Operatorship

All licences, with the exception of “Innovate Licences” (i.e. those issued in the 29th Round and since) in Phase A or B of the Initial Term, require an approved Licence (Exploration) Operator.  A Licence (Exploration) Operator must be appointed, and approved, for the licence to enter Phase C.

The operator must demonstrate the competence and capacity, in accordance with the principles of the OGA Strategy, to plan, organise, supervise or conduct, on behalf of the participants (the licensees), the activities permitted under the terms of the licence.

Process for requesting OGA approval

The petroleum e-business assignments and relinquishment system (PEARS) is part of the UK Energy Portal and is the conduit for requesting NSTA approval of the proposed Licence (Exploration) Operator appointment.

Information to be provided

The NSTA recognises potential operators can vary significantly, in terms of history and experience, ranging from local business units of established multi-nationals with a long UK presence to small independents seeking their first UK licence. 

As such, the NSTA considers it inappropriate to have “a one size fits all” approach with a prescriptive list of requirements. 

The potential operator must convince the NSTA that it has a suitably qualified management team and an appropriate organisation in terms of structure and skills to plan and conduct exploration activities.

It is recommended that potential operators discuss the NSTA’s requirements at the earliest opportunity and, as a minimum, provide the following:

• corporate overview in terms of history and scale
• corporate structure (at UK level and the UK in the context of global operations)
• description of the hierarchy of decision-making responsibility between the UK affiliate and head-office
• organisation chart and management team bios
• summary of relevant operating experience and the general operating ethos
• synopsis of management system

Subsequent enquiries will be proportionate to the quality and depth of materials provided and a qualitative assessment of comparable experiences

The Field Operator is the entity, on behalf of the field participants (licensees), responsible for planning, organising, supervising or conducting development and/or production operations. 

The licence model clauses oblige the licensee to nominate an entity that has responsibility for organising or supervising all or any of the operations of searching or boring for or getting petroleum in pursuance of the licence.

As such, the Field Operator co-ordinates the Field Development Plan submission and NSTA approval of this entity should be sought when the licensees consider a discovery should be progressed towards development and into production.

Process for requesting NSTA approval

The petroleum e-business assignments and relinquishment system (PEARS) is part of the UK Energy Portal and is the conduit for requesting NSTA approval of the appointment of a Field Operator.  To have an operator, the field must be associated with the underlying licences and the beneficial interests apportioned amongst the participants (licensees).

Information to be provided

The NSTA recognises potential operators can vary significantly, in terms of history and experience, ranging from local business units of established multi-nationals with a long UK presence to small independents who have not previously operated a UK development or production asset. 

As such, the NSTA considers it inappropriate to have “a one size fits all” approach with a prescriptive list of requirements. 

It is recommended that potential operators discuss the NSTA’s requirements at the earliest opportunity in order to convince the NSTA that it has a suitably qualified management team and an appropriate organisation in terms of structure and skills to plan and conduct development and/or production operations.

In broad terms, the NSTA will seek to understand the following:

• corporate overview in terms of history and scale
• corporate structure (at UK level and the UK in the context of global operations)
• description of the hierarchy of decision-making responsibility between the UK affiliate and head-office
• summary of relevant operating experience (i.e. directly applicable to the characteristics of the field – HPHT etc) particularly the breadth of UKCS experience and the general operating ethos
• that the potential operator’s UK organisation contains the job functions required to undertake or supervise the conduct of development and/or production operations on the field
• synopsis of management system

Subsequent enquiries will be proportionate to the quality and depth of materials provided and a qualitative assessment of comparable experiences.

The concept, responsibilities and obligations of a Well Operator or Installation Operator is set out in the 2015 Regs.  It is only applicable to offshore operations.

Only entities that have been appointed pursuant to the 2015 Regs are permitted to conduct petroleum operations or well operations.

The Installation Operator is responsible for petroleum operations; these comprise

• all activities associated with an installation or connected infrastructure, including design, planning, construction, operation and decommissioning thereof, relating to exploration and production of petroleum.

The Well Operator is responsible for well operations; these comprise:

• the planning or drilling of a well, including the recommencement of drilling after a well has been completed, suspended or abandoned by plugging at the seabed; and
• any operation in relation to a well which may result in an accidental release of fluids from that well which could give rise to the risk of a major accident

The licensees are responsible for the timely appointment of a Well Operator and/or Installation Operator.

Process for requesting NSTA approval and information required

Licensees should submit OSD well and / or installation operator nominations via the WIOS portal.

The NSTA consults with the Offshore Major Accident Regulator (OMAR) (a partnership between DESNZ and HSE and the competent authority under the legislation) to determine whether, or not, to object to the proposed appointment.

The request must include:

• The supporting information required by the Offshore Safety Directive Regulator set out in sections 2 and 3 of their document titled “Appendix C: Safety and Environmental Issues - Licensing and Operatorship”

Additional materials and guidance are available from the Offshore Safety Directive Regulator.

Consultation with OMAR takes three months, subject to the receipt of all the necessary documents.

The NSTA will advise the licensees, via WIOS, whether it objects to the proposed operator appointment and, if so, on what grounds.

The Pipeline Operator is the entity, on behalf of the pipeline owners and users, responsible for planning, organising, supervising or conducting activities associated with the operation of the pipeline. 

Process for requesting NSTA approval

Requests are submitted by email (consents@nstauthority.co.uk)

Information to be provided

Applications must use the correct template (https://www.nstauthority.co.uk/licensing-consents/consents/pipeline-works-authorisations/pwa-applications/), unless prior agreement has been given.  All applications require a 28-day consultation period.

It is recommended that potential operators discuss the NSTA’s requirements at the earliest opportunity in order to convince the NSTA that it has a suitably qualified management team and an appropriate organisation in terms of structure and skills to plan and conduct development and/or production operations.

In broad terms, the NSTA will seek to understand the following:

• corporate overview in terms of history and scale
• corporate structure (at UK level and the UK in the context of global operations)
• description of the hierarchy of decision-making responsibility between the UK affiliate and head-office
• summary of relevant operating experience (i.e. directly applicable characteristics of the pipeline and associated infrastructure etc)
• the contingency arrangements for dealing with incidents involving the pipeline. The range of incidents that can be managed and the extent of the associated mitigation measures should take into account the national importance of the pipeline system
• the processes for regular communication with existing users of the pipeline and the arrangements for dealing with the introduction of new users
• the general operating ethos and proposed operations and maintenance strategy
• synopsis of management system

Subsequent enquiries will be proportionate to the quality and depth of materials provided and a qualitative assessment of comparable experiences.

HSE notification

Changes to pipeline operators must be notified to the Health & Safety Executive; more information can be found at: www.hse.gov.uk/pipelines/notification.htm

As operator appointments are usually associated with other authorisations, consents or approvals (e.g. continuation of the licence into Phase C within the Initial Term; well consent; field development plan; or licence assignments) the NSTA does not ordinarily have a requirement to assess the financial capacity of Licence (Exploration) Operators or Field Operators in isolation. 

Notwithstanding this, should the participants seek approval to a new Field Operator or Pipeline Operator after approval of a field development plan (i.e. during either the development or production phase) the NSTA may seek such information, consistent with the published Financial Guidance, to ascertain the financial capacity of the proposed operator