The OGA Strategy (“Strategy”) is clear that operators and licensees should develop good environmental, social and governance (“ESG”) practices in their plans and daily operations.
Furthermore, the Strategy has introduced a new Governance supporting obligation which states that licensees of an offshore license must apply good and proper governance at all times, including complying with any governance principles and practices as the NSTA may from time to time direct.
In doing so, they will also meet investor requirements, as vital climate-related information will be included alongside other key metrics in oil and gas operators and licensees’ financial reports.
Corporate Governance
Guidance
The Oil and Gas Authority (OGA) sought views on the OGA’s proposed Governance Guidance, in particular from those who will be required to act in accordance with the Strategy. The 8-week consultation, which was conducted between 20 September and 12 November 2021, can be found here.
On 13 January 2022 the OGA published its consultation response document which can be viewed here. This summarises the responses received and sets out the OGA response to the feedback.
NSTA Governance Guidance, published 13 January 2022 can be viewed here.
Fitness Criteria
Set out within the Governance Guidance is a requirement on Licensees to have knowledge of and ensure compliance with the OGA’s requirements as to fitness of persons (legal and natural) who exercise control over the Licensee.
The ‘fitness’ of existing and prospective licensees, Directors and individuals involved in the management of licensees, as well as those who control licensees, is critical to the NSTA’s statutory duties and objectives. The NSTA may therefore consider the fitness of a licensee and/or persons controlling a licensee whenever an application for a licence is made, or where a licensee intends to take on or extend a commitment or obligation, for example on an assignment or change of control. The NSTA may also decide to investigate the issue on its own initiative, for example, following a review of corporate governance. Details of the NSTA’s general approach to assessing the ‘fitness’ of licensees, Directors of licensees, and individuals involved in the management of licensees; and of those who control licensees can be found here.
The NSTA has set out its fitness criteria here.