Environmentalists warn of close ties between oil and gas sector and UK North Sea regulator | Fossil fuels



Campaigners warned that the close ties discovered between the oil and gas industry and Britain’s North Sea regulator, which is responsible for licensing the new fields, risked an overly ‘comfortable’ relationship that could affect the process of decision making.

Three of the 13 members of the Oil and Gas Authority’s board and management team have significant stakes in oil companies, amounting to around £ 225,000, and eight of the 13 previously worked in the oil and gas industry, the ferret news site found, in a survey funded by the Uplift Against Fossil Fuels Campaign.

The results throw new controversy over ministers’ support for the biggest round of new oil and gas and licensing developments in years, which unfolds as the UK prepares to host the COP26 climate talks. United Nations in Glasgow in November.

The Oil and Gas Authority told The Guardian that its board of directors is made up of professionals from a variety of backgrounds, including oil and gas, and stressed that their knowledge and expertise is essential to help regulate a specialized industry. .

Mel Evans, head of oil and gas transition at Greenpeace UK, said: “The OGA looks awfully at home with the industry. How can a supposedly impartial regulator play its role, taking climate science into account, with such a huge presence of the ex-oil industry and constant vested interests in maintaining the status quo on extraction oil and gas? “

Greenpeace is contesting the license for the Cambo oil field, near the Shetlands, which Shell and Siccar Point Energy plan to operate under a permit originally granted in 2004. This month, government lawyers told the court that concerns about climate change were “irrelevant” to petroleum licensing decisions.

Another group, Paid to Pollute, is also suing the government, opposing billions of pounds in taxpayer subsidies to the North Sea industry. Mikaela Loach, advocate and anti-Cambo activist, said: “Those who run the regulator should take advantage of this dangerous path. [of further oil exploration], in the face of clear evidence that it will push us beyond safe climate limits. What we need are people in charge of taking the climate emergency seriously, starting with ending Shell’s plans for the Cambo field.

Caroline Rance, a Friends of the Earth Scotland climate activist, added: “This clear conflict of interest at the heart of OGA leadership is indicative of their complete capture by the very industry they are supposed to regulate. It is completely unacceptable that the OGA is granting its former employers oil and gas licenses that will keep us locked in climate pollution for decades to come. “

The OGA, created in 2015 by the government with the statutory aim of “maximizing the economic recovery of oil and gas resources”, is responsible for issuing licenses for oil and gas exploration in the North Sea. Last September, it awarded 113 licenses to 65 companies in 260 areas of the North Sea.

In February, the organization’s strategy was revised to take into account the UK’s legislative target of achieving net zero greenhouse gas emissions by 2050. It is unclear how the work of the organization works. ‘OGA will help the government achieve its goal of net zero.

The global energy watchdog, the International Energy Agency (IEA), warned in May, in a government-commissioned report, that all exploration and development of new fossil fuel resources must cease. from the end of this year if the world wants to stay within 1.5C of global warming, the stated objective of the government at Cop26.

Alok Sharma, the minister in charge of Cop26, told the Guardian last month that new oil and gas developments in the North Sea were compatible with IEA advice, as they would have to pass a ‘climate checkpoint’ for licenses to be granted.

According to public reports filed in July, the three members of the OGA Board of Directors with stakes in oil companies, estimated to total £ 225,000 based on share value as of March 31 of this year, are the chairman of the ‘OGA, Tim Eggar, and non-executive directors Frances Morris-Jones and Iain Lanaghan.

Eggar, a former Conservative energy minister, owned shares worth £ 57,600 in oil services company MyCelx, of which he served as non-executive chairman for 10 years until July. His wife owned £ 12,000 in BP and £ 25,000 in Shell, one of the companies seeking to exploit the Cambo oil field.

Morris-Jones, who is expected to step down on the regulator at the end of the month, held more than £ 100,000 in ConocoPhillips, the US oil company, and £ 55,000 in BP, according to the documents.

Lanaghan, a former CFO, held shares worth almost £ 5,000 in Shell and £ 3,000 in BP.

Andy Samuel, managing director of OGA and a former senior executive at gas company BG Group, placed his oil and gas stocks in a blind trust before taking office in 2015. The trust was dissolved, according to the ‘OGA. , and Samuel no longer holds any stocks of oil and gas.

Four other senior OGA executives have close ties to the oil and gas industry. Tom Wheeler, director of regulation at OGA, is a former legal advisor to ExxonMobil. Sarah Deasley, a non-executive director, is a director of Frontier Economics, a consultancy with British Gas and Phoenix Natural Gas as clients. Scott Robertson, COO, and Stuart Payne, Director of Supply Chain, Decommissioning and Human Resources, were previously senior executives at Dana Petroleum, owned by the Korea National Oil Corporation.

Robertson was also a senior executive at BP, and Payne was previously vice president of human resources at Shell.

At least two former members of the OGA leadership team have taken on new roles in the energy sector after leaving the regulator, creating the impression of a “revolving door” that could allow former regulators to ” help advise oil and gas companies on potential future developments.

Robert Armor, a member of the board of directors who resigned last September, is today the director of an energy consulting firm and president of an energy company from waste. Gunther Newcombe, director of operations until April 2020, is a consultant to Malaysian oil company Hibiscus Petroleum.

An OGA spokesperson told The Guardian: “The OGA Board of Directors is made up of highly experienced professionals from a variety of backgrounds. Of course, a number of these people have direct experience working in the oil and gas industry. Their knowledge and expertise are essential for the OGA to regulate what is a highly specialized industry. They are complemented by directors who bring knowledge from other industries and other regulators.

The OGA also pointed out a disclaimer in its Annual accounts 2020-21 released in July. The actions of the board members were not “important enough to interfere with their independent judgment in board discussions,” he said. “The board of directors does not consider that a decision falling within the powers of the OGA could have a significant impact on the value of their shares.”

The OGA added: “The directors must declare any financial interests which may, or may be perceived to influence their judgment in the performance of their duties as directors of the OGA. This is done by appointment and annually.

“Directors are also invited to declare any conflict of interest at the start of each board meeting. If a director declares a conflict of interest with an item on the agenda, he will not participate in the discussion of that item.


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