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.
The UK Energy Portal is the conduit for requesting NSTA approval of the appointment of an operator.
The NSTA has the power to revoke operator approval where the entity no longer has the competence or capacity to meet the requirements for the operations in respect of which it was appointed.
The operator is appointed by the parties to the licence but does not need to be a licensee, i.e. it could by an affiliate or a third party. The operator’s role is to plan, organise, supervise or conduct the activities permitted under the terms of the licence.
NOTE: A fee is charged for NSTA consideration of the application to appoint an operator; further information on this can be found here.
Onshore Operations
The process to apply for approval for an Onshore operator has a defined process. Details of this process can be found here.
Offshore Operations
‘Operator’ has a number of specific meanings each being subtly different, and requiring NSTA approval:
- Licence (Exploration) Operator; and
- Field Operator
Approval relates only to the operator’s competence and confers no permission to produce hydrocarbons or drill exploration or development wells.
Offshore pipelines are subject to the provisions of the Petroleum Act 1998; the Pipeline Operator has responsibility for organising, supervising or undertaking all operations. The associated Pipelines Works Authorisation obliges the parties to appoint an operator and obtain the written consent of the NSTA.
The 2013 EU Offshore Safety Directive was the direct response to the Deepwater Horizon accident in the Gulf of Mexico and introduced the additional operator concepts of:
- Well Operator; and
- Installation Operator
The directive was implemented into UK law by The Offshore Petroleum Licensing (Offshore Safety Directive) Regulations 2015 (“the 2015 Regs”). The licensees are responsible for nominating a Well Operator and/or Installation Operator. Operator approvals are on a standalone basis (i.e. specific to a licence, field, block, well or installation) and independent of approvals of Licence (Exploration) Operator, Field Operator, or Pipeline Operator
The Well and Installation Operator Service (WIOS) System of Record lists current OSD well and installation operator appointments. It is accessible to all here. For more detail, please refer to the NSTA’s Offshore Safety Directive guidance.
Following the Offshore Safety Act 1992, health and safety has not been a factor the NSTA assesses when considering the competence of a proposed operator; such matters are the responsibility of the Health and Safety Executive.
Note: Each Operator type requires separate application and approval.
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, all other licences require an approved Licence (Exploration) Operator. As per the Stewardship Expectation ‘SE2 Delivering Exploration and Appraisal Work Programme’, a Licence (Exploration) Operator must be appointed, and approved by the NSTA, for the licence to enter Phase C.
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.
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 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 proposed Licence (Exploration) Operator appointment.
New licences which commence at Phase C or Straight to Second Term require a nomination as part of the application process.
Information to be provided
The potential operator must demonstrate that it has a suitably qualified management team and an appropriate organisation in terms of structure and skills to plan and conduct exploration activities.
The NSTA will look at the governance structure, systems and technical competence of the company.
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 potential operator must demonstrate 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.
NSTA will look at the governance structure, systems and technical competence of the company.
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
- 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 offshore 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
WIOS is part of the UK Energy Portal and is the conduit for requesting NSTA approval of the proposed well and / or installation operator; it is accessible via the WIOS portal.
The NSTA consults with the Offshore Major Accident Regulator (OMAR) (a partnership between DESNZ and HSE, the competent authority under the legislation) to determine whether to object to the proposed appointment.
The request must include:
- The supporting information required by OMAR (“the competent authority”) as 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 OMAR.
Consultation with OMAR could take up to 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.