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Oil and Gas Authority: Consultation on Levy Design

Volume 594: debated on Monday 23 March 2015

Today I am launching a consultation on the design of the levy to fund the new Oil and Gas Authority (OGA).

We are working at a great pace to establish and empower the OGA to be a strong and influential regulator, equipped with the necessary powers to regulate and steward the UK continental shelf.

To ensure the OGA is sufficiently resourced to deliver its remit of maximising economic recovery from the UKCS, and in line with the established precedent for other regulatory bodies, we have determined that the OGA should recover its costs from the companies who benefit from its services.

While the Government have agreed to contribute £3 million per year for five years starting from April 2016 to ensure the OGA is well funded from the outset, the OGA’s ongoing costs will be met by a combination of the extant fees and charges regime, and a new levy on industry. We agree with industry that it is important that the levy is simple, transparent and cost-reflective.

This consultation sets out details of the allocation methodology and the proposed levy rates. In line with the early focus of the OGA, we have determined that initially we will levy only offshore petroleum licence holders as (in the short term) the OGA will incur costs related to these licence holders. We intend that the OGA will begin collecting the levy in October 2015, subject to regulations.

The consultation will be open for four weeks and will conclude on 20 April 2015 and the Government welcome views on the proposals and invites comments through the consultation process.

I will be depositing a copy of this consultation in the Libraries of the House.