Oil and Gas Authority Chief Executive (Appointment)

Ed Davey Excerpts

Thursday 6th November 2014 Written Statements

[The Secretary of State for Energy and Climate Change (Mr Edward Davey)]

The UK’s oil and gas industry is of national importance: a key contributor to growth, jobs, tax revenue and energy security. The industry supports 450,000 jobs directly or indirectly and paid £4.7 billion in direct taxes in 2012-13.

Around 42 billion barrels of oil and gas have so far been produced from the UKCS, and around 20 billion could still be discovered. Although peak production is now behind us, we must maintain our momentum and make the most of the huge opportunity that the UKCS still represents.

To ensure we maximise the economic recovery of the UK’s oil and gas resources, in 2013, I commissioned Sir Ian Wood to lead a review into the challenges the oil and gas industry is currently facing.

Sir Ian published his final report on 24 February 2014. His key finding was that Government—both HM Treasury and the regulator—and industry must adopt a cohesive tripartite approach to develop and commit to a new, shared strategy of maximising economic recovery for the UK (MER UK) to maximise the huge economic and energy security opportunity that lies off UK shores. Sir Ian also recommended that DECC should create a new arm’s length body to undertake the role of economic regulator as we move into the next phase of the UKCS, and that the new regulator should seek a number of commitments from industry in areas such as committing to the MER UK strategy, more efficient sharing of infrastructure and improving collaboration.

Government have accepted Sir Ian’s recommendations in full and we are making good progress in implementing them, including establishing a new arm’s length body: the Oil and Gas Authority (OGA), which will be headquartered in Aberdeen.

Today, I am delighted to announce the appointment of Andy Samuel as chief executive officer of the OGA. This is a significant milestone in the establishment of the OGA and demonstrates our commitment to the UK’s oil and gas industry and implementing Sir Ian’s recommendations.

Andy is an outstanding candidate and brings a wealth of relevant experience to the role having previously held senior positions within the oil and gas industry, most recently as managing director of BG PLC’s exploration and production in Europe.

Andy has a strong technical understanding of the oil and gas industry, both nationally and internationally and also, crucially, holds significant credibility within the industry. Andy also has considerable experience with regard to rebuilding and reshaping companies, which will be vital as he guides the initial stages of the OGA. I am confident that Andy has the right skills, leadership qualities and commercial and fiscal understanding to ensure the success of the OGA.

Andy will begin this role in early January 2015 and will play a pivotal role in shaping and establishing the new body he will lead. The OGA will be formally established as an Executive agency in April 2015 to ensure we are maximising economic recovery of our oil and gas resources.

We continue to make strong progress in implementing all of the Wood review’s recommendations. We have launched the recruitment of new technical staff to expand our existing capability and capacity within the teams in DECC which will move to the OGA. We are also in the process of recruiting a chair, who will be instrumental during the establishment of the OGA.

We have introduced clauses into the Infrastructure Bill which provide for a levy to fund the new body and which place a duty on the Secretary of State to establish, with the industry, a strategy for delivering MER UK.

In the spirit of the tripartite approach, we have today published the “Wood Review Implementation Call for Evidence” to consult key sector stakeholders on how Sir Ian’s recommendations can be best implemented. The views sought will be essential in helping to inform the policy and legislation required to implement the Wood review recommendations in an efficient and practical way.

The substantial progress we have made since the final review was published in February 2014 demonstrates the Government’s commitment to the future of the oil and gas industry.