Energy Bill

House of Commons

Session 2007 - 08
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Other Bills before Parliament

Energy Bill

Energy Bill
Part 3 — Decommissioning of energy installations
Chapter 3 — Oil and gas installations
54

(4)
But if a notice under subsection (1) requires information in connection
with a function of the Secretary of State under section 107(1) or (4), the
notice may require the provision of information or documents which
the Secretary of State considers are necessary or expedient for the
purpose of exercising those functions (whether or not they are of a kind
5
specified in subsection (3)).
(5)
A notice under subsection (1) must specify the documents or
information, or the description of documents or information, to which
it relates.
(6)
Information or documents required to be provided under this section
10
must be provided within such period as is specified in the notice under
subsection (1).
(7)
In this section, “associated”, in relation to a body corporate, is to be
construed in accordance with section 105A(3) to (8).
(8)
A person who fails, without reasonable excuse, to comply with a notice
15
under subsection (1) is guilty of an offence.
(9)
A person who discloses information obtained by virtue of a notice
under this section is guilty of an offence unless the disclosure—
(a)
is made with the consent of the person by or on behalf of whom
the information was provided,
20
(b)
is for the purpose of the exercise of the Secretary of State’s
functions under this Chapter, the Electricity Act 1989 or Part 4
of the Petroleum Act 1998, or
(c)
is required by or under an enactment.”
Chapter 3
25
Oil and gas installations
67
Persons who may be required to submit abandonment programmes
(1)
Section 30 of the Petroleum Act 1998 (c. 17) (persons who may be required to
submit programmes) is amended as follows.
(2)
In subsection (1)—
30
(a)
after paragraph (b) insert—
“(ba)
a person to whom subsection (5)(a) and (b) applied in
relation to the installation, but who—
(i)
transferred the right mentioned in that
subsection to another person, and
35
(ii)
has not obtained a consent required under the
licence in relation to the transfer;”, and
(b)
in paragraph (e) for “company” in each place substitute “body
corporate”.
(3)
In subsection (2)(c) for “company” in each place substitute “body corporate”.
40
(4)
For subsection (5)(b) substitute—
“(b)
either—

Energy Bill
Part 3 — Decommissioning of energy installations
Chapter 3 — Oil and gas installations
55

(i)
any activity mentioned in subsection (6) is carried on
from, by means of or on the installation, or
(ii)
the person intends to carry on an activity mentioned in
that subsection from, by means of or on the
installation,”.
5
(5)
For subsection (8) substitute—
“(8)
For the purposes of this section, one body corporate is associated with
another if one of them controls the other or a third body corporate
controls both of them; and subsections (8A) to (8D) set out the
circumstances in which one body corporate (“A”) controls another
10
(“B”).
(8A)
Where B is a company, A controls B if A possesses or is entitled to
acquire—
(a)
one half or more of the issued share capital of B,
(b)
such rights as would entitle A to exercise one half or more of the
15
votes exercisable in general meetings of B,
(c)
such part of the issued share capital of B as would entitle A to
one half or more of the amount distributed if the whole of the
income of B were in fact distributed among the shareholders, or
(d)
such rights as would, in the event of the winding up of B or in
20
any other circumstances, entitle it to receive one half or more of
the assets of B which would then be available for distribution
among the shareholders.
(8B)
Where B is a limited liability partnership, A controls B if A—
(a)
holds a majority of the voting rights in B,
25
(b)
is a member of B and has a right to appoint or remove a majority
of other members, or
(c)
is a member of B and controls alone, or pursuant to an
agreement with other members, a majority of the voting rights
in B.
30
(8C)
In subsection (8B)(a) and (c) the references to “voting rights” are to the
rights conferred on members in respect of their interest in a limited
liability partnership to vote on those matters which are to be decided
on by a vote of the members of the limited liability partnership.
(8D)
In any case, A controls B if A has the power, directly or indirectly, to
35
secure that the affairs of B are conducted in accordance with A’s
wishes.”
(6)
In subsection (9)—
(a)
for “subsection (8)” substitute “subsections (8) to (8D)”, and
(b)
for “company” in each place substitute “body corporate”.
40
68
Financial resources etc
(1)
Section 38 of the Petroleum Act 1998 (c. 17) (information and notices) is
amended as follows.

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Part 3 — Decommissioning of energy installations
Chapter 3 — Oil and gas installations
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(2)
For subsection (1) substitute—
“(1)
The Secretary of State may, for a purpose specified in subsection (1A),
give a notice to a person within subsection (1B) requiring the person,
within a time specified in the notice—
(a)
to provide specified information relating to the person’s
5
financial affairs;
(b)
to supply copies of specified documents, or documents of a
specified description, relating to those affairs.
(1A)
Those purposes are—
(a)
determining whether to give a notice under section 29 to a
10
person in respect of an installation or pipeline;
(b)
determining whether to make a proposal under section 34(1) to
impose a duty on a person under section 36;
(c)
where a person has made such a proposal, determining whether
to impose the duty on the person proposed.
15
(1B)
A person falls within this subsection if—
(a)
a notice under section 29(1) may be given to the person,
(b)
the person falls within section 34(2)(a) or (b) and the Secretary
of State is considering proposing, in accordance with section
34(1)(b), that the person should have a duty under section 36, or
20
(c)
the person falls within section 34(2)(a) or (b) and the Secretary
of State is considering whether to impose a duty on the person
under section 36 in accordance with a proposal made under
section 34(1)(b).”
(3)
In subsection (2)—
25
(a)
for the words from “who has” to “that duty” substitute “falling within
subsection (2A) will be capable of carrying out any abandonment
programme which has been submitted (whether or not it is approved)
or may be submitted in relation to an installation or pipeline”, and
(b)
in paragraph (a) after “information” insert “(which may relate to the
30
estimated costs of abandonment of the installation or pipeline or to any
other financial or other matter)”.
(4)
After that subsection insert—
“(2A)
A person falls within this subsection if—
(a)
a notice under section 29(1) has been given to the person, or
35
(b)
the person has a duty under section 36 to secure that an
abandonment programme is carried out.”
(5)
For subsection (4) substitute—
“(4)
The Secretary of State may, after consulting the Treasury, give written
notice to a person to whom subsection (4A) applies, requiring the
40
person to take such action as may be specified in the notice within such
time as may be so specified.
(4A)
This subsection applies to a person if—
(a)
the person falls within subsection (2A), and
(b)
the Secretary of State is not satisfied that the person will be
45
capable of carrying out any duty which has been, or is likely to
be, imposed on the person by section 36.”

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Part 3 — Decommissioning of energy installations
Chapter 3 — Oil and gas installations
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(6)
After subsection (6) add—
“(7)
It is an offence for a person to disclose information obtained by virtue
of a notice under subsection (1) or (2) unless the disclosure—
(a)
is made with the consent of the person by or on behalf of whom
the information was provided,
5
(b)
is for the purpose of the exercise of the Secretary of State’s
functions under this Part, Chapter 3 of Part 2 of the Energy Act
2004 or Part 1 of the Energy Act 2008, or
(c)
is required by or under an enactment.”
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Protection of abandonment funds from creditors
10
(1)
After section 38 of the Petroleum Act 1998 (c. 17) insert—
“38A
Protection of funds set aside for the purposes of abandonment
programme
(1)
This section applies where any security for the performance of
obligations under an approved abandonment programme has been
15
provided by a person (“the security provider”) by way of a trust or
other arrangements.
(2)
Subsection (1) applies whether the security is provided before or after
the programme is approved.
(3)
In this section a reference to “the protected assets” is a reference to the
20
security, and any property or rights in which it consists.
(4)
The manner in which, and purposes for which the protected assets are
to be applied and enforceable (whether in the event of the security
provider’s insolvency or otherwise) is to be determined in accordance
with the trust or other arrangements.
25
(5)
For the purposes of subsection (4), no regard is to be had to so much of
the Insolvency Act 1986, the Insolvency (Northern Ireland) Order 1989
or any other enactment or rule of law as, in its operation in relation to
the security provider or any conduct of the security provider, would—
(a)
prevent or restrict the protected assets being applied in
30
accordance with the trust or other arrangement, or
(b)
prevent or restrict their enforcement for the purposes of being
so applied.
(6)
In subsection (5) “enactment” includes an enactment comprised in, or
in an instrument made under, an Act of the Scottish Parliament.
35
38B
Directions to provide information about protected assets
(1)
The Secretary of State may direct a security provider to publish
specified information about the protected assets.
(2)
A direction under this section may specify—
(a)
the time when the information must be published, and
40
(b)
the manner of publication.
(3)
If a security provider fails to comply with a direction, the Secretary of
State, or a creditor of the security provider, may make an application to
the court under this section.

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Part 3 — Decommissioning of energy installations
Chapter 4 — Wells
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(4)
If, on an application under this section, the court decides that the
security provider has failed to comply with the direction, it may order
the security provider to take such steps as the court directs for securing
that the direction is complied with.
(5)
In this section—
5
“court”—
(a)
in relation to an application in England and Wales or
Northern Ireland, means the High Court, and
(b)
in relation to an application in Scotland, means the
Court of Session;
10
“security provider” means a person who has provided security in
relation to which section 38A applies;
“the protected assets”, in relation to a security provider, means the
security, and any property or rights in which it consists.”
(2)
This section has effect in relation to a trust or other arrangements established
15
on or after 1st December 2007.
Chapter 4
Wells
70
Information about decommissioning of wells
(1)
In Part 5 of the Petroleum Act 1998 (c. 17), before section 46 (Northern Ireland
20
and Isle of Man shares of petroleum revenue) insert—
“45A
Abandoned wells
(1)
This section applies in relation to a person who has drilled, or
commenced drilling, a well in pursuance of a petroleum licence or a
licence under section 3 of the Energy Act 2008 (gas storage and
25
unloading licences).
(2)
The Secretary of State may give a notice requiring the person—
(a)
to provide specified information relating to the person’s
financial affairs, or
(b)
to supply copies of specified documents, or documents of a
30
specified description, relating to those affairs.
(3)
A notice under subsection (2) must specify the time within which the
information or documents must be provided.
(4)
Subsection (5) applies if—
(a)
the person fails to provide information or documents required
35
by such a notice within the period specified in the notice, or
(b)
on receiving information or documents required by a notice
under subsection (2) the Secretary of State is not satisfied that
the person will be capable of plugging and abandoning the well.
(5)
Where this subsection applies the Secretary of State may give the
40
person a notice, after consulting the Treasury, requiring the person to
take the action specified in the notice within the time so specified.

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Part 4 — Provisions relating to oil and gas
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(6)
The Secretary of State may not give a notice to a person under
subsection (5) without first giving the person an opportunity to make
written representations as to whether the notice should be given.
(7)
It is an offence for a person to fail to comply with a notice under
subsection (2) or (5) unless it is proved that the person exercised due
5
diligence to avoid the failure.
(8)
A person guilty of an offence under this section is liable—
(a)
on summary conviction, to a fine not exceeding the statutory
maximum, or
(b)
on conviction on indictment, to imprisonment for a term not
10
exceeding 2 years or to a fine, or both.
(9)
Section 41 (other than subsection (5)) applies in relation to prosecutions
for offences under this section as it applies in relation to prosecutions
for offences under Part 4.
(10)
In this section—
15
“petroleum licence” means a licence under section 2 of the
Petroleum (Production) Act 1934 or section 3 above;
“well” includes a borehole.”
(2)
This section applies in relation to any well the drilling of which commences on
or after the date on which this section comes into force.
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Part 4
Provisions relating to oil and gas
Petroleum licences
71
Transfers without the consent of the Secretary of State
After section 5 of the Petroleum Act 1998 (c. 17) (existing licences) insert—
25
“5A
Rights transferred without the consent of Secretary of State
(1)
This section applies if—
(a)
a person is (or two or more persons are) the licensee in respect
of a licence under section 2 of the Petroleum (Production) Act
1934 (c. 36) or section 3 above (“the transferor”),
30
(b)
the transferor transfers a right granted by the licence, or derived
from a right so granted, to another person (“the transferee”)
after commencement in circumstances where the consent of the
Secretary of State is required for the transfer, and
(c)
that consent is not obtained.
35
(2)
The Secretary of State may, by notice given to the transferor and the
transferee, direct that the right is to revert to the transferor from a date
specified in the notice.
(3)
The date specified must not be earlier than the date on which the notice
is given.
40
(4)
Before giving a notice to a person under subsection (2), the Secretary of
State must—

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Part 4 — Provisions relating to oil and gas
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(a)
notify the person of the proposal to give the notice, and
(b)
give the person a reasonable period within which to make
written representations.
(5)
The Secretary of State may not give a notice under subsection (2) after
the end of the period of 3 months beginning with the date on which the
5
Secretary of State learns of the transfer.
(6)
In this section—
“commencement” means the time when this section comes into
force;
“transfer” does not include a transfer by way of security for a loan.
10
5B
Information
(1)
The Commissioners for Her Majesty’s Revenue and Customs may
disclose to the Secretary of State information relating to the transfer of
a right granted by a licence under section 2 of the Petroleum
(Production) Act 1934 or section 3 above, or derived from a right so
15
granted, for the purpose of enabling the Secretary of State to determine
whether a transfer to which section 5A applies has taken place.
(2)
This section applies despite any statutory or other restriction on the
disclosure of information.
(3)
Information disclosed under this section must not be further disclosed
20
except—
(a)
for the purpose mentioned in subsection (1), with the consent
(which may be general or specific) of the Commissioners,
(b)
in pursuance of an order of a court, or
(c)
with the consent of each person to whom the information
25
relates.
(4)
A person who discloses information contrary to subsection (3) commits
an offence if the identity of the person to whom the information
relates—
(a)
is specified in the disclosure, or
30
(b)
can be deduced from it.
(5)
It is a defence for a person charged with an offence under this section
to prove that the person reasonably believed that—
(a)
the disclosure was lawful, or
(b)
the information had already and lawfully been made available
35
to the public.
(6)
A person guilty of an offence under this section is liable—
(a)
on summary conviction, to imprisonment for a term not
exceeding 12 months or to a fine not exceeding the statutory
maximum, or both, and
40
(b)
on conviction on indictment, to imprisonment for a term not
exceeding 2 years or to a fine, or both.
5C
Offences under section 5B: supplemental
(1)
No proceedings for an offence under section 5B may be instituted in
England and Wales except—
45
(a)
by the Director of Revenue and Customs Prosecutions, or