Energy Bill

House of Commons

Session 2007 - 08
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Energy Bill

Energy Bill
Part 3 — Decommissioning of energy installations
Chapter 3 — Oil and gas installations
56

68
Financial resources etc
(1)
Section 38 of the Petroleum Act 1998 (c. 17) (information and notices) is
amended as follows.
(2)
For subsection (1) substitute—
“(1)
The Secretary of State may, for a purpose specified in subsection (1A),
5
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
financial affairs;
(b)
to supply copies of specified documents, or documents of a
10
specified description, relating to those affairs.
(1A)
Those purposes are—
(a)
determining whether to give a notice under section 29 to a
person in respect of an installation or pipeline;
(b)
determining whether to make a proposal under section 34(1) to
15
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.
(1B)
A person falls within this subsection if—
(a)
a notice under section 29(1) may be given to the person,
20
(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
(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
25
under section 36 in accordance with a proposal made under
section 34(1)(b).”
(3)
In subsection (2)—
(a)
for the words from “who has” to “that duty” substitute “falling within
subsection (2A) will be capable of carrying out any abandonment
30
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
estimated costs of abandonment of the installation or pipeline or to any
other financial or other matter)”.
35
(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
(b)
the person has a duty under section 36 to secure that an
abandonment programme is carried out.”
40
(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
person to take such action as may be specified in the notice within such
time as may be so specified.
45
(4A)
This subsection applies to a person if—

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Part 3 — Decommissioning of energy installations
Chapter 3 — Oil and gas installations
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(a)
the person falls within subsection (2A), and
(b)
the Secretary of State is not satisfied that the person will be
capable of carrying out any duty which has been, or is likely to
be, imposed on the person by section 36.”
(6)
After subsection (6) add—
5
“(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,
(b)
is for the purpose of the exercise of the Secretary of State’s
10
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.”
69
Protection of abandonment funds from creditors
(1)
After section 38 of the Petroleum Act 1998 (c. 17) insert—
15
“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
provided by a person (“the security provider”) by way of a trust or
20
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
security and any property or rights in which it consists.
25
(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.
(5)
For the purposes of subsection (4), no regard is to be had to so much of
30
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 from being applied in
accordance with the trust or other arrangement, or
35
(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 or
Northern Ireland legislation.
40
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—

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Part 3 — Decommissioning of energy installations
Chapter 4 — Wells
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(a)
the time when the information must be published, and
(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.
5
(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—
10
“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;
15
“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
20
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
25
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
30
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
35
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
40
by such a notice within the period specified in the notice, or

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(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
person a notice, after consulting the Treasury, requiring the person to
5
take the action specified in the notice within the time so specified.
(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
10
subsection (2) or (5) unless it is proved that the person exercised due
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
15
(b)
on conviction on indictment, to imprisonment for a term not
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.
20
(10)
In this section—
“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
25
or after the date on which this section comes into force.
Part 4
Provisions relating to oil and gas
Petroleum licences
71
Transfers without the consent of the Secretary of State
30
After section 5 of the Petroleum Act 1998 (c. 17) (existing licences) insert—
“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
35
1934 or section 3 above (“the transferor”),
(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
40
(c)
that consent is not obtained.

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(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.
5
(4)
Before giving a notice to a person under subsection (2), the Secretary of
State must—
(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.
10
(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
Secretary of State learns of the transfer.
(6)
In this section—
“commencement” means the time when this section comes into
15
force;
“transfer” does not include a transfer by way of security for a loan.
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
20
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
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
25
disclosure of information.
(3)
Information disclosed under this section must not be further disclosed
except—
(a)
for the purpose mentioned in subsection (1), with the consent
(which may be general or specific) of the Commissioners,
30
(b)
in pursuance of an order of a court, or
(c)
with the consent of each person to whom the information
relates.
(4)
A person who discloses information contrary to subsection (3) commits
an offence if the identity of the person to whom the information
35
relates—
(a)
is specified in the disclosure, or
(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—
40
(a)
the disclosure was lawful, or
(b)
the information had already and lawfully been made available
to the public.
(6)
A person guilty of an offence under this section is liable—

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(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
(b)
on conviction on indictment, to imprisonment for a term not
exceeding 2 years or to a fine, or both.
5
5C
Offences under section 5B: supplemental
(1)
No proceedings for an offence under section 5B may be instituted in
England and Wales except—
(a)
by the Director of Revenue and Customs Prosecutions, or
(b)
with the consent of the Director of Public Prosecutions.
10
(2)
No proceedings for an offence under section 5B may be instituted in
Northern Ireland except—
(a)
by the Commissioners for Her Majesty’s Revenue and Customs,
or
(b)
with the consent of the Director of Public Prosecutions for
15
Northern Ireland.
(3)
In the application of section 5B to Northern Ireland the reference in
section 5B(6)(a) to 12 months is to be read as a reference to 6 months.
(4)
In the application of section 5B to England and Wales in relation to an
offence committed before the commencement of section 282 of the
20
Criminal Justice Act 2003 (c. 44) (short sentences) the reference in
section 5B(6)(a) to 12 months is to be read as a reference to 6 months.”
72
Model clauses of petroleum licences
(1)
Schedule 3 amends the model clauses contained in the instruments specified in
that Schedule.
25
(2)
Where a licence granted under the Petroleum (Production) Act 1934 (c. 36) or
the Petroleum Act 1998 (c. 17), and in force immediately before
commencement, incorporates model clauses amended by a paragraph of
Schedule 3, the licence has effect with the amendments provided for by that
paragraph of that Schedule.
30
(3)
The reference in subsection (2) to model clauses includes model clauses subject
to any amendment or modification or with the omission of any model clause.
(4)
Where an amendment made by a paragraph of Schedule 3 confers a power to
give a notice requiring the plugging and abandonment of a well, the power
may not be exercised in relation to a well the drilling of which began before
35
commencement.
(5)
Where an amendment made by a paragraph of Schedule 3 confers a power of
revocation or partial revocation of a licence, that power may not be exercised
by reason of an event which takes place before commencement.
(6)
A reference in any document to provisions of a licence which are amended by
40
Schedule 3 is to be construed, unless the nature of the document or the context
otherwise requires, as a reference to those provisions as amended.
(7)
A provision inserted in a licence by virtue of Schedule 3 may be altered or
deleted by deed executed by the Secretary of State and the licensee or, as
respects Scotland, by an instrument subscribed by the Secretary of State and
45

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the licensee in accordance with the Requirements of Writing (Scotland) Act
1995 (c. 7).
(8)
In this section “commencement”, in relation to a paragraph of Schedule 3,
means the time when that paragraph comes into force.
Third party access
5
73
Third party access to infrastructure
(1)
In section 66(1) of the Pipe-lines Act 1962 (c. 58) (interpretation)—
(a)
in the definition of “gas processing operation”, omit “and” after
paragraph (b) and after paragraph (c) insert—
“(d)
separating, purifying, blending, odorising or
10
compressing gas, for the purpose of—
(i)
converting it into a form in which a purchaser is
willing to accept delivery from a seller, or
(ii)
enabling it to be loaded for conveyance to
another place (whether inside or outside Great
15
Britain); and
(e)
loading gas—
(i)
at a facility which carries out operations of a kind
mentioned in paragraph (d), or
(ii)
piped from such a facility,
20

for the purpose of enabling the gas to be conveyed to
another place (whether inside or outside Great
Britain);”,
(b)
in the definition of “terminal”, omit “and” after paragraph (b) and after
paragraph (c) insert “; and
25
(d)
oil processing facilities (within the meaning given by
section 76(8) of the Energy Act 2008);”, and
(c)
in the definition of “upstream petroleum pipe-line” after paragraph (c)
insert—
“including all apparatus, works and services associated
30
with the operation of such a pipe-line or network.”
(2)
In section 12 of the Gas Act 1995 (c. 45) (rights to use gas processing facilities)—
(a)
in subsection (6), in the definition of “gas processing operation”, omit
“and” at the end of paragraph (b) and after paragraph (c) insert—
“(d)
separating, purifying, blending, odorising or
35
compressing gas for the purpose of—
(i)
converting it into a form in which a purchaser is
willing to accept delivery from a seller, or
(ii)
enabling it to be loaded for conveyance to
another place (whether inside or outside Great
40
Britain); and
(e)
loading gas—
(i)
at a facility which carries out operations of a kind
mentioned in paragraph (d), or
(ii)
piped from such a facility,
45