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Guidelines to assist licensees in demonstrating Financial Responsibility to DECC for the consent of Exploration & Appraisal Wells in the UKCS Issue 1, November 2012

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DECC requires assurance that operators and their co-venturers have the financial resources not only to carry out the work programme obligations of a petroleum licence but also to control, respond to and compensate for any unintended and uncontrolled release of hydrocarbons that might result from this activity. Their requirements are outlined in their “Guidance Note to UK Offshore Oil and Gas Operators on the Demonstration of Financial Responsibility Before Consent May be Granted for Exploration and Appraisal Wells on the UKCS. This is available at These industry Guidelines are intended as good industry practice, to provide licensees with a practical method by which DECC’s requirements may be fulfilled. These Guidelines outline a new process by which operators may assess the potential cost of well control, pollution remediation and compensation in the unlikely event of a well control incident occurring and demonstrate to DECC that they have the financial resources to address the potential consequences. DECC have indicated that it intends to give “considerable weight” to an operator who can show that these industry Guidelines have been followed. However, following these Guidelines may not necessarily fulfil all DECC’s requirements in every case. Oil & Gas UK has prepared these Guidelines in good faith, but it is not intended to replace professional advice and is not deemed to be exhaustive or prescriptive in nature.
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