gross Gas Production (OGA March 2019Projection) Actual Gross Gas Demand

Gross Gas Demand (BEIS UEP 2018Reference Scenario)

Energy security

Diversification transition to net zero 2050

Strong supply chain

exporting globally

Anchor skills in UK

MER UK

2050

9

The big opportunity and energy integrationOil and gas continues to play key role in UK energy system

10

Regulatory frameworkLegislative Context

Supporting Obligations

Execution

Cost reduction

Guidance

SanctionNotices

Statutory non-statutory and Stewardship Expectations

Enforcementnotice

Financial penalty notice

Operator removal notice

Licence revocation notice

Central Obligation MER UK Strategy lsquoto take the steps necessary to secure that the maximum value of economically recoverable petroleum is recoveredrsquo Includes safeguards to protect and promote investment

Infrastructure Act 2015 Petroleum Act 1998Energy Acts 2011 and 2016

RegulatoryPowers

Facilitation Licensing regime Strategies and delivery programmes

MER UK plans

Regulatory powers

Non-binding dispute resolution

Information and samples Meetings Licence

model clausesThird party

access

Collaboration

Exploration Regional development

Asset stewardship Technology Decommissioning

Sanctions

Principal Objective The principal objective is that of lsquomaximising the economic recovery of UK petroleumrsquo

11

Exercise of the OGArsquos powersThe OGA uses lsquomeasured escalationrsquo to manage lsquoissuesrsquo where the OGA seeks primarily to influence the outcome and lsquocasesrsquo where the OGA will consider intervention with regulatory powers

Separately the OGA enforces licence obligations and deadlines to drive the pace of delivery and ensure that the right assets are in the right hands

Esca

latin

g le

vel o

f OG

A in

terv

entio

n

Operations Escalation Regulatory Escalation

Investigation5

Under these categories

Striking the right balance

RewardsSanctions Enforcement noticeFinancial penalty notice up to pound1mLicence revocation Operator removal

Greater value via collaborationTransparency and better data accessTimely effective decision making

MER UK benefits all

Asset Stewardship

Strategic use of data

Use

of P

ower

sOGA interventions

Area Plans

17 9 6 20 20

Further details on the measured escalation process can be found in the OGArsquos Enquiry Guidance

OGArsquos measured escalation process

45 Issues

33 Cases

Stage at which an issue or case issue closed

Enquiry

28Facilitation18 Enhanced

Facilitation

27

Access to infrastructure

Licence Commitments

Asset Transfers

Intra Inter JV

Area Solutions

Compliance

Closed interventions 2017 to present (Last update July 2019)

6

12

Changing commercial environment to deliver right assets right hands

UKCS commercial landscape

Contractor finance

Late life specialists

Innovative development

OGA

Assess financial capability

Understand technical capability

Review applicant capability to operate or credentials to be a non-op partner

Innovative deal structures helping new entrants

Majors consolidating and re-focusing eg West of Shetland

Innovative decommissioning agreements (eg seller retains liability) helping stimulate MampA

Late-life specialists bringing diversity

Chrysaor and Baker Hughes commercial partnership

Baker Hughes to fund a portion of CAPEX for a potential higher return

Risk and reward sharing drilling programme

Operator and service provider working together to realise value

BPEnQuest SVT and Magnus transactions

No cash upfront from EnQuest transaction funded by deferred consideration

Operator focused on bringing down costs and extend life

BP has stated this transaction highlights right assets right hands

Tolmount development

Antin Infrastructure Partners to part own platform and pipeline and pay for terminal upgrade

Development expected to produce 500bcf of gas with peak production of 300 mmscfd

First gas target Q4 2020 as per licence commitment

Case studies commercial modelsMampA and the regulatory process

Right assets right hands

BEIS

Manages Section 29 liability

Consultee in regulatory process for MampA activity

13

Ownership in transition

25000

Small Cap

Mid Cap

Large Cap Supermajor

Private Equity

Other

Utilities

35

Current production changed hands in past 5 years

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Average Daily Production

Operator shares of infrastructure based

on throughput

2014

2018

2018Production

2014Production

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Key

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

boed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Each pie chart represents a geographical area

14

Supplementary Charge reduced

from 32 to 10

Petroleum Revenue Tax permanently

reduced from 50 to 0

Basin-wide Investment Allowance

2 x pound20 million for new geophysical surveys in 2015 amp 2016 and pound5m for explorationdata in 2017

Transferable tax history gives buyers increased certainty

they can get tax relief for their

decommissioning costs

In line with the Driving Investment principles various measures introduced since 2015 include

Fiscal measuresThe three Driving Investment principles for tax policy-making

The overall tax burden will need to fall as the basin matures

In setting fiscal policy the government will consider the wider economicbenefits of oil amp gas production in addition to revenues

A lsquofair returnrsquo will take account of the global competitiveness of commercial opportunities in the UK and UKCS commodity prices and costs

1

2

3

15

Leading on returns payback break-evens and value

UK performs favourablyIRR and reserves Payback periods Break-evens and value per bbl

Source OGAWood Mackenzie

Number of projects in each region Payback period years

UK post tax IRR is 13 higher than next highest basin

MER UK Forum and Task Forces the OGA and industry jointly committed to maintaining current cost disciplines

UKCS still has diverse portfolio of opportunities from large complex developments to small low cost tie-backs

Opportunities and dramatically lower unit costs mean UKCS boasts world-class payback periods

Recent investments in UK projects have delivered world-class returns in terms of breakeven and value per barrel

OGArsquos marginal discoveries initiative illustrates the continuing potential of the UK

Value per barrel (post tax) Breakevens

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 3: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

3

OGA role 4Introduction from the Chief Executive 5Current context 6-7Transition to net zero 8The big opportunity and energy integration 9Regulatory framework 10Exercise of the OGArsquos powers 11UKCS commercial landscape 12Ownership in transition 13Fiscal measures 14UK performs favourably 15Resource base 16Projects in execute phase 17UK oil and gas production projectionscenarios 18Measuring success 19

Revitalise exploration 20-21

Improve asset stewardship 22-24

Asset stewardship ndash driving improvement Further example operator benchmarksWells

Create the right conditions 25

Significance of the supply chain

Drive regional development 26-27

Area plansMarginal discoveries

Leverage technology and data 28-31

Leverage technologyDigital transformationOGA Data Centre

Improve decommissioning efficiency 32-33

Reducing decommissioning costs OGA role in the energy transition 34Carbon capture and storage 35

Develop people processes and systems 36-40

Onshore licensing and consents The way forwardMER UK Forum Steering Group and Task ForcesMER UK in actionExperienced leadership

Who does what in UK government 41 Key publications 42-43

Contents

4

OGA role

The OGA regulates the exploration and development of the UKrsquos offshore and Englandrsquos onshore oil and gas the UKrsquos carbon storage and gas storage and offloading activities

The OGA has an important role to promote investment in the UKCS promote the opportunities that the transition to a lower carbon economy will bring create value in the UK through exports and develop the prosperity of the industry including wider supply chain

Regulate

Promote

MERUK

The OGA has a critical role to influence and encourage a culture of greater collaboration on the UKCS improve commercial behaviours help enable a more efficient industry and to support and influence the UKrsquos transition to a low carbon economy

Influence

OGA valuesAccountableFairRobust Considerate

55

Introduction from the Chief ExecutiveThe Oil and Gas Authority (OGA) works alongside the UK oil and gas industry and government to maximise the economic recovery (MER UK) of the UKrsquos oil and gas resources and to fully support the energy transition

Much has been achieved over the past few years since the OGA was established The central production projection out to 2050 is now 39 billion barrels higher than it was in 2015 A mix of field life extensions infield reserve additions enhanced oil recovery new projects and discoveries have helped add this extra 45 to the original projection

Government forecasts show that oil and gas will remain an important part of our energy mix for the foreseeable future and maximising economic recovery from the UKCS is still vital to meet our energy demands and reduce reliance on hydrocarbon imports The OGA estimates there are potentially over 20 billion plus barrels of oil equivalent remaining in the UK Continental Shelf and decades of economic life

Very high on my priority list right now is working with government and oil and gas companies on the vital role this industry must play in the UKrsquos energy transition ndash both in driving to net zero carbon across the UKCS as quickly as possible and also progressing the opportunities that overall UK net zero presents We are very focused on vital solutions such as Carbon Capture and Storage (CCS) including re-using existing infrastructure The OGA is also leading a cross-regulator project studying opportunities for deeper offshore energy integration with renewables gas to wire hydrogen and offshore energy hubs

Key to achieving MER UK and central to the diversification to a lower carbon future is our world class supply chain This supply chain is also home to circa 80 of the jobs in our sector And now all new oil and gas projects (including decommissioning) require a SCAP (supply chain action plan) to be in place and approved by the OGA setting out the contracting strategy to ensure maximum value is generated from each project

Over the last few years we have worked with industry to better connect our supply chain within oil and gas whilst in parallel encouraging meaningful diversification into areas such as renewable energy and CCS In addition we have supported industry on the enormous export potential for this sector and for example in June 2019 helped organise the UKrsquos first ever Energy Exports Conference

Data and digitalisation will help unlock these and other opportunities We continue to maximise the value from the wealth of UKCS data making it openly and transparently available for all through our new National Data Repository and other digital platforms which are real game-changers

Our stewardship data provide evidence that industry is collaborating to sustain improvements Compared to 2014 costs are down production is up and the UKCS is globally competitive Decommissioning activity has progressed well with an impressive 17 reduction in the total estimated cost on a like-for-like basis on the 2017 inventory Operators are clearly thinking more strategically about technology uptake and there is evidence of more collaborative partnering with the supply chain and improvements in commercial behaviours more generally

Looking ahead industry must focus on establishing its role in the energy transition sustaining cost efficiencies and progressing efficient projects Achieve this and there is an exciting future ahead

Dr Andy Samuel Chief Executive

6

Current context Infrastructure

Exploration success rates Resources

10bn

Development Projects consented

54bn boein production or under development

NNS

WOS

CNS

SNSIS

wells drilled to date7800+

pipelines20000 kms+

fixed installations320+

subsea systems250+

Remaining potential 10bn - 20bn+

20bn+

2017 2018

Number of projects 7 20

CAPEX (pound billion) 07 39

Reserves (mmboe) 100 490

NPV10 (pound billion) 11 50

245839

1

Technical volume mmboe

Technical finding cost $boe

2014 2018

7

2008

20092010

2011

2012

2013

2014

2015

20162017

2018

Cost E

fficie

ncy a

nd O

pera

tiona

l

Effic

iency

Incr

easin

g

Cost Effic

iency and

Operational E

fficiency D

ecreasing

Improvem

ents in PE

but costs still rising

Annual average UOC and PEU

OC

(poundb

oe 2

018

pric

es)

21

19

17

15

13

11

9

7

5

PE

55 60 65 70 75 80

Production barrels of oil equivalent per day (boepd)

142 157 163 163

million million million million

2014 2015 2016 2017

Production efficiency (PE) and unit operating costs

Supply chain

pound27bnturnover

c40 through exports and supporting

c80 of UK oil and gas jobs

Source ndash Oil amp Gas UK and EY

40 80

2018

17million

280gt 280000 jobs in the UK delivered through or supported by upstream oil and gas activity

Jobs

Source ndash Oil amp Gas UK

8

Transition to net zeroMaximising economic recovery from the UKCS is vital to meet our energy demands reduce reliance on imports and support a supply chain which can diversify into other energy markets

UK oil demand and production

UK gas demand and production

1970 2035

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Oil Production

Oil Production (OGA March 2019Projection)

Actual Oil Demand (excluding marinebunkers)

Oil Demand (BEIS UEP 2018 ReferenceScenario)

1970 20350

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Gross Gas Production

Gross Gas Production (OGA March 2019Projection) Actual Gross Gas Demand

Gross Gas Demand (BEIS UEP 2018Reference Scenario)

Energy security

Diversification transition to net zero 2050

Strong supply chain

exporting globally

Anchor skills in UK

MER UK

2050

9

The big opportunity and energy integrationOil and gas continues to play key role in UK energy system

10

Regulatory frameworkLegislative Context

Supporting Obligations

Execution

Cost reduction

Guidance

SanctionNotices

Statutory non-statutory and Stewardship Expectations

Enforcementnotice

Financial penalty notice

Operator removal notice

Licence revocation notice

Central Obligation MER UK Strategy lsquoto take the steps necessary to secure that the maximum value of economically recoverable petroleum is recoveredrsquo Includes safeguards to protect and promote investment

Infrastructure Act 2015 Petroleum Act 1998Energy Acts 2011 and 2016

RegulatoryPowers

Facilitation Licensing regime Strategies and delivery programmes

MER UK plans

Regulatory powers

Non-binding dispute resolution

Information and samples Meetings Licence

model clausesThird party

access

Collaboration

Exploration Regional development

Asset stewardship Technology Decommissioning

Sanctions

Principal Objective The principal objective is that of lsquomaximising the economic recovery of UK petroleumrsquo

11

Exercise of the OGArsquos powersThe OGA uses lsquomeasured escalationrsquo to manage lsquoissuesrsquo where the OGA seeks primarily to influence the outcome and lsquocasesrsquo where the OGA will consider intervention with regulatory powers

Separately the OGA enforces licence obligations and deadlines to drive the pace of delivery and ensure that the right assets are in the right hands

Esca

latin

g le

vel o

f OG

A in

terv

entio

n

Operations Escalation Regulatory Escalation

Investigation5

Under these categories

Striking the right balance

RewardsSanctions Enforcement noticeFinancial penalty notice up to pound1mLicence revocation Operator removal

Greater value via collaborationTransparency and better data accessTimely effective decision making

MER UK benefits all

Asset Stewardship

Strategic use of data

Use

of P

ower

sOGA interventions

Area Plans

17 9 6 20 20

Further details on the measured escalation process can be found in the OGArsquos Enquiry Guidance

OGArsquos measured escalation process

45 Issues

33 Cases

Stage at which an issue or case issue closed

Enquiry

28Facilitation18 Enhanced

Facilitation

27

Access to infrastructure

Licence Commitments

Asset Transfers

Intra Inter JV

Area Solutions

Compliance

Closed interventions 2017 to present (Last update July 2019)

6

12

Changing commercial environment to deliver right assets right hands

UKCS commercial landscape

Contractor finance

Late life specialists

Innovative development

OGA

Assess financial capability

Understand technical capability

Review applicant capability to operate or credentials to be a non-op partner

Innovative deal structures helping new entrants

Majors consolidating and re-focusing eg West of Shetland

Innovative decommissioning agreements (eg seller retains liability) helping stimulate MampA

Late-life specialists bringing diversity

Chrysaor and Baker Hughes commercial partnership

Baker Hughes to fund a portion of CAPEX for a potential higher return

Risk and reward sharing drilling programme

Operator and service provider working together to realise value

BPEnQuest SVT and Magnus transactions

No cash upfront from EnQuest transaction funded by deferred consideration

Operator focused on bringing down costs and extend life

BP has stated this transaction highlights right assets right hands

Tolmount development

Antin Infrastructure Partners to part own platform and pipeline and pay for terminal upgrade

Development expected to produce 500bcf of gas with peak production of 300 mmscfd

First gas target Q4 2020 as per licence commitment

Case studies commercial modelsMampA and the regulatory process

Right assets right hands

BEIS

Manages Section 29 liability

Consultee in regulatory process for MampA activity

13

Ownership in transition

25000

Small Cap

Mid Cap

Large Cap Supermajor

Private Equity

Other

Utilities

35

Current production changed hands in past 5 years

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Average Daily Production

Operator shares of infrastructure based

on throughput

2014

2018

2018Production

2014Production

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Key

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

boed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Each pie chart represents a geographical area

14

Supplementary Charge reduced

from 32 to 10

Petroleum Revenue Tax permanently

reduced from 50 to 0

Basin-wide Investment Allowance

2 x pound20 million for new geophysical surveys in 2015 amp 2016 and pound5m for explorationdata in 2017

Transferable tax history gives buyers increased certainty

they can get tax relief for their

decommissioning costs

In line with the Driving Investment principles various measures introduced since 2015 include

Fiscal measuresThe three Driving Investment principles for tax policy-making

The overall tax burden will need to fall as the basin matures

In setting fiscal policy the government will consider the wider economicbenefits of oil amp gas production in addition to revenues

A lsquofair returnrsquo will take account of the global competitiveness of commercial opportunities in the UK and UKCS commodity prices and costs

1

2

3

15

Leading on returns payback break-evens and value

UK performs favourablyIRR and reserves Payback periods Break-evens and value per bbl

Source OGAWood Mackenzie

Number of projects in each region Payback period years

UK post tax IRR is 13 higher than next highest basin

MER UK Forum and Task Forces the OGA and industry jointly committed to maintaining current cost disciplines

UKCS still has diverse portfolio of opportunities from large complex developments to small low cost tie-backs

Opportunities and dramatically lower unit costs mean UKCS boasts world-class payback periods

Recent investments in UK projects have delivered world-class returns in terms of breakeven and value per barrel

OGArsquos marginal discoveries initiative illustrates the continuing potential of the UK

Value per barrel (post tax) Breakevens

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 4: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

4

OGA role

The OGA regulates the exploration and development of the UKrsquos offshore and Englandrsquos onshore oil and gas the UKrsquos carbon storage and gas storage and offloading activities

The OGA has an important role to promote investment in the UKCS promote the opportunities that the transition to a lower carbon economy will bring create value in the UK through exports and develop the prosperity of the industry including wider supply chain

Regulate

Promote

MERUK

The OGA has a critical role to influence and encourage a culture of greater collaboration on the UKCS improve commercial behaviours help enable a more efficient industry and to support and influence the UKrsquos transition to a low carbon economy

Influence

OGA valuesAccountableFairRobust Considerate

55

Introduction from the Chief ExecutiveThe Oil and Gas Authority (OGA) works alongside the UK oil and gas industry and government to maximise the economic recovery (MER UK) of the UKrsquos oil and gas resources and to fully support the energy transition

Much has been achieved over the past few years since the OGA was established The central production projection out to 2050 is now 39 billion barrels higher than it was in 2015 A mix of field life extensions infield reserve additions enhanced oil recovery new projects and discoveries have helped add this extra 45 to the original projection

Government forecasts show that oil and gas will remain an important part of our energy mix for the foreseeable future and maximising economic recovery from the UKCS is still vital to meet our energy demands and reduce reliance on hydrocarbon imports The OGA estimates there are potentially over 20 billion plus barrels of oil equivalent remaining in the UK Continental Shelf and decades of economic life

Very high on my priority list right now is working with government and oil and gas companies on the vital role this industry must play in the UKrsquos energy transition ndash both in driving to net zero carbon across the UKCS as quickly as possible and also progressing the opportunities that overall UK net zero presents We are very focused on vital solutions such as Carbon Capture and Storage (CCS) including re-using existing infrastructure The OGA is also leading a cross-regulator project studying opportunities for deeper offshore energy integration with renewables gas to wire hydrogen and offshore energy hubs

Key to achieving MER UK and central to the diversification to a lower carbon future is our world class supply chain This supply chain is also home to circa 80 of the jobs in our sector And now all new oil and gas projects (including decommissioning) require a SCAP (supply chain action plan) to be in place and approved by the OGA setting out the contracting strategy to ensure maximum value is generated from each project

Over the last few years we have worked with industry to better connect our supply chain within oil and gas whilst in parallel encouraging meaningful diversification into areas such as renewable energy and CCS In addition we have supported industry on the enormous export potential for this sector and for example in June 2019 helped organise the UKrsquos first ever Energy Exports Conference

Data and digitalisation will help unlock these and other opportunities We continue to maximise the value from the wealth of UKCS data making it openly and transparently available for all through our new National Data Repository and other digital platforms which are real game-changers

Our stewardship data provide evidence that industry is collaborating to sustain improvements Compared to 2014 costs are down production is up and the UKCS is globally competitive Decommissioning activity has progressed well with an impressive 17 reduction in the total estimated cost on a like-for-like basis on the 2017 inventory Operators are clearly thinking more strategically about technology uptake and there is evidence of more collaborative partnering with the supply chain and improvements in commercial behaviours more generally

Looking ahead industry must focus on establishing its role in the energy transition sustaining cost efficiencies and progressing efficient projects Achieve this and there is an exciting future ahead

Dr Andy Samuel Chief Executive

6

Current context Infrastructure

Exploration success rates Resources

10bn

Development Projects consented

54bn boein production or under development

NNS

WOS

CNS

SNSIS

wells drilled to date7800+

pipelines20000 kms+

fixed installations320+

subsea systems250+

Remaining potential 10bn - 20bn+

20bn+

2017 2018

Number of projects 7 20

CAPEX (pound billion) 07 39

Reserves (mmboe) 100 490

NPV10 (pound billion) 11 50

245839

1

Technical volume mmboe

Technical finding cost $boe

2014 2018

7

2008

20092010

2011

2012

2013

2014

2015

20162017

2018

Cost E

fficie

ncy a

nd O

pera

tiona

l

Effic

iency

Incr

easin

g

Cost Effic

iency and

Operational E

fficiency D

ecreasing

Improvem

ents in PE

but costs still rising

Annual average UOC and PEU

OC

(poundb

oe 2

018

pric

es)

21

19

17

15

13

11

9

7

5

PE

55 60 65 70 75 80

Production barrels of oil equivalent per day (boepd)

142 157 163 163

million million million million

2014 2015 2016 2017

Production efficiency (PE) and unit operating costs

Supply chain

pound27bnturnover

c40 through exports and supporting

c80 of UK oil and gas jobs

Source ndash Oil amp Gas UK and EY

40 80

2018

17million

280gt 280000 jobs in the UK delivered through or supported by upstream oil and gas activity

Jobs

Source ndash Oil amp Gas UK

8

Transition to net zeroMaximising economic recovery from the UKCS is vital to meet our energy demands reduce reliance on imports and support a supply chain which can diversify into other energy markets

UK oil demand and production

UK gas demand and production

1970 2035

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Oil Production

Oil Production (OGA March 2019Projection)

Actual Oil Demand (excluding marinebunkers)

Oil Demand (BEIS UEP 2018 ReferenceScenario)

1970 20350

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Gross Gas Production

Gross Gas Production (OGA March 2019Projection) Actual Gross Gas Demand

Gross Gas Demand (BEIS UEP 2018Reference Scenario)

Energy security

Diversification transition to net zero 2050

Strong supply chain

exporting globally

Anchor skills in UK

MER UK

2050

9

The big opportunity and energy integrationOil and gas continues to play key role in UK energy system

10

Regulatory frameworkLegislative Context

Supporting Obligations

Execution

Cost reduction

Guidance

SanctionNotices

Statutory non-statutory and Stewardship Expectations

Enforcementnotice

Financial penalty notice

Operator removal notice

Licence revocation notice

Central Obligation MER UK Strategy lsquoto take the steps necessary to secure that the maximum value of economically recoverable petroleum is recoveredrsquo Includes safeguards to protect and promote investment

Infrastructure Act 2015 Petroleum Act 1998Energy Acts 2011 and 2016

RegulatoryPowers

Facilitation Licensing regime Strategies and delivery programmes

MER UK plans

Regulatory powers

Non-binding dispute resolution

Information and samples Meetings Licence

model clausesThird party

access

Collaboration

Exploration Regional development

Asset stewardship Technology Decommissioning

Sanctions

Principal Objective The principal objective is that of lsquomaximising the economic recovery of UK petroleumrsquo

11

Exercise of the OGArsquos powersThe OGA uses lsquomeasured escalationrsquo to manage lsquoissuesrsquo where the OGA seeks primarily to influence the outcome and lsquocasesrsquo where the OGA will consider intervention with regulatory powers

Separately the OGA enforces licence obligations and deadlines to drive the pace of delivery and ensure that the right assets are in the right hands

Esca

latin

g le

vel o

f OG

A in

terv

entio

n

Operations Escalation Regulatory Escalation

Investigation5

Under these categories

Striking the right balance

RewardsSanctions Enforcement noticeFinancial penalty notice up to pound1mLicence revocation Operator removal

Greater value via collaborationTransparency and better data accessTimely effective decision making

MER UK benefits all

Asset Stewardship

Strategic use of data

Use

of P

ower

sOGA interventions

Area Plans

17 9 6 20 20

Further details on the measured escalation process can be found in the OGArsquos Enquiry Guidance

OGArsquos measured escalation process

45 Issues

33 Cases

Stage at which an issue or case issue closed

Enquiry

28Facilitation18 Enhanced

Facilitation

27

Access to infrastructure

Licence Commitments

Asset Transfers

Intra Inter JV

Area Solutions

Compliance

Closed interventions 2017 to present (Last update July 2019)

6

12

Changing commercial environment to deliver right assets right hands

UKCS commercial landscape

Contractor finance

Late life specialists

Innovative development

OGA

Assess financial capability

Understand technical capability

Review applicant capability to operate or credentials to be a non-op partner

Innovative deal structures helping new entrants

Majors consolidating and re-focusing eg West of Shetland

Innovative decommissioning agreements (eg seller retains liability) helping stimulate MampA

Late-life specialists bringing diversity

Chrysaor and Baker Hughes commercial partnership

Baker Hughes to fund a portion of CAPEX for a potential higher return

Risk and reward sharing drilling programme

Operator and service provider working together to realise value

BPEnQuest SVT and Magnus transactions

No cash upfront from EnQuest transaction funded by deferred consideration

Operator focused on bringing down costs and extend life

BP has stated this transaction highlights right assets right hands

Tolmount development

Antin Infrastructure Partners to part own platform and pipeline and pay for terminal upgrade

Development expected to produce 500bcf of gas with peak production of 300 mmscfd

First gas target Q4 2020 as per licence commitment

Case studies commercial modelsMampA and the regulatory process

Right assets right hands

BEIS

Manages Section 29 liability

Consultee in regulatory process for MampA activity

13

Ownership in transition

25000

Small Cap

Mid Cap

Large Cap Supermajor

Private Equity

Other

Utilities

35

Current production changed hands in past 5 years

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Average Daily Production

Operator shares of infrastructure based

on throughput

2014

2018

2018Production

2014Production

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Key

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

boed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Each pie chart represents a geographical area

14

Supplementary Charge reduced

from 32 to 10

Petroleum Revenue Tax permanently

reduced from 50 to 0

Basin-wide Investment Allowance

2 x pound20 million for new geophysical surveys in 2015 amp 2016 and pound5m for explorationdata in 2017

Transferable tax history gives buyers increased certainty

they can get tax relief for their

decommissioning costs

In line with the Driving Investment principles various measures introduced since 2015 include

Fiscal measuresThe three Driving Investment principles for tax policy-making

The overall tax burden will need to fall as the basin matures

In setting fiscal policy the government will consider the wider economicbenefits of oil amp gas production in addition to revenues

A lsquofair returnrsquo will take account of the global competitiveness of commercial opportunities in the UK and UKCS commodity prices and costs

1

2

3

15

Leading on returns payback break-evens and value

UK performs favourablyIRR and reserves Payback periods Break-evens and value per bbl

Source OGAWood Mackenzie

Number of projects in each region Payback period years

UK post tax IRR is 13 higher than next highest basin

MER UK Forum and Task Forces the OGA and industry jointly committed to maintaining current cost disciplines

UKCS still has diverse portfolio of opportunities from large complex developments to small low cost tie-backs

Opportunities and dramatically lower unit costs mean UKCS boasts world-class payback periods

Recent investments in UK projects have delivered world-class returns in terms of breakeven and value per barrel

OGArsquos marginal discoveries initiative illustrates the continuing potential of the UK

Value per barrel (post tax) Breakevens

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 5: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

55

Introduction from the Chief ExecutiveThe Oil and Gas Authority (OGA) works alongside the UK oil and gas industry and government to maximise the economic recovery (MER UK) of the UKrsquos oil and gas resources and to fully support the energy transition

Much has been achieved over the past few years since the OGA was established The central production projection out to 2050 is now 39 billion barrels higher than it was in 2015 A mix of field life extensions infield reserve additions enhanced oil recovery new projects and discoveries have helped add this extra 45 to the original projection

Government forecasts show that oil and gas will remain an important part of our energy mix for the foreseeable future and maximising economic recovery from the UKCS is still vital to meet our energy demands and reduce reliance on hydrocarbon imports The OGA estimates there are potentially over 20 billion plus barrels of oil equivalent remaining in the UK Continental Shelf and decades of economic life

Very high on my priority list right now is working with government and oil and gas companies on the vital role this industry must play in the UKrsquos energy transition ndash both in driving to net zero carbon across the UKCS as quickly as possible and also progressing the opportunities that overall UK net zero presents We are very focused on vital solutions such as Carbon Capture and Storage (CCS) including re-using existing infrastructure The OGA is also leading a cross-regulator project studying opportunities for deeper offshore energy integration with renewables gas to wire hydrogen and offshore energy hubs

Key to achieving MER UK and central to the diversification to a lower carbon future is our world class supply chain This supply chain is also home to circa 80 of the jobs in our sector And now all new oil and gas projects (including decommissioning) require a SCAP (supply chain action plan) to be in place and approved by the OGA setting out the contracting strategy to ensure maximum value is generated from each project

Over the last few years we have worked with industry to better connect our supply chain within oil and gas whilst in parallel encouraging meaningful diversification into areas such as renewable energy and CCS In addition we have supported industry on the enormous export potential for this sector and for example in June 2019 helped organise the UKrsquos first ever Energy Exports Conference

Data and digitalisation will help unlock these and other opportunities We continue to maximise the value from the wealth of UKCS data making it openly and transparently available for all through our new National Data Repository and other digital platforms which are real game-changers

Our stewardship data provide evidence that industry is collaborating to sustain improvements Compared to 2014 costs are down production is up and the UKCS is globally competitive Decommissioning activity has progressed well with an impressive 17 reduction in the total estimated cost on a like-for-like basis on the 2017 inventory Operators are clearly thinking more strategically about technology uptake and there is evidence of more collaborative partnering with the supply chain and improvements in commercial behaviours more generally

Looking ahead industry must focus on establishing its role in the energy transition sustaining cost efficiencies and progressing efficient projects Achieve this and there is an exciting future ahead

Dr Andy Samuel Chief Executive

6

Current context Infrastructure

Exploration success rates Resources

10bn

Development Projects consented

54bn boein production or under development

NNS

WOS

CNS

SNSIS

wells drilled to date7800+

pipelines20000 kms+

fixed installations320+

subsea systems250+

Remaining potential 10bn - 20bn+

20bn+

2017 2018

Number of projects 7 20

CAPEX (pound billion) 07 39

Reserves (mmboe) 100 490

NPV10 (pound billion) 11 50

245839

1

Technical volume mmboe

Technical finding cost $boe

2014 2018

7

2008

20092010

2011

2012

2013

2014

2015

20162017

2018

Cost E

fficie

ncy a

nd O

pera

tiona

l

Effic

iency

Incr

easin

g

Cost Effic

iency and

Operational E

fficiency D

ecreasing

Improvem

ents in PE

but costs still rising

Annual average UOC and PEU

OC

(poundb

oe 2

018

pric

es)

21

19

17

15

13

11

9

7

5

PE

55 60 65 70 75 80

Production barrels of oil equivalent per day (boepd)

142 157 163 163

million million million million

2014 2015 2016 2017

Production efficiency (PE) and unit operating costs

Supply chain

pound27bnturnover

c40 through exports and supporting

c80 of UK oil and gas jobs

Source ndash Oil amp Gas UK and EY

40 80

2018

17million

280gt 280000 jobs in the UK delivered through or supported by upstream oil and gas activity

Jobs

Source ndash Oil amp Gas UK

8

Transition to net zeroMaximising economic recovery from the UKCS is vital to meet our energy demands reduce reliance on imports and support a supply chain which can diversify into other energy markets

UK oil demand and production

UK gas demand and production

1970 2035

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Oil Production

Oil Production (OGA March 2019Projection)

Actual Oil Demand (excluding marinebunkers)

Oil Demand (BEIS UEP 2018 ReferenceScenario)

1970 20350

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Gross Gas Production

Gross Gas Production (OGA March 2019Projection) Actual Gross Gas Demand

Gross Gas Demand (BEIS UEP 2018Reference Scenario)

Energy security

Diversification transition to net zero 2050

Strong supply chain

exporting globally

Anchor skills in UK

MER UK

2050

9

The big opportunity and energy integrationOil and gas continues to play key role in UK energy system

10

Regulatory frameworkLegislative Context

Supporting Obligations

Execution

Cost reduction

Guidance

SanctionNotices

Statutory non-statutory and Stewardship Expectations

Enforcementnotice

Financial penalty notice

Operator removal notice

Licence revocation notice

Central Obligation MER UK Strategy lsquoto take the steps necessary to secure that the maximum value of economically recoverable petroleum is recoveredrsquo Includes safeguards to protect and promote investment

Infrastructure Act 2015 Petroleum Act 1998Energy Acts 2011 and 2016

RegulatoryPowers

Facilitation Licensing regime Strategies and delivery programmes

MER UK plans

Regulatory powers

Non-binding dispute resolution

Information and samples Meetings Licence

model clausesThird party

access

Collaboration

Exploration Regional development

Asset stewardship Technology Decommissioning

Sanctions

Principal Objective The principal objective is that of lsquomaximising the economic recovery of UK petroleumrsquo

11

Exercise of the OGArsquos powersThe OGA uses lsquomeasured escalationrsquo to manage lsquoissuesrsquo where the OGA seeks primarily to influence the outcome and lsquocasesrsquo where the OGA will consider intervention with regulatory powers

Separately the OGA enforces licence obligations and deadlines to drive the pace of delivery and ensure that the right assets are in the right hands

Esca

latin

g le

vel o

f OG

A in

terv

entio

n

Operations Escalation Regulatory Escalation

Investigation5

Under these categories

Striking the right balance

RewardsSanctions Enforcement noticeFinancial penalty notice up to pound1mLicence revocation Operator removal

Greater value via collaborationTransparency and better data accessTimely effective decision making

MER UK benefits all

Asset Stewardship

Strategic use of data

Use

of P

ower

sOGA interventions

Area Plans

17 9 6 20 20

Further details on the measured escalation process can be found in the OGArsquos Enquiry Guidance

OGArsquos measured escalation process

45 Issues

33 Cases

Stage at which an issue or case issue closed

Enquiry

28Facilitation18 Enhanced

Facilitation

27

Access to infrastructure

Licence Commitments

Asset Transfers

Intra Inter JV

Area Solutions

Compliance

Closed interventions 2017 to present (Last update July 2019)

6

12

Changing commercial environment to deliver right assets right hands

UKCS commercial landscape

Contractor finance

Late life specialists

Innovative development

OGA

Assess financial capability

Understand technical capability

Review applicant capability to operate or credentials to be a non-op partner

Innovative deal structures helping new entrants

Majors consolidating and re-focusing eg West of Shetland

Innovative decommissioning agreements (eg seller retains liability) helping stimulate MampA

Late-life specialists bringing diversity

Chrysaor and Baker Hughes commercial partnership

Baker Hughes to fund a portion of CAPEX for a potential higher return

Risk and reward sharing drilling programme

Operator and service provider working together to realise value

BPEnQuest SVT and Magnus transactions

No cash upfront from EnQuest transaction funded by deferred consideration

Operator focused on bringing down costs and extend life

BP has stated this transaction highlights right assets right hands

Tolmount development

Antin Infrastructure Partners to part own platform and pipeline and pay for terminal upgrade

Development expected to produce 500bcf of gas with peak production of 300 mmscfd

First gas target Q4 2020 as per licence commitment

Case studies commercial modelsMampA and the regulatory process

Right assets right hands

BEIS

Manages Section 29 liability

Consultee in regulatory process for MampA activity

13

Ownership in transition

25000

Small Cap

Mid Cap

Large Cap Supermajor

Private Equity

Other

Utilities

35

Current production changed hands in past 5 years

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Average Daily Production

Operator shares of infrastructure based

on throughput

2014

2018

2018Production

2014Production

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Key

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

boed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Each pie chart represents a geographical area

14

Supplementary Charge reduced

from 32 to 10

Petroleum Revenue Tax permanently

reduced from 50 to 0

Basin-wide Investment Allowance

2 x pound20 million for new geophysical surveys in 2015 amp 2016 and pound5m for explorationdata in 2017

Transferable tax history gives buyers increased certainty

they can get tax relief for their

decommissioning costs

In line with the Driving Investment principles various measures introduced since 2015 include

Fiscal measuresThe three Driving Investment principles for tax policy-making

The overall tax burden will need to fall as the basin matures

In setting fiscal policy the government will consider the wider economicbenefits of oil amp gas production in addition to revenues

A lsquofair returnrsquo will take account of the global competitiveness of commercial opportunities in the UK and UKCS commodity prices and costs

1

2

3

15

Leading on returns payback break-evens and value

UK performs favourablyIRR and reserves Payback periods Break-evens and value per bbl

Source OGAWood Mackenzie

Number of projects in each region Payback period years

UK post tax IRR is 13 higher than next highest basin

MER UK Forum and Task Forces the OGA and industry jointly committed to maintaining current cost disciplines

UKCS still has diverse portfolio of opportunities from large complex developments to small low cost tie-backs

Opportunities and dramatically lower unit costs mean UKCS boasts world-class payback periods

Recent investments in UK projects have delivered world-class returns in terms of breakeven and value per barrel

OGArsquos marginal discoveries initiative illustrates the continuing potential of the UK

Value per barrel (post tax) Breakevens

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 6: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

6

Current context Infrastructure

Exploration success rates Resources

10bn

Development Projects consented

54bn boein production or under development

NNS

WOS

CNS

SNSIS

wells drilled to date7800+

pipelines20000 kms+

fixed installations320+

subsea systems250+

Remaining potential 10bn - 20bn+

20bn+

2017 2018

Number of projects 7 20

CAPEX (pound billion) 07 39

Reserves (mmboe) 100 490

NPV10 (pound billion) 11 50

245839

1

Technical volume mmboe

Technical finding cost $boe

2014 2018

7

2008

20092010

2011

2012

2013

2014

2015

20162017

2018

Cost E

fficie

ncy a

nd O

pera

tiona

l

Effic

iency

Incr

easin

g

Cost Effic

iency and

Operational E

fficiency D

ecreasing

Improvem

ents in PE

but costs still rising

Annual average UOC and PEU

OC

(poundb

oe 2

018

pric

es)

21

19

17

15

13

11

9

7

5

PE

55 60 65 70 75 80

Production barrels of oil equivalent per day (boepd)

142 157 163 163

million million million million

2014 2015 2016 2017

Production efficiency (PE) and unit operating costs

Supply chain

pound27bnturnover

c40 through exports and supporting

c80 of UK oil and gas jobs

Source ndash Oil amp Gas UK and EY

40 80

2018

17million

280gt 280000 jobs in the UK delivered through or supported by upstream oil and gas activity

Jobs

Source ndash Oil amp Gas UK

8

Transition to net zeroMaximising economic recovery from the UKCS is vital to meet our energy demands reduce reliance on imports and support a supply chain which can diversify into other energy markets

UK oil demand and production

UK gas demand and production

1970 2035

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Oil Production

Oil Production (OGA March 2019Projection)

Actual Oil Demand (excluding marinebunkers)

Oil Demand (BEIS UEP 2018 ReferenceScenario)

1970 20350

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Gross Gas Production

Gross Gas Production (OGA March 2019Projection) Actual Gross Gas Demand

Gross Gas Demand (BEIS UEP 2018Reference Scenario)

Energy security

Diversification transition to net zero 2050

Strong supply chain

exporting globally

Anchor skills in UK

MER UK

2050

9

The big opportunity and energy integrationOil and gas continues to play key role in UK energy system

10

Regulatory frameworkLegislative Context

Supporting Obligations

Execution

Cost reduction

Guidance

SanctionNotices

Statutory non-statutory and Stewardship Expectations

Enforcementnotice

Financial penalty notice

Operator removal notice

Licence revocation notice

Central Obligation MER UK Strategy lsquoto take the steps necessary to secure that the maximum value of economically recoverable petroleum is recoveredrsquo Includes safeguards to protect and promote investment

Infrastructure Act 2015 Petroleum Act 1998Energy Acts 2011 and 2016

RegulatoryPowers

Facilitation Licensing regime Strategies and delivery programmes

MER UK plans

Regulatory powers

Non-binding dispute resolution

Information and samples Meetings Licence

model clausesThird party

access

Collaboration

Exploration Regional development

Asset stewardship Technology Decommissioning

Sanctions

Principal Objective The principal objective is that of lsquomaximising the economic recovery of UK petroleumrsquo

11

Exercise of the OGArsquos powersThe OGA uses lsquomeasured escalationrsquo to manage lsquoissuesrsquo where the OGA seeks primarily to influence the outcome and lsquocasesrsquo where the OGA will consider intervention with regulatory powers

Separately the OGA enforces licence obligations and deadlines to drive the pace of delivery and ensure that the right assets are in the right hands

Esca

latin

g le

vel o

f OG

A in

terv

entio

n

Operations Escalation Regulatory Escalation

Investigation5

Under these categories

Striking the right balance

RewardsSanctions Enforcement noticeFinancial penalty notice up to pound1mLicence revocation Operator removal

Greater value via collaborationTransparency and better data accessTimely effective decision making

MER UK benefits all

Asset Stewardship

Strategic use of data

Use

of P

ower

sOGA interventions

Area Plans

17 9 6 20 20

Further details on the measured escalation process can be found in the OGArsquos Enquiry Guidance

OGArsquos measured escalation process

45 Issues

33 Cases

Stage at which an issue or case issue closed

Enquiry

28Facilitation18 Enhanced

Facilitation

27

Access to infrastructure

Licence Commitments

Asset Transfers

Intra Inter JV

Area Solutions

Compliance

Closed interventions 2017 to present (Last update July 2019)

6

12

Changing commercial environment to deliver right assets right hands

UKCS commercial landscape

Contractor finance

Late life specialists

Innovative development

OGA

Assess financial capability

Understand technical capability

Review applicant capability to operate or credentials to be a non-op partner

Innovative deal structures helping new entrants

Majors consolidating and re-focusing eg West of Shetland

Innovative decommissioning agreements (eg seller retains liability) helping stimulate MampA

Late-life specialists bringing diversity

Chrysaor and Baker Hughes commercial partnership

Baker Hughes to fund a portion of CAPEX for a potential higher return

Risk and reward sharing drilling programme

Operator and service provider working together to realise value

BPEnQuest SVT and Magnus transactions

No cash upfront from EnQuest transaction funded by deferred consideration

Operator focused on bringing down costs and extend life

BP has stated this transaction highlights right assets right hands

Tolmount development

Antin Infrastructure Partners to part own platform and pipeline and pay for terminal upgrade

Development expected to produce 500bcf of gas with peak production of 300 mmscfd

First gas target Q4 2020 as per licence commitment

Case studies commercial modelsMampA and the regulatory process

Right assets right hands

BEIS

Manages Section 29 liability

Consultee in regulatory process for MampA activity

13

Ownership in transition

25000

Small Cap

Mid Cap

Large Cap Supermajor

Private Equity

Other

Utilities

35

Current production changed hands in past 5 years

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Average Daily Production

Operator shares of infrastructure based

on throughput

2014

2018

2018Production

2014Production

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Key

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

boed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Each pie chart represents a geographical area

14

Supplementary Charge reduced

from 32 to 10

Petroleum Revenue Tax permanently

reduced from 50 to 0

Basin-wide Investment Allowance

2 x pound20 million for new geophysical surveys in 2015 amp 2016 and pound5m for explorationdata in 2017

Transferable tax history gives buyers increased certainty

they can get tax relief for their

decommissioning costs

In line with the Driving Investment principles various measures introduced since 2015 include

Fiscal measuresThe three Driving Investment principles for tax policy-making

The overall tax burden will need to fall as the basin matures

In setting fiscal policy the government will consider the wider economicbenefits of oil amp gas production in addition to revenues

A lsquofair returnrsquo will take account of the global competitiveness of commercial opportunities in the UK and UKCS commodity prices and costs

1

2

3

15

Leading on returns payback break-evens and value

UK performs favourablyIRR and reserves Payback periods Break-evens and value per bbl

Source OGAWood Mackenzie

Number of projects in each region Payback period years

UK post tax IRR is 13 higher than next highest basin

MER UK Forum and Task Forces the OGA and industry jointly committed to maintaining current cost disciplines

UKCS still has diverse portfolio of opportunities from large complex developments to small low cost tie-backs

Opportunities and dramatically lower unit costs mean UKCS boasts world-class payback periods

Recent investments in UK projects have delivered world-class returns in terms of breakeven and value per barrel

OGArsquos marginal discoveries initiative illustrates the continuing potential of the UK

Value per barrel (post tax) Breakevens

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 7: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

7

2008

20092010

2011

2012

2013

2014

2015

20162017

2018

Cost E

fficie

ncy a

nd O

pera

tiona

l

Effic

iency

Incr

easin

g

Cost Effic

iency and

Operational E

fficiency D

ecreasing

Improvem

ents in PE

but costs still rising

Annual average UOC and PEU

OC

(poundb

oe 2

018

pric

es)

21

19

17

15

13

11

9

7

5

PE

55 60 65 70 75 80

Production barrels of oil equivalent per day (boepd)

142 157 163 163

million million million million

2014 2015 2016 2017

Production efficiency (PE) and unit operating costs

Supply chain

pound27bnturnover

c40 through exports and supporting

c80 of UK oil and gas jobs

Source ndash Oil amp Gas UK and EY

40 80

2018

17million

280gt 280000 jobs in the UK delivered through or supported by upstream oil and gas activity

Jobs

Source ndash Oil amp Gas UK

8

Transition to net zeroMaximising economic recovery from the UKCS is vital to meet our energy demands reduce reliance on imports and support a supply chain which can diversify into other energy markets

UK oil demand and production

UK gas demand and production

1970 2035

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Oil Production

Oil Production (OGA March 2019Projection)

Actual Oil Demand (excluding marinebunkers)

Oil Demand (BEIS UEP 2018 ReferenceScenario)

1970 20350

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Gross Gas Production

Gross Gas Production (OGA March 2019Projection) Actual Gross Gas Demand

Gross Gas Demand (BEIS UEP 2018Reference Scenario)

Energy security

Diversification transition to net zero 2050

Strong supply chain

exporting globally

Anchor skills in UK

MER UK

2050

9

The big opportunity and energy integrationOil and gas continues to play key role in UK energy system

10

Regulatory frameworkLegislative Context

Supporting Obligations

Execution

Cost reduction

Guidance

SanctionNotices

Statutory non-statutory and Stewardship Expectations

Enforcementnotice

Financial penalty notice

Operator removal notice

Licence revocation notice

Central Obligation MER UK Strategy lsquoto take the steps necessary to secure that the maximum value of economically recoverable petroleum is recoveredrsquo Includes safeguards to protect and promote investment

Infrastructure Act 2015 Petroleum Act 1998Energy Acts 2011 and 2016

RegulatoryPowers

Facilitation Licensing regime Strategies and delivery programmes

MER UK plans

Regulatory powers

Non-binding dispute resolution

Information and samples Meetings Licence

model clausesThird party

access

Collaboration

Exploration Regional development

Asset stewardship Technology Decommissioning

Sanctions

Principal Objective The principal objective is that of lsquomaximising the economic recovery of UK petroleumrsquo

11

Exercise of the OGArsquos powersThe OGA uses lsquomeasured escalationrsquo to manage lsquoissuesrsquo where the OGA seeks primarily to influence the outcome and lsquocasesrsquo where the OGA will consider intervention with regulatory powers

Separately the OGA enforces licence obligations and deadlines to drive the pace of delivery and ensure that the right assets are in the right hands

Esca

latin

g le

vel o

f OG

A in

terv

entio

n

Operations Escalation Regulatory Escalation

Investigation5

Under these categories

Striking the right balance

RewardsSanctions Enforcement noticeFinancial penalty notice up to pound1mLicence revocation Operator removal

Greater value via collaborationTransparency and better data accessTimely effective decision making

MER UK benefits all

Asset Stewardship

Strategic use of data

Use

of P

ower

sOGA interventions

Area Plans

17 9 6 20 20

Further details on the measured escalation process can be found in the OGArsquos Enquiry Guidance

OGArsquos measured escalation process

45 Issues

33 Cases

Stage at which an issue or case issue closed

Enquiry

28Facilitation18 Enhanced

Facilitation

27

Access to infrastructure

Licence Commitments

Asset Transfers

Intra Inter JV

Area Solutions

Compliance

Closed interventions 2017 to present (Last update July 2019)

6

12

Changing commercial environment to deliver right assets right hands

UKCS commercial landscape

Contractor finance

Late life specialists

Innovative development

OGA

Assess financial capability

Understand technical capability

Review applicant capability to operate or credentials to be a non-op partner

Innovative deal structures helping new entrants

Majors consolidating and re-focusing eg West of Shetland

Innovative decommissioning agreements (eg seller retains liability) helping stimulate MampA

Late-life specialists bringing diversity

Chrysaor and Baker Hughes commercial partnership

Baker Hughes to fund a portion of CAPEX for a potential higher return

Risk and reward sharing drilling programme

Operator and service provider working together to realise value

BPEnQuest SVT and Magnus transactions

No cash upfront from EnQuest transaction funded by deferred consideration

Operator focused on bringing down costs and extend life

BP has stated this transaction highlights right assets right hands

Tolmount development

Antin Infrastructure Partners to part own platform and pipeline and pay for terminal upgrade

Development expected to produce 500bcf of gas with peak production of 300 mmscfd

First gas target Q4 2020 as per licence commitment

Case studies commercial modelsMampA and the regulatory process

Right assets right hands

BEIS

Manages Section 29 liability

Consultee in regulatory process for MampA activity

13

Ownership in transition

25000

Small Cap

Mid Cap

Large Cap Supermajor

Private Equity

Other

Utilities

35

Current production changed hands in past 5 years

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Average Daily Production

Operator shares of infrastructure based

on throughput

2014

2018

2018Production

2014Production

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Key

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

boed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Each pie chart represents a geographical area

14

Supplementary Charge reduced

from 32 to 10

Petroleum Revenue Tax permanently

reduced from 50 to 0

Basin-wide Investment Allowance

2 x pound20 million for new geophysical surveys in 2015 amp 2016 and pound5m for explorationdata in 2017

Transferable tax history gives buyers increased certainty

they can get tax relief for their

decommissioning costs

In line with the Driving Investment principles various measures introduced since 2015 include

Fiscal measuresThe three Driving Investment principles for tax policy-making

The overall tax burden will need to fall as the basin matures

In setting fiscal policy the government will consider the wider economicbenefits of oil amp gas production in addition to revenues

A lsquofair returnrsquo will take account of the global competitiveness of commercial opportunities in the UK and UKCS commodity prices and costs

1

2

3

15

Leading on returns payback break-evens and value

UK performs favourablyIRR and reserves Payback periods Break-evens and value per bbl

Source OGAWood Mackenzie

Number of projects in each region Payback period years

UK post tax IRR is 13 higher than next highest basin

MER UK Forum and Task Forces the OGA and industry jointly committed to maintaining current cost disciplines

UKCS still has diverse portfolio of opportunities from large complex developments to small low cost tie-backs

Opportunities and dramatically lower unit costs mean UKCS boasts world-class payback periods

Recent investments in UK projects have delivered world-class returns in terms of breakeven and value per barrel

OGArsquos marginal discoveries initiative illustrates the continuing potential of the UK

Value per barrel (post tax) Breakevens

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 8: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

8

Transition to net zeroMaximising economic recovery from the UKCS is vital to meet our energy demands reduce reliance on imports and support a supply chain which can diversify into other energy markets

UK oil demand and production

UK gas demand and production

1970 2035

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Oil Production

Oil Production (OGA March 2019Projection)

Actual Oil Demand (excluding marinebunkers)

Oil Demand (BEIS UEP 2018 ReferenceScenario)

1970 20350

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

mill

ion

tonn

es o

f oil

equi

vale

nt

Actual Gross Gas Production

Gross Gas Production (OGA March 2019Projection) Actual Gross Gas Demand

Gross Gas Demand (BEIS UEP 2018Reference Scenario)

Energy security

Diversification transition to net zero 2050

Strong supply chain

exporting globally

Anchor skills in UK

MER UK

2050

9

The big opportunity and energy integrationOil and gas continues to play key role in UK energy system

10

Regulatory frameworkLegislative Context

Supporting Obligations

Execution

Cost reduction

Guidance

SanctionNotices

Statutory non-statutory and Stewardship Expectations

Enforcementnotice

Financial penalty notice

Operator removal notice

Licence revocation notice

Central Obligation MER UK Strategy lsquoto take the steps necessary to secure that the maximum value of economically recoverable petroleum is recoveredrsquo Includes safeguards to protect and promote investment

Infrastructure Act 2015 Petroleum Act 1998Energy Acts 2011 and 2016

RegulatoryPowers

Facilitation Licensing regime Strategies and delivery programmes

MER UK plans

Regulatory powers

Non-binding dispute resolution

Information and samples Meetings Licence

model clausesThird party

access

Collaboration

Exploration Regional development

Asset stewardship Technology Decommissioning

Sanctions

Principal Objective The principal objective is that of lsquomaximising the economic recovery of UK petroleumrsquo

11

Exercise of the OGArsquos powersThe OGA uses lsquomeasured escalationrsquo to manage lsquoissuesrsquo where the OGA seeks primarily to influence the outcome and lsquocasesrsquo where the OGA will consider intervention with regulatory powers

Separately the OGA enforces licence obligations and deadlines to drive the pace of delivery and ensure that the right assets are in the right hands

Esca

latin

g le

vel o

f OG

A in

terv

entio

n

Operations Escalation Regulatory Escalation

Investigation5

Under these categories

Striking the right balance

RewardsSanctions Enforcement noticeFinancial penalty notice up to pound1mLicence revocation Operator removal

Greater value via collaborationTransparency and better data accessTimely effective decision making

MER UK benefits all

Asset Stewardship

Strategic use of data

Use

of P

ower

sOGA interventions

Area Plans

17 9 6 20 20

Further details on the measured escalation process can be found in the OGArsquos Enquiry Guidance

OGArsquos measured escalation process

45 Issues

33 Cases

Stage at which an issue or case issue closed

Enquiry

28Facilitation18 Enhanced

Facilitation

27

Access to infrastructure

Licence Commitments

Asset Transfers

Intra Inter JV

Area Solutions

Compliance

Closed interventions 2017 to present (Last update July 2019)

6

12

Changing commercial environment to deliver right assets right hands

UKCS commercial landscape

Contractor finance

Late life specialists

Innovative development

OGA

Assess financial capability

Understand technical capability

Review applicant capability to operate or credentials to be a non-op partner

Innovative deal structures helping new entrants

Majors consolidating and re-focusing eg West of Shetland

Innovative decommissioning agreements (eg seller retains liability) helping stimulate MampA

Late-life specialists bringing diversity

Chrysaor and Baker Hughes commercial partnership

Baker Hughes to fund a portion of CAPEX for a potential higher return

Risk and reward sharing drilling programme

Operator and service provider working together to realise value

BPEnQuest SVT and Magnus transactions

No cash upfront from EnQuest transaction funded by deferred consideration

Operator focused on bringing down costs and extend life

BP has stated this transaction highlights right assets right hands

Tolmount development

Antin Infrastructure Partners to part own platform and pipeline and pay for terminal upgrade

Development expected to produce 500bcf of gas with peak production of 300 mmscfd

First gas target Q4 2020 as per licence commitment

Case studies commercial modelsMampA and the regulatory process

Right assets right hands

BEIS

Manages Section 29 liability

Consultee in regulatory process for MampA activity

13

Ownership in transition

25000

Small Cap

Mid Cap

Large Cap Supermajor

Private Equity

Other

Utilities

35

Current production changed hands in past 5 years

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Average Daily Production

Operator shares of infrastructure based

on throughput

2014

2018

2018Production

2014Production

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Key

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

boed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Each pie chart represents a geographical area

14

Supplementary Charge reduced

from 32 to 10

Petroleum Revenue Tax permanently

reduced from 50 to 0

Basin-wide Investment Allowance

2 x pound20 million for new geophysical surveys in 2015 amp 2016 and pound5m for explorationdata in 2017

Transferable tax history gives buyers increased certainty

they can get tax relief for their

decommissioning costs

In line with the Driving Investment principles various measures introduced since 2015 include

Fiscal measuresThe three Driving Investment principles for tax policy-making

The overall tax burden will need to fall as the basin matures

In setting fiscal policy the government will consider the wider economicbenefits of oil amp gas production in addition to revenues

A lsquofair returnrsquo will take account of the global competitiveness of commercial opportunities in the UK and UKCS commodity prices and costs

1

2

3

15

Leading on returns payback break-evens and value

UK performs favourablyIRR and reserves Payback periods Break-evens and value per bbl

Source OGAWood Mackenzie

Number of projects in each region Payback period years

UK post tax IRR is 13 higher than next highest basin

MER UK Forum and Task Forces the OGA and industry jointly committed to maintaining current cost disciplines

UKCS still has diverse portfolio of opportunities from large complex developments to small low cost tie-backs

Opportunities and dramatically lower unit costs mean UKCS boasts world-class payback periods

Recent investments in UK projects have delivered world-class returns in terms of breakeven and value per barrel

OGArsquos marginal discoveries initiative illustrates the continuing potential of the UK

Value per barrel (post tax) Breakevens

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 9: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

9

The big opportunity and energy integrationOil and gas continues to play key role in UK energy system

10

Regulatory frameworkLegislative Context

Supporting Obligations

Execution

Cost reduction

Guidance

SanctionNotices

Statutory non-statutory and Stewardship Expectations

Enforcementnotice

Financial penalty notice

Operator removal notice

Licence revocation notice

Central Obligation MER UK Strategy lsquoto take the steps necessary to secure that the maximum value of economically recoverable petroleum is recoveredrsquo Includes safeguards to protect and promote investment

Infrastructure Act 2015 Petroleum Act 1998Energy Acts 2011 and 2016

RegulatoryPowers

Facilitation Licensing regime Strategies and delivery programmes

MER UK plans

Regulatory powers

Non-binding dispute resolution

Information and samples Meetings Licence

model clausesThird party

access

Collaboration

Exploration Regional development

Asset stewardship Technology Decommissioning

Sanctions

Principal Objective The principal objective is that of lsquomaximising the economic recovery of UK petroleumrsquo

11

Exercise of the OGArsquos powersThe OGA uses lsquomeasured escalationrsquo to manage lsquoissuesrsquo where the OGA seeks primarily to influence the outcome and lsquocasesrsquo where the OGA will consider intervention with regulatory powers

Separately the OGA enforces licence obligations and deadlines to drive the pace of delivery and ensure that the right assets are in the right hands

Esca

latin

g le

vel o

f OG

A in

terv

entio

n

Operations Escalation Regulatory Escalation

Investigation5

Under these categories

Striking the right balance

RewardsSanctions Enforcement noticeFinancial penalty notice up to pound1mLicence revocation Operator removal

Greater value via collaborationTransparency and better data accessTimely effective decision making

MER UK benefits all

Asset Stewardship

Strategic use of data

Use

of P

ower

sOGA interventions

Area Plans

17 9 6 20 20

Further details on the measured escalation process can be found in the OGArsquos Enquiry Guidance

OGArsquos measured escalation process

45 Issues

33 Cases

Stage at which an issue or case issue closed

Enquiry

28Facilitation18 Enhanced

Facilitation

27

Access to infrastructure

Licence Commitments

Asset Transfers

Intra Inter JV

Area Solutions

Compliance

Closed interventions 2017 to present (Last update July 2019)

6

12

Changing commercial environment to deliver right assets right hands

UKCS commercial landscape

Contractor finance

Late life specialists

Innovative development

OGA

Assess financial capability

Understand technical capability

Review applicant capability to operate or credentials to be a non-op partner

Innovative deal structures helping new entrants

Majors consolidating and re-focusing eg West of Shetland

Innovative decommissioning agreements (eg seller retains liability) helping stimulate MampA

Late-life specialists bringing diversity

Chrysaor and Baker Hughes commercial partnership

Baker Hughes to fund a portion of CAPEX for a potential higher return

Risk and reward sharing drilling programme

Operator and service provider working together to realise value

BPEnQuest SVT and Magnus transactions

No cash upfront from EnQuest transaction funded by deferred consideration

Operator focused on bringing down costs and extend life

BP has stated this transaction highlights right assets right hands

Tolmount development

Antin Infrastructure Partners to part own platform and pipeline and pay for terminal upgrade

Development expected to produce 500bcf of gas with peak production of 300 mmscfd

First gas target Q4 2020 as per licence commitment

Case studies commercial modelsMampA and the regulatory process

Right assets right hands

BEIS

Manages Section 29 liability

Consultee in regulatory process for MampA activity

13

Ownership in transition

25000

Small Cap

Mid Cap

Large Cap Supermajor

Private Equity

Other

Utilities

35

Current production changed hands in past 5 years

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Average Daily Production

Operator shares of infrastructure based

on throughput

2014

2018

2018Production

2014Production

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Key

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

boed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Each pie chart represents a geographical area

14

Supplementary Charge reduced

from 32 to 10

Petroleum Revenue Tax permanently

reduced from 50 to 0

Basin-wide Investment Allowance

2 x pound20 million for new geophysical surveys in 2015 amp 2016 and pound5m for explorationdata in 2017

Transferable tax history gives buyers increased certainty

they can get tax relief for their

decommissioning costs

In line with the Driving Investment principles various measures introduced since 2015 include

Fiscal measuresThe three Driving Investment principles for tax policy-making

The overall tax burden will need to fall as the basin matures

In setting fiscal policy the government will consider the wider economicbenefits of oil amp gas production in addition to revenues

A lsquofair returnrsquo will take account of the global competitiveness of commercial opportunities in the UK and UKCS commodity prices and costs

1

2

3

15

Leading on returns payback break-evens and value

UK performs favourablyIRR and reserves Payback periods Break-evens and value per bbl

Source OGAWood Mackenzie

Number of projects in each region Payback period years

UK post tax IRR is 13 higher than next highest basin

MER UK Forum and Task Forces the OGA and industry jointly committed to maintaining current cost disciplines

UKCS still has diverse portfolio of opportunities from large complex developments to small low cost tie-backs

Opportunities and dramatically lower unit costs mean UKCS boasts world-class payback periods

Recent investments in UK projects have delivered world-class returns in terms of breakeven and value per barrel

OGArsquos marginal discoveries initiative illustrates the continuing potential of the UK

Value per barrel (post tax) Breakevens

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 10: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

10

Regulatory frameworkLegislative Context

Supporting Obligations

Execution

Cost reduction

Guidance

SanctionNotices

Statutory non-statutory and Stewardship Expectations

Enforcementnotice

Financial penalty notice

Operator removal notice

Licence revocation notice

Central Obligation MER UK Strategy lsquoto take the steps necessary to secure that the maximum value of economically recoverable petroleum is recoveredrsquo Includes safeguards to protect and promote investment

Infrastructure Act 2015 Petroleum Act 1998Energy Acts 2011 and 2016

RegulatoryPowers

Facilitation Licensing regime Strategies and delivery programmes

MER UK plans

Regulatory powers

Non-binding dispute resolution

Information and samples Meetings Licence

model clausesThird party

access

Collaboration

Exploration Regional development

Asset stewardship Technology Decommissioning

Sanctions

Principal Objective The principal objective is that of lsquomaximising the economic recovery of UK petroleumrsquo

11

Exercise of the OGArsquos powersThe OGA uses lsquomeasured escalationrsquo to manage lsquoissuesrsquo where the OGA seeks primarily to influence the outcome and lsquocasesrsquo where the OGA will consider intervention with regulatory powers

Separately the OGA enforces licence obligations and deadlines to drive the pace of delivery and ensure that the right assets are in the right hands

Esca

latin

g le

vel o

f OG

A in

terv

entio

n

Operations Escalation Regulatory Escalation

Investigation5

Under these categories

Striking the right balance

RewardsSanctions Enforcement noticeFinancial penalty notice up to pound1mLicence revocation Operator removal

Greater value via collaborationTransparency and better data accessTimely effective decision making

MER UK benefits all

Asset Stewardship

Strategic use of data

Use

of P

ower

sOGA interventions

Area Plans

17 9 6 20 20

Further details on the measured escalation process can be found in the OGArsquos Enquiry Guidance

OGArsquos measured escalation process

45 Issues

33 Cases

Stage at which an issue or case issue closed

Enquiry

28Facilitation18 Enhanced

Facilitation

27

Access to infrastructure

Licence Commitments

Asset Transfers

Intra Inter JV

Area Solutions

Compliance

Closed interventions 2017 to present (Last update July 2019)

6

12

Changing commercial environment to deliver right assets right hands

UKCS commercial landscape

Contractor finance

Late life specialists

Innovative development

OGA

Assess financial capability

Understand technical capability

Review applicant capability to operate or credentials to be a non-op partner

Innovative deal structures helping new entrants

Majors consolidating and re-focusing eg West of Shetland

Innovative decommissioning agreements (eg seller retains liability) helping stimulate MampA

Late-life specialists bringing diversity

Chrysaor and Baker Hughes commercial partnership

Baker Hughes to fund a portion of CAPEX for a potential higher return

Risk and reward sharing drilling programme

Operator and service provider working together to realise value

BPEnQuest SVT and Magnus transactions

No cash upfront from EnQuest transaction funded by deferred consideration

Operator focused on bringing down costs and extend life

BP has stated this transaction highlights right assets right hands

Tolmount development

Antin Infrastructure Partners to part own platform and pipeline and pay for terminal upgrade

Development expected to produce 500bcf of gas with peak production of 300 mmscfd

First gas target Q4 2020 as per licence commitment

Case studies commercial modelsMampA and the regulatory process

Right assets right hands

BEIS

Manages Section 29 liability

Consultee in regulatory process for MampA activity

13

Ownership in transition

25000

Small Cap

Mid Cap

Large Cap Supermajor

Private Equity

Other

Utilities

35

Current production changed hands in past 5 years

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Average Daily Production

Operator shares of infrastructure based

on throughput

2014

2018

2018Production

2014Production

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Key

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

boed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Each pie chart represents a geographical area

14

Supplementary Charge reduced

from 32 to 10

Petroleum Revenue Tax permanently

reduced from 50 to 0

Basin-wide Investment Allowance

2 x pound20 million for new geophysical surveys in 2015 amp 2016 and pound5m for explorationdata in 2017

Transferable tax history gives buyers increased certainty

they can get tax relief for their

decommissioning costs

In line with the Driving Investment principles various measures introduced since 2015 include

Fiscal measuresThe three Driving Investment principles for tax policy-making

The overall tax burden will need to fall as the basin matures

In setting fiscal policy the government will consider the wider economicbenefits of oil amp gas production in addition to revenues

A lsquofair returnrsquo will take account of the global competitiveness of commercial opportunities in the UK and UKCS commodity prices and costs

1

2

3

15

Leading on returns payback break-evens and value

UK performs favourablyIRR and reserves Payback periods Break-evens and value per bbl

Source OGAWood Mackenzie

Number of projects in each region Payback period years

UK post tax IRR is 13 higher than next highest basin

MER UK Forum and Task Forces the OGA and industry jointly committed to maintaining current cost disciplines

UKCS still has diverse portfolio of opportunities from large complex developments to small low cost tie-backs

Opportunities and dramatically lower unit costs mean UKCS boasts world-class payback periods

Recent investments in UK projects have delivered world-class returns in terms of breakeven and value per barrel

OGArsquos marginal discoveries initiative illustrates the continuing potential of the UK

Value per barrel (post tax) Breakevens

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 11: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

11

Exercise of the OGArsquos powersThe OGA uses lsquomeasured escalationrsquo to manage lsquoissuesrsquo where the OGA seeks primarily to influence the outcome and lsquocasesrsquo where the OGA will consider intervention with regulatory powers

Separately the OGA enforces licence obligations and deadlines to drive the pace of delivery and ensure that the right assets are in the right hands

Esca

latin

g le

vel o

f OG

A in

terv

entio

n

Operations Escalation Regulatory Escalation

Investigation5

Under these categories

Striking the right balance

RewardsSanctions Enforcement noticeFinancial penalty notice up to pound1mLicence revocation Operator removal

Greater value via collaborationTransparency and better data accessTimely effective decision making

MER UK benefits all

Asset Stewardship

Strategic use of data

Use

of P

ower

sOGA interventions

Area Plans

17 9 6 20 20

Further details on the measured escalation process can be found in the OGArsquos Enquiry Guidance

OGArsquos measured escalation process

45 Issues

33 Cases

Stage at which an issue or case issue closed

Enquiry

28Facilitation18 Enhanced

Facilitation

27

Access to infrastructure

Licence Commitments

Asset Transfers

Intra Inter JV

Area Solutions

Compliance

Closed interventions 2017 to present (Last update July 2019)

6

12

Changing commercial environment to deliver right assets right hands

UKCS commercial landscape

Contractor finance

Late life specialists

Innovative development

OGA

Assess financial capability

Understand technical capability

Review applicant capability to operate or credentials to be a non-op partner

Innovative deal structures helping new entrants

Majors consolidating and re-focusing eg West of Shetland

Innovative decommissioning agreements (eg seller retains liability) helping stimulate MampA

Late-life specialists bringing diversity

Chrysaor and Baker Hughes commercial partnership

Baker Hughes to fund a portion of CAPEX for a potential higher return

Risk and reward sharing drilling programme

Operator and service provider working together to realise value

BPEnQuest SVT and Magnus transactions

No cash upfront from EnQuest transaction funded by deferred consideration

Operator focused on bringing down costs and extend life

BP has stated this transaction highlights right assets right hands

Tolmount development

Antin Infrastructure Partners to part own platform and pipeline and pay for terminal upgrade

Development expected to produce 500bcf of gas with peak production of 300 mmscfd

First gas target Q4 2020 as per licence commitment

Case studies commercial modelsMampA and the regulatory process

Right assets right hands

BEIS

Manages Section 29 liability

Consultee in regulatory process for MampA activity

13

Ownership in transition

25000

Small Cap

Mid Cap

Large Cap Supermajor

Private Equity

Other

Utilities

35

Current production changed hands in past 5 years

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Average Daily Production

Operator shares of infrastructure based

on throughput

2014

2018

2018Production

2014Production

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Key

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

boed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Each pie chart represents a geographical area

14

Supplementary Charge reduced

from 32 to 10

Petroleum Revenue Tax permanently

reduced from 50 to 0

Basin-wide Investment Allowance

2 x pound20 million for new geophysical surveys in 2015 amp 2016 and pound5m for explorationdata in 2017

Transferable tax history gives buyers increased certainty

they can get tax relief for their

decommissioning costs

In line with the Driving Investment principles various measures introduced since 2015 include

Fiscal measuresThe three Driving Investment principles for tax policy-making

The overall tax burden will need to fall as the basin matures

In setting fiscal policy the government will consider the wider economicbenefits of oil amp gas production in addition to revenues

A lsquofair returnrsquo will take account of the global competitiveness of commercial opportunities in the UK and UKCS commodity prices and costs

1

2

3

15

Leading on returns payback break-evens and value

UK performs favourablyIRR and reserves Payback periods Break-evens and value per bbl

Source OGAWood Mackenzie

Number of projects in each region Payback period years

UK post tax IRR is 13 higher than next highest basin

MER UK Forum and Task Forces the OGA and industry jointly committed to maintaining current cost disciplines

UKCS still has diverse portfolio of opportunities from large complex developments to small low cost tie-backs

Opportunities and dramatically lower unit costs mean UKCS boasts world-class payback periods

Recent investments in UK projects have delivered world-class returns in terms of breakeven and value per barrel

OGArsquos marginal discoveries initiative illustrates the continuing potential of the UK

Value per barrel (post tax) Breakevens

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 12: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

12

Changing commercial environment to deliver right assets right hands

UKCS commercial landscape

Contractor finance

Late life specialists

Innovative development

OGA

Assess financial capability

Understand technical capability

Review applicant capability to operate or credentials to be a non-op partner

Innovative deal structures helping new entrants

Majors consolidating and re-focusing eg West of Shetland

Innovative decommissioning agreements (eg seller retains liability) helping stimulate MampA

Late-life specialists bringing diversity

Chrysaor and Baker Hughes commercial partnership

Baker Hughes to fund a portion of CAPEX for a potential higher return

Risk and reward sharing drilling programme

Operator and service provider working together to realise value

BPEnQuest SVT and Magnus transactions

No cash upfront from EnQuest transaction funded by deferred consideration

Operator focused on bringing down costs and extend life

BP has stated this transaction highlights right assets right hands

Tolmount development

Antin Infrastructure Partners to part own platform and pipeline and pay for terminal upgrade

Development expected to produce 500bcf of gas with peak production of 300 mmscfd

First gas target Q4 2020 as per licence commitment

Case studies commercial modelsMampA and the regulatory process

Right assets right hands

BEIS

Manages Section 29 liability

Consultee in regulatory process for MampA activity

13

Ownership in transition

25000

Small Cap

Mid Cap

Large Cap Supermajor

Private Equity

Other

Utilities

35

Current production changed hands in past 5 years

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Average Daily Production

Operator shares of infrastructure based

on throughput

2014

2018

2018Production

2014Production

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Key

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

boed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Each pie chart represents a geographical area

14

Supplementary Charge reduced

from 32 to 10

Petroleum Revenue Tax permanently

reduced from 50 to 0

Basin-wide Investment Allowance

2 x pound20 million for new geophysical surveys in 2015 amp 2016 and pound5m for explorationdata in 2017

Transferable tax history gives buyers increased certainty

they can get tax relief for their

decommissioning costs

In line with the Driving Investment principles various measures introduced since 2015 include

Fiscal measuresThe three Driving Investment principles for tax policy-making

The overall tax burden will need to fall as the basin matures

In setting fiscal policy the government will consider the wider economicbenefits of oil amp gas production in addition to revenues

A lsquofair returnrsquo will take account of the global competitiveness of commercial opportunities in the UK and UKCS commodity prices and costs

1

2

3

15

Leading on returns payback break-evens and value

UK performs favourablyIRR and reserves Payback periods Break-evens and value per bbl

Source OGAWood Mackenzie

Number of projects in each region Payback period years

UK post tax IRR is 13 higher than next highest basin

MER UK Forum and Task Forces the OGA and industry jointly committed to maintaining current cost disciplines

UKCS still has diverse portfolio of opportunities from large complex developments to small low cost tie-backs

Opportunities and dramatically lower unit costs mean UKCS boasts world-class payback periods

Recent investments in UK projects have delivered world-class returns in terms of breakeven and value per barrel

OGArsquos marginal discoveries initiative illustrates the continuing potential of the UK

Value per barrel (post tax) Breakevens

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 13: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

13

Ownership in transition

25000

Small Cap

Mid Cap

Large Cap Supermajor

Private Equity

Other

Utilities

35

Current production changed hands in past 5 years

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Average Daily Production

Operator shares of infrastructure based

on throughput

2014

2018

2018Production

2014Production

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Key

25 thousandboed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

boed

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Small cap

Mid cap

Large capSupermajor

Private equityInfrastructure funds

Other

Utilities

Each pie chart represents a geographical area

14

Supplementary Charge reduced

from 32 to 10

Petroleum Revenue Tax permanently

reduced from 50 to 0

Basin-wide Investment Allowance

2 x pound20 million for new geophysical surveys in 2015 amp 2016 and pound5m for explorationdata in 2017

Transferable tax history gives buyers increased certainty

they can get tax relief for their

decommissioning costs

In line with the Driving Investment principles various measures introduced since 2015 include

Fiscal measuresThe three Driving Investment principles for tax policy-making

The overall tax burden will need to fall as the basin matures

In setting fiscal policy the government will consider the wider economicbenefits of oil amp gas production in addition to revenues

A lsquofair returnrsquo will take account of the global competitiveness of commercial opportunities in the UK and UKCS commodity prices and costs

1

2

3

15

Leading on returns payback break-evens and value

UK performs favourablyIRR and reserves Payback periods Break-evens and value per bbl

Source OGAWood Mackenzie

Number of projects in each region Payback period years

UK post tax IRR is 13 higher than next highest basin

MER UK Forum and Task Forces the OGA and industry jointly committed to maintaining current cost disciplines

UKCS still has diverse portfolio of opportunities from large complex developments to small low cost tie-backs

Opportunities and dramatically lower unit costs mean UKCS boasts world-class payback periods

Recent investments in UK projects have delivered world-class returns in terms of breakeven and value per barrel

OGArsquos marginal discoveries initiative illustrates the continuing potential of the UK

Value per barrel (post tax) Breakevens

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 14: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

14

Supplementary Charge reduced

from 32 to 10

Petroleum Revenue Tax permanently

reduced from 50 to 0

Basin-wide Investment Allowance

2 x pound20 million for new geophysical surveys in 2015 amp 2016 and pound5m for explorationdata in 2017

Transferable tax history gives buyers increased certainty

they can get tax relief for their

decommissioning costs

In line with the Driving Investment principles various measures introduced since 2015 include

Fiscal measuresThe three Driving Investment principles for tax policy-making

The overall tax burden will need to fall as the basin matures

In setting fiscal policy the government will consider the wider economicbenefits of oil amp gas production in addition to revenues

A lsquofair returnrsquo will take account of the global competitiveness of commercial opportunities in the UK and UKCS commodity prices and costs

1

2

3

15

Leading on returns payback break-evens and value

UK performs favourablyIRR and reserves Payback periods Break-evens and value per bbl

Source OGAWood Mackenzie

Number of projects in each region Payback period years

UK post tax IRR is 13 higher than next highest basin

MER UK Forum and Task Forces the OGA and industry jointly committed to maintaining current cost disciplines

UKCS still has diverse portfolio of opportunities from large complex developments to small low cost tie-backs

Opportunities and dramatically lower unit costs mean UKCS boasts world-class payback periods

Recent investments in UK projects have delivered world-class returns in terms of breakeven and value per barrel

OGArsquos marginal discoveries initiative illustrates the continuing potential of the UK

Value per barrel (post tax) Breakevens

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 15: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

15

Leading on returns payback break-evens and value

UK performs favourablyIRR and reserves Payback periods Break-evens and value per bbl

Source OGAWood Mackenzie

Number of projects in each region Payback period years

UK post tax IRR is 13 higher than next highest basin

MER UK Forum and Task Forces the OGA and industry jointly committed to maintaining current cost disciplines

UKCS still has diverse portfolio of opportunities from large complex developments to small low cost tie-backs

Opportunities and dramatically lower unit costs mean UKCS boasts world-class payback periods

Recent investments in UK projects have delivered world-class returns in terms of breakeven and value per barrel

OGArsquos marginal discoveries initiative illustrates the continuing potential of the UK

Value per barrel (post tax) Breakevens

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 16: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

16

Resource base(N

umbe

rs in

billi

on b

oe a

s at

end

201

8)

2018

changes

02

06

Billion boe moved into sanctioned from project approvals in 2018

Billion boe produced in 2018 with 75 production efficiency

Billion boe added from new discoveries in 2018

41 prospective resources in

mapped prospects and leads

75unsanctioned

(52 from proposed new developments and other discoveries)

55 sanctioned

447 produced to date

Prospects leads and plays

Rang

e of

tota

l pot

entia

l res

ourc

es

ca 1

0 to

20b

n bo

e

05

2018 Resource and reserve maturation

112 in plays

Significant remaining resource potential

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 17: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

17

Projects in execute phaseConsented 2019

The OGA does not provide endorsements or investment recommendations Those projects listed are not necessarily a definitive list and the locations are indicative

Consented 2018Consented 2011-2017

NNS

WOS

CNS

SNSIS

Alligin

Galleon FDPA

Tolmount

Fram

Buzzard Phase 2 FDPA

CookFDPA

Seagull

Arran

Finlaggan

Columbus

Vorlich

Joanne

Captain EOR FDPA

Shearwater Re-Plumb FDPA

Penguins FDPA

West Brae FDPA

Utgard

BucklandFDPAStorr Phase 1

Consented projects - not yet in production as at mid 2019

Solan FDPA

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 18: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

18

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

February 2019 Projection

March 2015 Projection

An additional 39bn boe added to projections since March 2015

Contributing factors to the 39bn boe added since March 2015

Estim

ated

add

ition

al c

ontr

ibut

ion

(bn

boe)

0

02

04

06

08

10

2015-18Extra

ProductionPostponing

COP

InfieldReserves

Aid EORProject

SanctionsOther

factors

RecentEampA

ActivityFuture

Exploration

094

090

028

061

025030030032

UK oil and gas production projectionscenarios

+39bnboe

Additional

00

05

10

15

20

2015

2020

2025

2030

2035

2040

2045

2050

yadtnelaviuqe lio fo slerrab noillim

Vision Scenario

February 2019 Projection

March 2015 Projection

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 19: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

19

Measuring success

Costs mitigatedpoundM 850

Value of investmentspoundbn 37

Time saved to industry (fast-tracked consents) 3919

DAYS

Success metrics

377 success stories were recorded between 2015 and 30th June 2019 across the OGA in partnership with industry and government

The OGA has developed a success stories tracker dashboard and methodology to allow impact to be quantified (relative to what would have happened in the absence of support or intervention) using three key metrics

Expected future volume of oil and gas production

Capital expenditure committed to new projects

Reduced or avoided costs through improved or accelerated outputs

Tripartite barrels(mmboe)

Protect existing barrels mmboe

866

Newbarrels added mmboe

11161982

Decommissioning cost savings(poundM)

Actual poundM 323

Forecast poundM 194517

Impact on industry Action by the OGA

Production volume

Technologies

Exploration opportunities

Supply chain initiatives

Decommissioning opportunities

Decommissioning cost reduction

Influence

Promote

RegulateResource maturation

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 20: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

20

Key

Revitalise explorationThe OGA has provided substantial incentives and data packages to support licensing rounds and help stimulate interest including

Legend

Exploration wells drilled since OGA establishedRestricted Blocks30th Round Awards31st Round Awards31st Supplementary Round Blocks Offered32nd Round Blocks OfferedRhum Out Of Round Blocks OfferedLicenses awarded in previous rounds

For indicative purposes only

Proposed future licensing plan

2019 2020 2021

31st

supplementary Q1

32nd

33rd

All rounds alternating between frontier and mature areas

Mature Areas

Frontier Areas

Round opens

Round closes

Licence awards

Frontier Areas Mature Areas

Rev

italis

e ex

plor

atio

n

Note Licence Rounds and timings are contingent on the Strategic Environmental Assessment (SEA) with the next SEA assessment planned in 202021

Mature - Greater Buchan Area

pound40 million UK govt funding for new seismic acquisition in frontier areas and reprocessing legacy data

Digital geological maps to promote enhanced regional understanding prospect and discovery reports

Public Release of the Southern North Sea Seismic MegaSurvey

In support of the 32nd licensing round the UK government has also provided pound5million funding for rock physics analysis and petroleum systems database

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 21: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

21

Rev

italis

e ex

plor

atio

n

11

14 11

090904

23

20

17 13

11

04 05

03Reserves

Prospective Resources ndash Plays

SNS (inc SW Britain for plays)

CNS (incMid North Sea Highfor plays)

NNS

35

Contingent Resources (Mean volumes) ndashIn field and in development

Prospective Resources ndashLeads and Prospects

Contingent Resources (Mean volumes) ndashUndeveloped Discoveries

4716

14

08 WoS

17

25

Rockall Trough

Revitalising exploration activity

Alternating frontier and mature rounds

Innovative licence framework low entry barriers

Large volumes of free geoscience data

National Data Repository (NDR) of well and seismic information

Targeting yet-to-find potential new prospects and plays

Improving performance technical stewardship and technology

Integrating exploration into Area Plans

Focusing on value not volume

Exploration success rates

No Exploration

Wells

Technical Success Rate

Technical finding cost

$boe

Technical Volume mmboe

2014 13 69 9 83

2015 15 53 5 115

2016 11 45 5 64

2017 15 47 35 131

2018 7 43 1 239

FF

F

M

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 22: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

2222

Impr

ove

asse

t ste

war

dshi

p Asset stewardship ndash driving improvement

Rationalised industry surveys A single source of robust data covering the whole asset life cycle across the UKCS

Asset stewardship expectations are an OGA view of lsquogood practicesrsquo and provide information as to whether a licenseeoperator is meeting the MER UK strategy obligations

LEADS

PLAY

PROSPECT

POTENTIALIN

FIELD

SANC

TIO

NED

DEVE

LOPM

ENTS

DEVELOPMENT

UNDER

PRODUCING

OPTIMISATION

DEVELOPMENTS

DISCOVERIES

(Mean unrisked)

CONTINGENT

RESOURCES

PROSPECTIVE

RESO

URCES

(2C)

RESERVES (2P)

PRODUCTION

All UKCS Operators

Rationalised Survey Returns via Energy Portal

Full UKCS asset life-cycle

OGA Data review and analysis

Forecasting Operator Benchmarking Industry performance Decom cost

reductionResource

Progression

Senior Leadership

Tier ZeroTier One

Tier Two

MER UK ForumMER UK Steering GroupSector DealMD MeetingsTier Zero

Progress of OpportunitiesKey Industry ThemesBenchmarkingCollaboration

Resource ProgressionMaximise ReservesEmbedding StewardshipOperator Scorecard

OperatorsExplorationNew DevelopmentsTechnologyDecommissioningCollaboration (CBQT)

Stewardship expectations Refreshed in 2019 to reflect three years of experience

10 Expectations which apply across the whole exploration and production lifecycle

Maintains the strong linkage between expectations tiered review process annual stewardship survey and performance benchmarking

Tiered stewardship reviewsOGA amp Operator strategic engagement framework through tiered approach

Asset stewardship is crucial to maximising economic recovery from the UKCS and to delivery greater value overall The asset stewardship expectations are embedded through regular interface with industry

Net

uni

t ope

ratin

g co

st (pound

boe

)

Operators

Benchmark operator X example

35

30

25

20

15

10

5

0

BenchmarkingOGA now benchmarks 18 different metrics with 69 sub elements - driving industry-wide performance improvements

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 23: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

23

Impr

ove

asse

t ste

war

dshi

p

23

Further example operator benchmarksProduction Efficiency (PE) Unit Operating Cost (UOC) Reserves Replacement Wells Data Cleansing

Exploration Performance Seismic Compliance Field Recovery Factor Collaboration

Colours represent year on year change

Field quality index

Rec

over

y fa

ctor

Operator X

Operator X

2017

Res

erve

s R

epla

cem

ent

Operator X

Operator X

KPI derived from basket of 7 exploration metrics

Operator X

Expl

orat

ion

KPI s

core

Operator Xpoundboe

0 5 10 15 20 25 30

Operator X

Acquisition

Processing0102030405060708090100

0102030405060708090100

Operator X

Operator X

Operator X

Operator X

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 24: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

2424 24

WellsIm

prov

e as

set s

tew

ards

hip

Transformational increase in well activity and management required to deliver 7bn boe additional reserves

The issue 2016 2017 2018

No spuds 109 94 101

Non productive time 17 15 23

Surveillance NA 8 2

Intervention rate NA 14 8

Provisional numbers

Strategy Stewardship Lessons learned Industry

Regulatory compliance

Increase activity levels

Improve activity performance

Well activity performance

Lessons learned used amp shared

Productivity of wells

Identify common opportunities

Share basin knowledge

Inform industry workstreams

Competitive well delivery taskgroup

Reservoir amp well optimisation taskgroup

OGA response

Wells Strategy

Stewardship Expectations

Insights Report

Lessons learned

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 25: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

2525

Significance of the supply chain

Working with DIT SDI UKEF and EIC

To drive growth of the UK oil and gas Supply Chain by an additional pound290bn ndash exports from 37 to 74 of global market

Over 80 Supply Chain Action Plans (SCAPs) received Now an integral and mandatory part of the Field Development Plan and Decommissioning Programme approval process requires operators to demonstrate they are

SCAPs

Delivering maximum value from project activity in line with MER UK

Driving Decommissioning costs down through innovative and collaborative contracting

Contributing to Total Value Add (TVA) through supply chain engagement

OGA supporting

Collaboration

Tangible reduction in project costs through collaborative contracting

Effective engagement between the UK Norway Netherlands and Denmark (One North Sea)

Meet the BuyerHackathons

Solution driven events creating an environment for open discussion between the operator and the supply chain

Oil and Gas Pathfinder Allowing operators to highlight challenges and seek solutions from the service sector Providing visibility of supply chain opportunitiesGives overall view of UKCS activity to the industry

UK supply chainexports turnover

Service sector - anchored in the UK enabling MER UK and exporting to the world

2015pound35bn

2016pound30bn

2017pound27bn

85

60

80

Develops over 60 of new technologies

80 of UKCS workforce

Approx 85 of operator spend

Cre

ate

the

right

con

ditio

ns

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 26: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

2626

Area plansD

rive

regi

onal

dev

elop

men

t

West of Shetland Gas

East of Shetland Decom

Quad 9 Gas

Outer Moray Firth

Central Graben Area

SNS Infrastructure Optimisation

East Irish Sea

Tight Gas

Gannet (Fulmar Bypass)

Fram Arran Columbus Vorlich

Penguins

Four plans have already moved to stewardshipPenguins Unlocking new opportunities in a mature field

Fram Arran Columbus amp Vorlich Delivering an additional 100mmboe

Gannet Protects production beyond previous export route cessation of production

Tight Gas in Southern North Sea A number of tight gas infill wells spudded

Area plans integrate exploration through to decom

Optimise infrastructure extend life for MER UK

OGA establish plan amp timing ndash use it or lose it

New operators new partnerships - right assets right hands

Industry best placed to deliver detail per behavioural guidelines

Unlocking discoveries undeveloped for decades

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 27: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

2727

Potential solutions to unlock this prize

Marginal discoveriesA significant contribution to achieving MER UK is the exploitation of over 300 undeveloped marginal discoveries which offer opportunities for clustering and aggregated discovery volumes Most are within but some are outside tie-back distance and therefore may be better suited to stand-alone type solutions

Breakdowns of discovery volumes ndash 33 bn boe of potential

WOS

NNS

MFB

CNS

SNS

EIS

WOS West of Shetland

NNS Northern North Sea

MFB Moray Firth Basin

CNS Central North Sea

SNS Southern North Sea

EIS East Irish Sea

33 bn boe of potential 0

1

2

3

Tech

nica

lly R

ecov

erab

le (b

nboe

)

Licensed

Unlicensed

30thRound

01

1

10

100

Licensed Unlicensed

0 100 200 300Discoveries

Tech

nica

lly

reco

vera

ble

(mm

boe)

Technology

Available and potential future innovations can unlock marginal developments such as

bull State-of-the-art inversionbull Effective and cheaper

stimulation techniquesbull High-angle ERDbull Subsea H2S treatment

at wellheadbull Tie-backs of the futurebull Efficient topsides modifications

bull Effective metering to enable daisy chain fields

bull Heavy oil production technologybull uHPHT subsea equipmentbull Low cost H2S and CO2

treatment to export gas spec

Clustering

Cluster development could lead to significantly improved CAPEX efficiencies

Area Plans

CNS has the largest UKCS share of marginal discoveries which are being developed within nine Area Plans with active involvement from industry

Production club

Other clustering concepts which are being appraised combine small undeveloped discoveries from multiple license holders to new unlocking strategies

Source OGA data

Driv

e re

gion

al d

evel

opm

ent

Phot

o co

urte

sy

Mag

seis

Fairfi

eld

and

Ampl

us

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 28: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

2828 28

We work with the industry to make sure existing technologies are deployed to their full effect and relevant new technologies are developed and used to maximise economic recovery from the UKCS

MER UK Forum ndash technology priorities and ownership

Leverage technology

OGA role

DemandExplorationTask Force

Asset Stewardship Task Force

Efficiency Task Force

Decommissioning Task Force

Supply Chain Task Force

Priorities

Technology Leadership Board

bull TLB Define industryrsquos technology priorities and engage with delivery organisations

bull Technology Sponsors Champion technology development and deployment

bull Industry Technology Network UKCS Technology Network share learnings on technology adoption and deployment

Delivery

bull Takes forward themes into execution

bull Government-backed and industry-led

bull Solution Centres Centres of Excellence Innovation Hub and Technology acceleration

bull Anticipates technology need

bull Provides innovation in response to industry demand

bull World leading capabilities

bull Provides expertise knowledge and routes to funding

bull Access to advanced facilities

bull Research into early stage technology

Leve

rage

tech

nolo

gy a

nd d

ata

From operatorsrsquo Technology Plans

Published annually

Covers asset lifecycle

Oversees industry engagement

Support industry to adopt technologies for MER UK

Holds operators to account in their technology plans and stewardship expectations

Existing technologies bull Available for immediate

deployment

bull Share operatorsrsquo experience

Emerging technologies bull Address MER UK

gaps Collaborate in development and pilot

Highlights

UKCS Technology Insights

April 2019

Supply Chain

Research Academia

The Oil amp Gas Technology Centre

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 29: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

2929

Maintain asset integrity

Innovative standalone facilities

Low capexLow opex

Re-deployable (multi-use)

Versatile production units

Unmanned buoys

Low cost reusable platforms

Tie back of the future

System simplification

Plug-n-play

Re-usable

Composite spoolable

Subsea chemical injection

Subsea power

Mechanical connectors

Existing assets New developmentsOGA expectations

OGA Insights Portal

Operators deploy appropriate technologies to deliver MER UK

Operators submit annual technology plans

Embed technology in the business cycle

Deploy technology in a scaled and timely manner

Share industry learning to promote deployment

Focus on best in class ready- to-deploy technologies

Highlight emerging innovation and collaboration opportunities

Technology Insights Portal - httpswwwogauthoritycouktechnologytechnology-insights-and-portaltechnology-insights-portal

Leve

rage

tech

nolo

gy a

nd d

ata

Efficient facilities management

Cost effective decommissioning

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 30: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

303030

Digital transformationThe OGA aims to be an innovator and a catalyst helping industry academia and the supply chain to use digitalisation to unlock the huge value from data whilst at the same time providing excellent digital services to its stakeholders in support of regulatory excellence

Leve

rage

tech

nolo

gy a

nd d

ata

Digital excellence

Over 12000 wellbores

2998 pipelines

3189 subsea installations

690 surface installations

~135 million log curves

~265000 well log images

~166000 well report images

Seismic

2D

Other

3D

3D642

104

4252

4998surveys

Other

2D

InfrastructureEarly in 2019 the OGA successfully launched the United Kingdomrsquos first offshore oil and gas National Data Repository (NDR) for petroleum-related information and samples The NDR is a key piece of the UKrsquos digital infrastructure

The NDR is a huge data collection from UKCS offshore oil and gas wells 2D and 3D seismic surveys infrastructure licences and fields Operated by the OGA on the behalf of the nation industry and other interested parties

Over 300 km of drill core

45 million samples of cuttings

8000 offshore wells

Links to the National Geological Repository

Wells

includes all subsea and surface installations

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 31: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

3131

OGA Data CentreThe OGArsquos most visited website area provides maximum value from the wealth of UK data licence wells and field data can be queried and downloaded Supports the OGA strategy of making as much data publicly available as soon as possible

Comprehensive data only a few clicks away

994MSpatial server requests

700growth in server requests

since OGA established

60k+users

Map it Download itView it Share itChart it

Online Production Efficiency Dashboard

Offshore licences by administrator

Leve

rage

tech

nolo

gy a

nd d

ata

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 32: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

32

Reducing decommissioning costsOn track to meet targets for cost reduction and certainty

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

pound39bn

2017 lsquoLike for Likersquo

2017 lsquoLike for Likersquo

10

7

2017 2018 2019

Baseline cost estimate 2016

prices 2019 Full Portfolio

Industry Target35 reduction

(P50) Like for Like 2017 inventory

pound56bn(P50) Like for Like

2017 inventory

pound49bn(P50) Like for Like

2017 inventory

(P50) Updated 2019 inventory

2017 prices

pound58bn

(P50) Updated 2019 inventory

2018 prices

pound51bn

2022

pound597bn(P50)

Class estimate improvement

2017 2018 2019

Significant cost forecast reductionbull Improvement in cost

estimation certaintybull Embedding experience

sharing learning adopting innovation and challenging the norm

Target 90 Class 3 or better by 2021

6535

Class 3 or better

Class 45

Class estimate Vs Time

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-15

2025

-26

Frac

tion

of B

asel

ine

(201

7) E

stim

ate

Like

for L

ike

Scop

e C

ompa

rison

160

140

120

100

80

60

40

20

0

pound597bn pound56bnpound49bn

32

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 33: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

3333

Impr

ove

deco

mm

issi

onin

g effi

cien

cy

Priority and focus areas Sharing lessons learned

Decommissioning dashboard and benchmarking Integrated approach

OGA Priority

gt Develop collaborative execution models

gt Develop an enhanced decommissioning supply chain

Real life case studies

Project management

Warm Phase2 | Cold

Phase3 | Removal4 | Dismantle amp Dispose5 | Surveillance6 |

1 | Operating Late-life Phase

Operating1 |

Facilities running Owner costs

Well Abandonment

Facilities Pipelinemaking safe

Subsea Infrastructure

Topsidesremoval

Substructure removal

Topside amp Substructure Onshore Recycling

SiteRemediation MonitoringTopsides

preparation

PlanningScope

Execution

ScopeProjectManagement

Determine the strategic fit vs life-cycle of asset(s) in a companys portfolioAre others more natural ownersOperators at the late-life stage Divest sufficiently early for the asset(s) to still be attractive

At late-life align organisation amp contracting strategy to maximisevalue through optimising both life-cycle costs and production

Ensure organisational structure is incentivisedqualified toact on high value decom opportunities during late-life

Stewardship Discussions with the OGA utilising the Decom Dashboard will allow cost reduction opportunities to be identified and a structured capture plan agreed

Submitting a topsides Decommissioning Programme separately to that for the substructure may give valuable timing flexibility for topsides removal esp

If issues associated with the substructure decommissioning (eg with OSPAR derogation cases) may result in delays to the Decom

Consider submittinga Decommissioning Programme aheadof Cessation ofProduction (CoP) toenable opportunistic decommissioning activities ifwhen cost-effective

eg down-cycle costs maybe lower than at other times

early regulator engagement will clarify requirements of cost-effective yet compliant decommissioning

Explore sharing costs of environmental surveys datasets with nearby Operators incl utilising existing relevant reports

Planning Scope

Online portal

Success stories

20+

PampA Subsea Removals Post CoP Running Costs

Late life operation

gt 6 yrs to 3 yrs before CoP gt 3 yrs before CoP

Strategy (Corporate and UKCS)

Benchmarking and cost forecast dashboard

Learning knowledge review and implementation

Technology assessment

Strategy (Corporate and UKCS)

Plan for decommissioning

Potential for campaigns and scope aggregation

Evaluate asset condition

Potential for re-usere-purposing

ContractingExecution strategies (SCAP development)

Implement decommissioning preparations and activities

Stewardship expectations

L O N G G L I D E P A T H

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 34: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

34

OGA role in the energy transition

Working with industry government and other regulators

Department forBusiness Energyamp Industrial Strategy

UKCS Energy Integration Project The current role includes

Licensing of carbon storage and advice on suitability prior to decommissioning

A major role in maximising domestic gas production ndash an important transition fuel

Supporting diverse range of supply chain options

Continuing work on Enhanced Oil Recovery (EOR)

Understanding of offshore energy integration including electrification amp hubs

Consistency of the OGArsquos offshore flaring and venting regime with government policy

Other core OGA MER UK work with emissions benefits such as increasing operating efficiency and asset stewardship to extend life of assets

Project to explore the potential for a more integrated offshore energy sector

Building closer links between oil and gas production and offshore renewables ndash quick wins

Funded by pound900000 grant from the Better Regulation Executiversquos Regulatorsrsquo Pioneer Fund

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 35: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

35

Carbon capture and storage OGA role

Licensing and permitting authority for carbon storage ndash OGA issued first licence Dec 18

Maintain the carbon storage licence public register

Consider re-use as part of the OGA Cessation of Production process

Consultee to OPRED on operatorsrsquo decommissioning plans

Exploring the role of CO2 EOR

Working with government and industry

Taking forward key action points overview of infrastructure assets and clearer re-use policy

Engaging with CCUS project developers

Guiding project developers and applicants through OGA process

CO2 storage

CO2 transport

CO2

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 36: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

3636

LegendUK Shale Prospective Areas

Onshore Licences

For indicative purposes only

Onshore licensing and consents

The OGArsquos role for onshore oil and gas includes

Regulation Ensuring an effective licensing system and regulatory controls are in place including mitigating the risk of induced seismicity

Monitoring activity Overseeing operators to ensure commitments are being pursued on over 175 licenses

Collaboration Recognising that high levels of public interest demand transparency active engagement and close working with government and other regulators

Features of OGArsquos onshore activity

Jurassic oil hybrid play Horse Hill 1 testing underway and further drilling planned to appraise the potential of the Kimmeridge Resource Play

Carboniferous shale gas Two wells drilled and hydraulic fracture operations commenced in 2018 Hydraulic fracturing operations continuing in 2019

Ongoing exploration At least three exploration wells expected to be drilled in 2019

Stewardship Over 50 onshore existing and producing oil and gas fields

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 37: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

3737

The way forward

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

The OGA priority themes were set out in 2015 and were refreshed

in 2019 to refocus on the next five years with updated KPIs

KPI Area KPI Measure KPI Target Timing

1 Revitalise exploration Discovered recoverable reserves

200 mmboe additional recoverable reserves (5 year rolling average) Annual

2Enhanced

asset stewardship

Recoverable reserves 80 UKCS average production efficiency End 2022

3 Cost efficiency Maintain average UOC within +- 15 of the 2017 level (2017 prices) Annual

4 Regional development Resource progression 300 mmboe from 2C to 2P annually Annual

5Improve

decommissioning efficiency

Decommissioning cost 35 reduction in forecast total decommissioning costs from 2017 baseline estimate End 2022

6 Cost certaintyFor 90 of all assets an AACE class 3 estimate

(or better) should be submitted to the OGA at least three years before each planned decommissioning activity

End 2021

7 People processes and systems Staff engagement 5 percentage point improvement

in OGA positive engagement score End 2024

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 38: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

3838

MER UK Forum Steering Group and Task Forces

MER UK Forum

The MER UK Forum drives activities that support the principle objective of MER UK whilst fully supporting the

UKrsquos energy transition to net zero

Small focused membership includes industry task force leads ministers and officials Oil amp Gas UK and chaired by the OGA Others will be invited according to the agenda

Steers the task forces discusses and reviews strategic issues such as the UKrsquos energy transition Industrial Strategy collaboration and senior level

OGAindustry engagement

Six industry-led Task Forces focused on core areasand Industry Cultural Change Champion

MER UK Steering Group

Exploration

Technology Decommissioning Supply Chain and Exports

Supply Chain and Exports Task Force

Decommissioning Task Force

Technology Leadership Board

Exploration Task Force

Asset Stewardship Task Force

Efficiency Task Force

Asset Stewardship Efficiency

Industry Cultural Change Champion

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 39: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

393939

MER UK in actionCNOOC ndash Glengorm Discovery

Exp

lora

tion

bull First mapped over 20 years ago

bull Recoverable resources estimated at close to 250 million barrels of oil equivalent

bull Potential to be one of the largest discoveries on the UKCS since 2008

Total - Culzean

Dev

elop

men

t

bull Production started in June 2019 ndash ahead of schedule and gt10 under initial budget

bull At plateau production estimated to be responsible for circa 5 of UKrsquos gas needs

bull Estimated gas reserves of about 250-300 million barrels of oil equivalent

bull Carbon impact minimised during commissioning phase through close cooperation between Total and the OGA

Siccar Point Oil and Gas Technology Centre

Tech

nolo

gy

bull CAN-ductor ndash subsea well conductor

bull Potential to cut well construction time costs and enable complex drilling solutions

bull Piloted by Siccar Point Energy in the UKCS

CNS Hub

Asse

t Ste

war

dshi

p

bull Operator requested Cessation of Production (COP) but held to account by OGA stewardship process as hub strategy absent vintage seismic remaining resource potential JV misaligned

bull As a result of OGA refusing to consider COP ndash New hub strategy developed

seismic purchased infill drilling programme planned JV better aligned and life extension underway

Collaborating amp Connecting

Supp

ly C

hain

bull Oil amp Gas Pathfinder ndash contracts being awarded as a result of operators providing information

bull Hackathons ndash evidence of operators adopting solutions generated

bull SNS Well PampA Forum ndash innovative collaboration between SNS operators sharing information

BP and SaipemMiller Topsides

Dec

omm

issi

onin

g

bull Removal cost was ltp50 Northern and Central North Sea benchmark of pound42ktonne

Dev

elop

peo

ple

pro

cess

es a

nd s

yste

ms

bull Competitive cost due to ndash rapid development of expertise and

execution efficiency and the increase of ownership of the supply chain

ndash collaborative management approach between operator and supply chain

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 40: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

4040

Director ofOperations

Gunther Newcombe

Director of Strategy

Hedvig Ljungerud

Director of HR and Supply Chain

Stuart Payne

Chief Financial Officer

Nic Granger

Dr Andy Samuel

ChiefExecutive

Executive team

Chief Executive

Dr Andy Samuel

Non-Executive Director

Robert Armour

Company Secretary and General Counsel

Dr Russell Richardson

Chief Financial Officer

Nic Granger

Tim Eggar

Chairman

Acco

unta

ble

to B

EIS

Secr

etar

y of

Sta

te

Non-Executive Director

Mary Hardy

Board of Directors and Company Secretary

Non-Executive Director

Frances Morris-Jones

Director of Regulation

Tom Wheeler

Experienced leadershipD

evel

op p

eopl

e p

roce

sses

and

sys

tem

s

Shareholder Representative

Director

Emily Bourne

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 41: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

41

Exploration and production including Oil and gas policy includingOffshore onshore (England) carbon storage gas storage and gas unloading licensing

OGA

Environmental aspects of onshore regulations SERG

Field development plan consents OGA

Cessation of production approvals OGA

Offshore pipeline works authorisation OGA

Infrastructure OGA

Commercial matters and changes of control OGA

Flaring and venting consents OGA

Metering and allocation OGA

Production outages OGA

Offshore decom efficiency costs technology OGA

Offshore decom programme approval execution and monitoring BEIS ndash OPRED

Offshore environmental management and inspection BEIS ndash OPRED

Health and safety management HSE

Supply chain action plans OGA

Overall oil and gas policy BEIS

Legislation BEIS

Oil and gas parliamentary processes BEIS ndash OGA shareholder team

Offshore decommissioning BEIS ndash OPRED OGA HMT

Fiscal and taxation

HMT The OGA provide expertise and evidence to HM Treasury

Supply chain and business impact BEIS amp OGA

Environment BEIS ndash OPRED

International relations and tradeBEIS DIT OGA FCO

Key

BEIS Department for Business Energy and Industrial Strategy

DIT Department for International trade

FCO Foreign and Commonwealth Office

HMT Her Majestyrsquos Treasury

OGA The Oil and Gas Authority

OPRED Offshore Petroleum Regulator for Environment and Decommissioning

SERG Shale Environmental Regulator Group (Oil and Gas Authority Health and Safety Executive and Environment Agency)

Who does what in UK government

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 42: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

42

Key publicationsNew stewardship regime Worked with industry to develop 10 expectations and implementation guides spanning the whole lifecycle and the stewardship review process

Strategic overview Published with industry sector strategies setting direction

Asset Stewardship Expectations

Southern North Sea Tight Gas

June 2017

Strategy

Collaborative Behaviour Quantification Tool Assessment Guidance Note

April 2017

Asset Stewardship Expectations

Asset Stewardship Expectations

Guidance

March 2017

StewardshipReview

Asset Stewardship ExpectationsThe Maximising Economic Recovery Strategy for the UKAs reproduced by the OGA

Department forBusiness Energyamp Industrial Strategy

Asset Stewardship Expectations

OGA Annual Reportand Accounts

2017-18 (for the year ended 31 march 2018)

HC 1371April 2019

OGA Corporate Plan 2019 - 2024

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

2345678910

Stewardship ExpectationsOverview

1

July 2019

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

A Where a Stewardship Expectation includes a reminder of a licence or other statutory obligation such obligation will have binding legal effect

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20192345678910

StewardshipExpectations Overview

1

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK Strategy

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

Stewardship Expectations Overview

MER UK Strategy

1Joint Venture Hub Strategy

Stewardship Expectation 1

July 20192Delivering Exploration and Appraisal Work Programmes

Stewardship Expectation 2

July 20193Optimum Use of Subsurface Data

Stewardship Expectation 3

July 20194Well Activity Performance

Stewardship Expectation 4

July 20195Robust Project Delivery

Stewardship Expectation 5

July 20196Integrated Field Management

Stewardship Expectation 6

July 20197Commercial Alignmentand Delivery

Stewardship Expectation 7

July 20198Technology Deployment

Stewardship Expectation 8

July 20199Build a Culture of Collaboration

Stewardship Expectation 9

July 201910Cost EffectiveDecommissioning

Stewardship Expectation 10

July 201945678910

StewardshipExpectations Overview

July 2019

OnlineA5 paperOnline

Figure 1 Document structure

8 The OGA may review and refresh these SEs at a point in the future as part of continuous improvement and to ensure they remain relevant

9 The SEs are not intended to have a binding legal effect but rather set out for industry operating across the oil and gas lifecycle expectations which if followed will help to facilitate delivery of the MER UK StrategyA

43

All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 43: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

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All OGA publications can be found at httpswwwogauthoritycouknews-publicationspublications

Sector wide data The OGA provide reports including reports using data from the annual stewardship survey to help industry improve and benchmark performance

Guidance Worked with industry to provide guidance on our powers and how they are being used which can be found at httpswwwogauthoritycouk regulatory-frameworkguidance

Lessons Learned from UKCS Oil and Gas Projects 2011-2016

Asset Stewardship Expectations

UKCS Production Efficiency in 2016

June 2017

UK Continental ShelfUnsanctioned Discoveries Information PackUKCS Production Efficiency in 2016

June 2017

UKCS Production Efficiency in 2016

June 2017

Recovery FactorBenchmarkingUKCS Production Efficiency in 2016

June 2017

UK Continental Shelf (UKCS) Oilfields

September 2017

Asset Stewardship ExpectationsUK Oil and Gas Reserves and ResourcesAs at end 2016

Asset Stewardship ExpectationsSNS Salting Study

As at end 2016

Impact of Salt Deposition on Production Losses

Asset Stewardship Expectations

Gas-to-wire UK SNS amp EIS

UKCS Production Efficiency in 2016

June 2017

Wells Insight Report 2018

UKCS Production Efficiency in 2016

June 2017

UKCS Operating Costs in 2017

October 2018

Asset Stewardship ExpectationsGuidance

Online digital The OGA has range of online resources and tools to aid performance benchmarking and promote transparency

Production Efficiency Dashboard

Petroleum Production Reporting System

Technology Insights Portal

Decommissioning Dashboard and benchmarking

UKCS operating costs 2018March 2019

Projections of UK Oil and Gas Production and Expenditure

UKCS Decommissioning

July 20192019 Cost Estimate Report

UKCS Technology Insights

April 2019

Date of publication July 2019

Wells Strategy

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF

Page 44: OGA Overview 2019/2020 - Oil and Gas Authority€¦ · OGA Overview . 2019/2020. Front cover: Courtesy of BP Exploration. 3 OGA role 4 Introduction from the Chief Executive 5 Current

Copyright copy Oil and Gas Authority 2019

wwwOGAuthoritycouk

Contact us atogacorrespondenceogauthoritycouk

twittercomogauthoritywwwlinkedincomcompanyoil-and-gas-authority

OGA London Office 4th Floor 21 Bloomsbury Street London WC1B 3HF

OGA HeadquartersAB1 Building 48 Huntly Street Aberdeen AB10 1SH

Oil and Gas Authority is a limited company registered in England and Wales with registered number 09666504 and VAT registered number 249433979 Our registered office is at 21 Bloomsbury Street London United Kingdom WC1B 3HF