Onshore operatorship

How to gain approval from the OGA as an operator as an onshore operator requires the use of “good oilfield practice”.

Licensees and operators are encouraged to be a member of the UK Onshore Operators Group, who have worked with the OGA and other regulators to publish shale gas well guidelines which contain what is considered to be good industry practice and reference the relevant legislation, standards and practices.

The onshore sector differs from the offshore in that the OGA has no responsibility for onshore environmental legislation. Responsibility for this lies with the Environment Agency, Natural Resources Wales, Scottish Environment Protection Agency and the local mineral planning authority.

Operator Competence Requirements

In considering any request for operatorship, the OGA will look at the competence of the company – more specifically the following factors: technical experience and capability to supervise, manage and undertake the proposed operation, their risk-assessment and hierarchy of decision-making, plans for public engagement and scope of relevant insurance coverage for operations and well abandonment activity. In some cases, the OGA may request independent verification.

There is no fixed amount of information the OGA requires to be satisfied of a proposed operator’s competence. Unconventional gas and oil activity will require more detail than conventional activity. Clearly a new entrant or small company with little onshore experience should expect to come under greater scrutiny and will have to provide more information than an established onshore operator with a good record. . Introduction of new technologies by the operator or their contractors will require more information.

Checklist of information required for Onshore Operators

Below is a checklist outlining the information the OGA requires for Unconventional Gas and Oil activity. Parts may not be relevant for conventional oil and gas or vent gas operations. 

Anyone wishing to discuss a particular case, and the criteria that the OGA will apply, should contact:
Toni Harvey toni.harvey@ogauthority.uk - Onshore Exploration and Production Operatorship;

Company details

  • UK Registered name, address and company number
  • UK places of business – addresses, contact email and telephone numbers
  • Website address and, during operations, a 24-hr telephone response line for members of the public
  • Identify primary contact for the OGA and accountable Board member (email and telephone numbers)

Previous operating experience

  • Details of previous experience of supervising or carrying out unconventional drilling operations within the past two years including location and description of the company’s responsibilities for those operations
  • Details of unconventional production within the past five years including location and description of the company’s development responsibilities
  • Details of the proposed operator’s relevant crisis management and public engagement experience
  • Track record of sub-contractors proposed for the development and audit plan for subcontractors

Management Structure and Strategy

  • Corporate governance including names of the Board of Directors and Management Team and reporting roles
  • Organisational chart noting role, location and identifying use of contractors
  • Summary of approach to risk-assessment and hierarchy of decision-making for wellsite and production operations
  • Monitoring and crisis management plan
  • Community engagement plan
  • Summary of environmental risk management and potential impacts and assessments that would have to be managed during execution of the proposed work

People

  • Provide CVs of the key personnel involved in decision-making, including their previous experience and the basis on which they are employed (e.g. part-time or contracted)
  • Identify primary individuals responsible in key roles including geotechnical, health and safety, interaction with Local Planning Authorities, public engagement, environmental and drilling expertise describing which skills exist in-house and those that are contracted.

Use of contractors

  • List areas of technical assessment or drilling management activity to be outsourced to contractors, and the name(s)of contractor(s) and contact information. Note that Operators must retain overall responsibility and cannot subcontract their risk management responsibility.
  • Description of operator’s relationship with the contractor (who is responsible for what, and who makes the decisions? Who will monitor and supervise the contractors? In particular, what arrangements are in place to deal with any unexpected incident?)

Hydraulic Fracturing (if planned)

Provide a scoping plan for robust and comprehensive design and monitoring procedures to mitigate against frac-induced seismicity and to monitor fracture growth which integrate all emerging evidence to ensure that fracking is safe, well integrity is monitored and that the local environment is protected. A detailed Hydraulic Fracture Programme to address the risk factors for each well is required as part of the application for well consent. See the UKOOG shale gas well guidelines for detail.

Insurance

In considering any request for operatorship, The OGA will look at the scope of relevant insurance coverage.

Finance

There are no specific financial criteria for operators other than those applied by the OGA to operators in their capacity as licensee. Financial viability and capacity checks are made for any new licensee. The OGA must be confident that any company is likely to continue in sound financial health for the foreseeable future, and the company must demonstrate that it has access to sufficient funds to pay for its share of all the elements of the proposed Work Programme (whether those elements are Firm or “Drill-or-Drop” commitments). Contact Nic Rogers or see Criteria To Become A Licensee. for more information