The Oil and Gas Authority (Levy) and Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2019

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations make provision for calculating and imposing a levy on the holders of petroleum licences in respect of the period beginning on 1st April 2019 and ending on 31st March 2020 (“the relevant charging period”). The levy is payable to meet costs incurred by the Oil and Gas Authority (“the OGA”) in carrying out its functions as well as costs incurred by the Lord Chancellor in connection with the provision of Tribunals to consider appeals against the decision of the OGA.

These Regulations also make provision to increase certain fees charged in relation to activities carried out by the Secretary of State relating to environmental regulation of the offshore oil and gas industry.

Regulation 3 sets out liability to pay the production levy for the relevant charging period. This is the highest rate of levy and is to be paid in respect of any offshore production licence which is held by a licensee at the relevant time provided that the criterion at regulation 3(2) is satisfied (the licensee is at the relevant time producing petroleum or has received all necessary consents and approvals to do so). The regulation also makes provision for joint and several liability when the licensee is more than one person.

Regulation 4 sets out liability to pay the non-production levy for the relevant charging period. The non-production levy is to be paid in respect of any offshore exploration licence which is held by a licensee at the relevant time or any offshore production licence held by a licensee at the relevant time in respect of which the criterion at regulation 3(2) is not satisfied. Paragraphs (2) and (3) provide that micro-enterprises holding promote or innovate licences at the relevant time in certain circumstances qualify to pay the non-production levy at discounted rates in respect of those licences. Where the licensee is more than one person, paragraph (4) makes provision for joint and several liability and also provides that a licensee only qualifies as a micro-enterprise when each of the parties to the licence is a micro-enterprise.

Regulation 5 provides the methodology for calculating the production levy and the non-production levy.

Regulations 6 to 8 provide for the process by which licensees are notified as to the amount of levy payable, for interest to be payable on late payments and for the OGA to be able to take action to recover any unpaid levy as a civil debt.

Regulation 9 requires the amount of the levy to be paid by licensees under regulation 3 or 4 to be adjusted if the total amount of levy to be recovered under these Regulations exceeds the leviable costs incurred by the OGA and Lord Chancellor in respect of the relevant charging period.

Regulations 10 to 13 increase the hourly rates used to calculate fees charged under:

(a) the Offshore Petroleum Production and Pipe-lines (Assessment of Environmental Effects) Regulations 1999 (S.I. 1999/360);

(b) the Offshore Petroleum Activities (Conservation of Habitats) Regulations 2001 (S.I. 2001/1754);

(c) the Offshore Petroleum Licensing (Offshore Safety Directive) Regulations 2015 (S.I. 2015/385);

(d) the Pollution Prevention and Control (Fees) (Miscellaneous Amendments and Other Provisions) Regulations 2015 (S.I. 2015/1431), which makes provision for charging fees:

(i) relating to certain activities under the Merchant Shipping (Oil Pollution Preparedness, Response and Co-operation Convention) Regulations 1998 (S.I. 1998/1056), the Offshore Installations (Offshore Safety Directive) (Safety Case etc.) Regulations 2015 (S.I. 2015/398) and the Fluorinated Greenhouse Gases Regulations 2015 (S.I. 2015/310);

(ii) relating to certain licences under regulation 55 of the Conservation of Offshore Marine Habitats and Species Regulations 2017 (S.I. 2017/1013);

(iii) in connection with consents to locate under section 82A of the Energy Act 2008 (c.32), and emergency safety notices under sections 82F and 82G(8) of the Energy Act 2008;

(iv) in respect of monitoring compliance with the requirements of the Energy Savings Opportunity Scheme Regulations 2014 (S.I. 2014/1643); and

(v) for applications for certain licences under section 71 and for stop notices and emergency safety notices under sections 102-105 of the Marine and Coastal Access Act 2009 (c.23).

Each of those fees is calculated by first determining the number of hours work carried out by specialist and non-specialist officers and then multiplying those numbers by the relevant hourly rate. In each case these Regulations increase the hourly rate for specialist officers from £168 to £183 and for non-specialist officers from £82 to £98.

A full impact assessment has not been produced for this instrument as no or no significant impact on the private, voluntary or public sectors is foreseen. An impact assessment was produced for the original levy regulations, the Oil and Gas Authority (Levy) Regulations 2015 and is available from the Department for Business, Energy and Industrial Strategy at 1 Victoria Street, London SW1H 0ET and on www.legislation.gov.uk.