Legally binding plans for 'maximising' North Sea oil and gas recovery published

Once in force, the strategy would impose a binding obligation on industry, government and the regulator to "maximise economic recovery of petroleum in relevant UK waters" when carrying out their activities. It would apply to anyone awarded an offshore petroleum licence, to operators appointed under those licences and operators of 'upstream' petroleum infrastructure, and to those responsible for "planning and carrying out the commissioning" of upstream infrastructure.

"The oil and gas industry is essential to our plans to provide secure, reliable energy to UK homes and we are committed to backing it," said energy minister Andrea Leadsom. "There are still plenty of opportunities in the UK Continental Shelf, and the measures set out in this strategy will help us get the most out of it and continue to compete globally."

The draft strategy sets out a number of 'supporting obligations' which clarify how the general obligation to maximise economic recovery would apply in different circumstances. These include exploration, owning and operating infrastructure, use of new and emerging technologies and decommissioning. It also sets out required actions and behaviours through which market participants would be able to demonstrate compliance with their obligations, as well as some "fundamental safeguards" for the industry.

Many of the obligations created by the strategy emerged from the recommendations of the Wood Review, conducted by industry expert Sir Ian Wood in his 2014 report to government. The OGA was also established in response to the review. It began work on 1 April this year.

Once in force, the strategy will be "transparently integrated" into the work of the OGA and will "set the tone for the [North Sea] basin and will be a key factor determining its attractiveness to industry and investors", according to the consultation document. Once powers set out in the Energy Bill are finalised, the OGA will be able take enforcement action against market participants for breaches of the strategy – up to and including revocation of a licence or operatorship.

According to the draft, the strategy should be read "as part of a wider regulatory regime that covers not just licensing but also environmental and health and safety legislation" and is not intended to cut across these obligations. In addition, it does not give the OGA powers to intervene directly in private contracts or to compel companies to make investments "in which there will not be a satisfactory expected return on investment". Further safeguards included in the strategy are intended to protect investors by ensuring that obligations cannot be imposed where "the immediate direct benefit would be outweighed by the resulting damage to investor confidence".

Industry body Oil and Gas UK said that it looked forward to "engaging fully with industry and government" in developing the strategy.

"There are up to an estimated 20 billion barrels of oil and gas to be recovered from our offshore waters, around eight billion barrels of that is natural gas," said its chief executive, Deirdre Michie.

"The government's commitment to help provide the right business environment for its recovery sends the right signals to investors in Britain's oil and gas industry and will help foster technology innovation and preserve hundreds of thousands of highly skilled jobs in the supply chain across the country, as well as contributing to energy security of supply," she said.

The Department of Energy and Climate Change (DECC) is consulting on the draft strategy until 8 January 2016. It plans to present a final version to parliament early next year.