2017 No. 426
Energy

The Oil and Gas Authority (Fees and Petroleum Licensing) (Amendment) Regulations 2017

Made
Laid before Parliament
Coming into force
The Secretary of State makes the following Regulations in exercise of the powers conferred by sections 12(1), (2), (5) and (6) and 82(2) and (3) of the Energy Act 20161 and having consulted the Oil and Gas Authority in accordance with section 12(8) of that Act.

Citation and commencement1.

These Regulations may be cited as the Oil and Gas Authority (Fees and Petroleum Licensing) (Amendment) Regulations 2017 and come into force on 6th April 2017.

Amendments to the Oil and Gas Authority (Fees) Regulations 20162.

(1)

The Oil and Gas Authority (Fees) Regulations 20162 are amended as follows.

(2)

In regulation 2 (interpretation)—

(a)

after the entry for “the 2008 Act”, insert—
““the Applications Regulations” means the Petroleum Licensing (Applications) Regulations 20153;
“the Offshore Safety Directive Regulations” means the Offshore Petroleum Licensing (Offshore Safety Directive) Regulations 20154;”;

(b)

after the entry for “development and production programme”, insert—

““development area proposal” means a proposal submitted pursuant to a petroleum exploration and development licence defining the geographic locations within a petroleum field where the licensee proposes to undertake development and production including, where relevant, a plan setting out the activities to be carried out;”;

(c)

after the entry for “licensee”, insert—

““petroleum exploration and development licence” has the meaning given in regulation 2 of the Applications Regulations;”;

(d)

after the entry for “relevant licence”, insert—

““retention area proposal” means a proposal submitted pursuant to a petroleum exploration and development licence defining the geographic locations where the licensee proposes to undertake exploration and appraisal activities;”;

(e)

after the entry for “well”, insert—

““well or installation operator” means a person appointed in accordance with regulation 5 of the Offshore Safety Directive Regulations (appointment of operators by offshore licensees) to conduct the planning or execution of well operations or offshore petroleum operations other than well operations;”; and

(f)

after the entry for “well suspension”, insert—

““work programme” means a programme set out in a schedule to a petroleum licence which sets out the prospecting to be undertaken during the initial term, including any geological survey by any physical or chemical means and any test drilling.”.

(3)

In regulation 3(1) (applications prescribed for purposes of section 12(1)(d) of the Energy Act 2016), after sub-paragraph (o) (application for approval of the appointment of an operator under a petroleum licence), insert—

“(p)

an application for approval of the appointment of a well or installation operator under regulation 5 of the Offshore Safety Directive Regulations where approval is granted in accordance with paragraph (1)(a) of that regulation;

(q)

an application for consent to a retention area proposal where consent is granted;

(r)

an application for consent to a development area proposal where consent is granted;

(s)

an application for consent to extend the initial, second or final term of a petroleum licence;

(t)

an application for consent to extend the final phase of the initial term of a petroleum licence;

(u)

an application for consent to amend a work programme.”.

(4)

In regulation 4 (fees payable for consents and pipeline works authorisations)—

(a)

in the heading, omit “Estimated”;

(b)

in the formula in paragraph (3), for “£500” substitute “£595”;

(c)

in paragraph (4), omit the words “which the OGA estimates will be”;

(d)

in paragraph (5), for the words “under regulation 5(3)” substitute “of the application”.

(5)

Omit regulation 5 (requests to determine fees under regulation 4).

(6)

In regulation 6 (fixed fees payable for other consents)—

(a)

in paragraph (1), for “(2)” substitute “(3)”;

(b)

at the beginning of paragraph (2), insert “Subject to paragraph (3),”;

(c)

after paragraph (2) (but before the table), insert—

“(3)

Where the fee payable under paragraph (1) is for one of the following applications, the licensee must pay the fee within 30 days of the OGA notifying the licensee of the determination of the application unless the OGA notifies the licensee in writing that the licensee may pay the fee at a later date—

(a)

an application for consent to extend the initial, second or final term of a petroleum licence;

(b)

an application for consent to extend the final phase of the initial term of a petroleum licence;

(c)

an application for consent to amend a work programme.”; and

(d)

for the table (fees for other consents), substitute the following—

“Activity or matter requiring consent

Fee payable

Methodology proposed for the measurement of petroleum

£1,214

Drill a primary well

£729

Drill a sidetrack well branching off from the principal well to a target location different from that of the principal well

£596

Fit or refit equipment in a well for the purpose of enabling hydrocarbon production or injection

£566

Get petroleum from a licensed area

£1,052

Variation of a consent to get petroleum from a licensed area

£1,052

Flare or vent petroleum from a well

£765

Variation of a consent to flare or vent petroleum from a well

£765

Well suspension

£596

Put back into use any well subject to a well suspension

£566

Abandon a well permanently

£566

Change of licensee of a petroleum licence

£401

Change of the beneficiary of rights granted by a petroleum licence

£401

Appointment of an operator under a petroleum licence

£1,201

Extension of the initial, second or final term of a petroleum licence

£1,000

Extension of the final phase of the initial term of a petroleum licence

£1,000

Amendment of a work programme

£1,000”.

(7)

After regulation 6, insert—

“Fees payable for consent to retention or development area proposals6A.

(1)

A licensee must pay a fee of £1,068 where the licensee applies to the OGA for consent to a retention area proposal or a development area proposal and the OGA grants consent.

(2)

The licensee must pay any fee payable under paragraph (1) within 30 days of the OGA notifying the licensee of the grant of consent unless the OGA notifies the licensee in writing that the licensee may pay the fee at a later date.

Fees payable for determination of oil fields6B.

(1)

A licensee must pay a fee of £1,124 for the determination of an oil field under Schedule 1 to the Oil Taxation Act 1975 (determination of oil fields)5.

(2)

The licensee must pay any fee payable under paragraph (1) within 30 days of the OGA notifying the licensee of the determination unless the OGA notifies the licensee in writing that the licensee may pay the fee at a later date.

Fees payable for metering examinations and tests6C.

(1)

For any examination or test of an appliance used to measure petroleum listed in the first column of the table following paragraph (3) which is undertaken by or at the direction of the OGA, the licensee must pay the corresponding fee in the second column of that table.

(2)

The licensee must pay any fee payable under paragraph (1) within 30 days of the OGA notifying the licensee of the amount due unless the OGA notifies the licensee in writing that the licensee may pay the fee at a later date.

(3)

In the table, “seaward area production licence” has the meaning given in regulation 2 of the Applications Regulations.

Fees payable for metering examinations or tests

Type of metering examination or test

Fee payable

Metering examination under a seaward area production licence

£2,534

Metering examination under a petroleum exploration and development licence

£2,994

Meter flow calibration

£1,612

Fees payable for approval of well or installation operators6D.

(1)

A licensee must pay a fee where—

(a)

the licensee applies to the OGA for approval of the appointment of a well or installation operator;

(b)

the OGA consults the competent authority under regulation 5(3) of the Offshore Safety Directive Regulations; and

(c)

the OGA approves the application in accordance with regulation 5(1)(a) of those regulations.

(2)

The amount of the fee under paragraph (1) is the sum of the fees charged by the competent authority under the following provisions when providing advice in accordance with the competent authority’s functions as a consultee—

(a)

section 13(6) of the Health and Safety at Work Act 19746 (powers of the executive), and

(b)

regulation 13A of the Offshore Safety Directive Regulations (fees)7.

(3)

The licensee must pay any fee payable under paragraph (1) within 30 days of the OGA notifying the licensee of the determination of the application unless the OGA notifies the licensee in writing that the licensee may pay the fee at a later date.

(4)

Any fee payable under paragraph (1) is in addition to the fee payable for appointment of an operator under a petroleum licence under regulation 6.

(5)

In this regulation, “competent authority” means the Health and Safety Executive and the Secretary of State, acting jointly.”.

Consequential amendments to Petroleum Licensing Model Clauses3.

In the following provisions, omit the words after “direction”—

(a)

paragraph 14(5) of the Schedule to the Petroleum Licensing (Production) (Seaward Areas) Regulations 2008 (model clauses – measurement of petroleum)8, and

(b)

paragraph 13(5) of Schedule 2 to the Petroleum Licensing (Exploration and Production) (Landward Areas) Regulations 2014 (model clauses – measurement of petroleum)9.
Nick Hurd
Minister of State
Department for Business, Energy and Industrial Strategy
EXPLANATORY NOTE
(This note is not part of the Regulations)

These Regulations amend the Oil and Gas Authority (Fees) Regulations 2016 (S.I. 2016/904) (“the Fees Regulations”), which make provision for the Oil and Gas Authority (“the OGA”) to charge fees, and make consequential amendments to other legislation.

Regulation 2(3) amends regulation 3 of the Fees Regulations (applications prescribed for purposes of section 12(1)(d) of the Energy Act 2016) to prescribe additional applications for which the OGA may charge a fee. These are applications made by the holder of certain petroleum licences for approval of the appointment of a well or installation operator; consent to a retention area proposal (where consent is granted); consent to a development area proposal (where consent is granted); consent to extend a term of a petroleum licence or the final phase of the initial term; and consent to amend a work programme. Regulation 2(2) inserts the relevant definitions in regulation 2 of the Fees Regulations (interpretation).

Regulation 2(4)-(5) amends regulation 4 of the Fees Regulations (fees payable for consents and pipeline works authorisations) and omits regulation 5 (requests to determine fees under regulation 4) to increase to £595 the daily rate in the formula for calculating the applicable fee and to provide for charging on the basis of the actual costs incurred in determining an application instead of an estimate.

Regulation 2(6) inserts a new table in regulation 6 of the Fees Regulations (fixed fees payable for other consents) including new fixed fees for applications for consent to extend a term of a petroleum licence or the final phase of the initial term and consent to amend a work programme. It also increases the existing fees to reflect increased resource costs.

Regulation 2(7) inserts new fixed fees for applications for consent to a retention or development area proposal (where consent is granted); consent to determination of an oil field; and metering examinations and tests. It also inserts the methodology for calculating the new fee for applications for approval of the appointment of well or installation operators.

Regulation 3 amends the model clauses for petroleum production licences to omit the existing provision for charging fees and expenses for metering tests or examinations, which is replaced by the fee introduced by these Regulations.

A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sectors is foreseen.