PILOT Summit 2010

The PILOT Summit held in September 2010 brought together more than 100 delegates from the wider oil and gas industry to discuss the issues that are currently uppermost in the UKCS. Representatives from across the industry attended to flesh out the highlighted issues and consider which of these PILOT could impact on. The objectives of the summit were to:

• engage with wider representation from across industry
• elicit their views on the work areas for PILOT and outline a potential roadmap
• determine if any other areas should be included in the PILOT work programme
• discuss future PILOT membership/structure/engagement
• ensure the industry feels engaged in the rebooting process of the PILOT forum and work programme

Summit delegates were formed into discussion groups based on questionnaires they had completed, to drill down into specific areas. Led by an industry-and-government expert, the groups thrashed out the topics in greater detail and considered possible routes to resolution of the issues.

The following were identified as probable future issues and discussed in detail at the summit:

• access to infrastructure
• sustaining viable infrastructure
• interface with other seabed users
• UK anchored supply chain
• technology
• supply chain (including exports and skills)
• environment and regulation
• GOM follow up (oil spill response)
• safety
• appropriate regulation
• decommissioning
• stimulating investment
• fiscal concerns 
• advocating the case for oil and gas

Specific outcomes from each summit discussion group are listed below:
 

Decommissioning

1. Decommissioning steering group should examine a range of late-life management solutions, e.g. transfer of maintenance and operational contract to decommissioning contractor or use of facility for CO₂ storage, etc.
2. Commission an independent benchmarking exercise to identify international best practice. Develop an evidence-based case in partnership with NGOs. This will be a lengthy process – the discussion and argument will need to be formulated in time for the 2013 OSPAR meeting.
3. Decom North Sea to work with DECC decommissioning section to develop a database of future decommissioning projects and case material from past projects – to happen over the next 12 months.
    

Stimulating investment

1. Set up a stimulating investment workgroup to identify and define the barriers to investment and determine an appropriate and evidence-based case to take to future meetings with HMT. First milestone to have initial evidence to bring to the meeting at the end of the year.
2. Use PILOT to secure a coordinated statement from Westminster and the Scottish Government to highlight oil and gas as an important constituent in the future energy mix. Implement an industry-led campaign to inform the public about the fundamental necessity of oil and gas to our everyday lifestyles.
3. Establish a sub-group to develop an industrial policy for the future of the basin. Clearly identify the size of the prize.

Supply chain and technology

1. Establish a workgroup to look at the case for incentivising incremental production beyond what is currently deemed possible from each individual producing asset. This would be a long-term and complex initiative, but could be a mechanism to drive innovation on recovery rates. Workgroup should also examine the innovative technologies (i.e. through tubing drilling, etc) that have the potential to make a substantial difference to the basin.
2. Industry to develop a value-based contracting model (this was considered a role for industry).
3. Communicate the opportunities and developments in the UKCS to enable supply chain to plan ahead. Drive investment and set targets (a role for government, with plans already in place).

Infrastructure

1. Use the existing Changing Gear workgroup to examine the case for an element of regulation for the Access to Infrastructure code of practice and also for industry to look for an improved mechanism to conclude deals more rapidly on access to infrastructure.
2. Commission a study to identify current and future critical hubs, both in terms of processing and transportation.
3. Detail a lifespan survey to determine when infrastructure needs significant investment, to maintain integrity and safety.
4. Consider a study to establish likely prospectivity for each area, to ensure consideration of extra capacity being built into all new and upgraded infrastructure to cope with future production.
 

Environment

1. Demonstrate and promote our competence and be transparent.
2. Include as part of the study into infrastructure and its lifespan (see above).
3. Facilitate discussions with Treasury and EU ETS policy officials. Further, pursue the case for carbon leakage.
4. A balanced position to be presented to the Crown estate to ensure the most economically significant developments are given priority.

• Read the notes from the PILOT Summit 2010