UK: Energy Update 14 March 2013

Last Updated: 3 April 2013
Article by Publications Field Fisher Waterhouse

Welcome to this edition of Field Fisher Waterhouse's Energy Update which contains a selection of articles on the sector together with our commentary. I hope you will find this of interest.

Europe to further regulate offshore oil and gas operations

The European Parliament intends to introduce further regulation of offshore oil and gas operations with the hope of avoiding major accidents in EU waters.  After lobbying it is proposed that an EU directive (as opposed to EU regulation) will be passed.  This is welcomed as it will allow each member state a degree of discretion over how the law is implemented.

For Field Fisher Waterhouse's thoughts on the legislation click here 

Governments Response to GPSS public consultation

The Energy Bill includes the Government's proposed sale of the Government Pipeline and Storage System (GPSS) and this is now firmly on the radar of those who use the GPSS to transport and store fuel around the UK, or who have infrastructure which interfaces with the GPSS.  A number of clients are now investigating: (i) how any sale might affect pipeline crossings already in place; (ii) what the rights of affected landowners and rights holders would be following the changeover; and (iii) what issues (property and commercial) arise when dealing with private v GPSS infrastructure interfaces. For the draft legislation enabling the sale, the guidelines issued by the MOD and the Government's response to matters raised during the consultation process click here

Earth Sciences Study Centre project near Lyme Regis

On Thursday 7th March FFW's Energy Team sponsored a dinner at the Natural History Museum held to raise interest in a project to build an Earth Sciences Study Centre near Lyme Regis, the aim of which will be to encourage youngsters to become the next generation of geoscientists via outdoor field studies along the Jurassic Coast.  The project partnership is being led by the Lyme Regis Development Trust, the Field Studies Council, the Jurassic Coast Partnership and the Natural History Museum.  Lord Browne hosted the evening and many distinguished guests attended from the Partnership, the Museum, academia and the oil and gas community.  Anyone interested in finding out more should contact FFW partner Tim Bird, who will put you in touch with the project team. For more information on the project click here.

UK Onshore Shale Gas Well Guidelines

With the potential for significant shale gas exploration activity within the UK over the coming years, the United Kingdom Onshore Operators Group has published guidelines for UK Onshore Shale Gas Wells. The Guidelines require, amongst other things, operators to disclose all chemical additives to fracturing fluids on a well by well basis, regulatory authorisations, safety data and maximum concentrations and volumes.  While not replacing a need for compliance with the relevant regulations, the guidelines are useful in helping to establish industry best practice. For a copy of the guidelines click here.

Discussion on fracking and the planning regime at the House of Lords

The Growth and Infrastructure Bill is currently before the House of Lords. Here is the report of the committee's discussion in relation to fracking and the appropriate planning regime. See in particular column 64 and 65 of the Hansard link.

Marine Engineering Partnership becomes Employee Owned

We have advised a company providing engineering consultancy services to the offshore and sub-sea industry, on becoming an employee owned company.  This is a new model of corporate ownership which is increasingly popular, as statistically employee owned businesses outperform other forms of business.  The company hopes the change will ensure that the best talent is retained. For more information click here.

Disclosure of tax structuring advice

Taxation of energy clients is particularly complicated, as it involves the application of various provisions and reliefs that are specific to the sector.  Tax structuring is a key part of many projects, as the applicable tax treatment can determine the economic viability of the project.

HMRC has extremely wide powers to obtain documents and information during the course of any enquiries. Managing that process can be as important as the original tax advice. Amongst other matters, it needs to be determined whether or not any documents are protected from disclosure by privilege, on the basis that they contain legal advice from a lawyer to his or her client. We represented the Bar Council as intervener in the recent Supreme Court case - R (on the application of Prudential) - that concerned the ambit of privilege in the context of the tax system. For further details see our tax blog

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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