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Energy Update 10 July 2013



United Kingdom

This fortnight we look at the groundbreaking TAP pipeline announcement, a huge upwards revision in UK shale gas estimates and an update on the next UK Energy Bill.

Welcome to this edition of Fieldfisher's Energy Update.

This fortnight we look at the groundbreaking TAP pipeline announcement, a huge upwards revision in UK shale gas estimates and an update on the next UK Energy Bill.  There are new rules for the judicial review of UK planning decisions, new guidance on decommissioning wind farms and the ISLES study into creating an offshore electricity grid between Scotland, Northern Ireland and Ireland.  We also look at Norway opening up the Arctic to oil exploration.  A report on offshore safety has recently been published in the UK and the European Commission has published human rights guidance for the oil & gas sector.  Finally, we examine a recent court decision on the dangers of having inconsistent provisions in separate documents in the same transaction.

We hope you will find this of interest.

Fieldfisher energy team advise BP on TAP pipeline project

Fieldfisher has advised BP on its participation in the Trans Adriatic Pipeline project (TAP). The firm's team, led by energy partner David Wilkinson, has been advising BP on the project since May 2012.  David commented, "BP is a long-standing client of the firm and we have been delighted to assist them on their involvement in this project, which forms a key part of the wider development of the Shah Deniz gas field project. TAP is a significant project as it will open up the Southern Gas Corridor, and enhance Europe's energy security by providing a new source of gas."

UK confirmed as a shale heavyweight

Scientists from the British Geological Survey (BGS) have estimated that there is likely to be some 40 trillion cubic metres (1300 trillion cubic feet) of shale gas in the ground in and around the Bowland Basin, which covers 11 counties in the North of England.  The BGS did not say what amount of that gas would be recoverable.  However, it is thought that even if it’s only 10 percent of this, it would be enough to supply the UK with gas for 25 years.

The Government also used its long-term infrastructure investment plan to unveil a package of reforms to enable shale gas exploration and welcomed a package of community benefits that has been brought forward by the industry.  Companies have pledged to engage with communities early and to provide community benefits in areas where shale is commercially extracted.

Click here for more details

For the BGS website please click here

UK Energy Bill – DECC publishes information and proposals

The UK Energy Bill contains specific provisions which, when it is enacted, will enable the Secretary of State to give effect to various initiatives to address investments in the UK energy market.  On 27 June 2013, the Government's Department of Energy and Climate Change (DECC) published various information and proposals in this regard. 

Click here for details.

UK onshore - new rules limiting the judicial review of planning decisions

The period within which an application may be made to challenge the grant of planning permission through judicial review is to be reduced from the current three month period to six weeks. The government has confirmed that the new rules will come into effect on 1 July 2013.  Planning permissions granted before this date will remain subject to the old judicial review time limit of three months.

If you have any queries in relation to these new rules, please contact your usual Fieldfisher Contact or John Bowman, Head of Planning and Environment.

For more information click here

New guidance on decommissioning wind farms

Scottish Natural Heritage (SNH) has unveiled new research and guidance on the restoration and decommissioning of onshore wind farms including the potential impact on the natural heritage, criteria that determine when infrastructure should be removed, options and requirements for infrastructure removal techniques, options for reuse of any existing infrastructure and case study examples.

For more information click here

Irish-Scottish Links on Energy Study (ISLES) to get £1 million funding

A detailed study into how an offshore electricity grid between Scotland, Northern Ireland and Ireland could be introduced has been commissioned after being awarded European funding.  The ISLES project will examine how an offshore grid could be established by breaking down the financial, legal and regulatory issues that can impact on cross-border energy projects.  Scotland's First Minister, Alex Salmond, has announced that £1 million is to be spent on the study.

For the announcement click here

Norway opens the Barents Sea in the Arctic to oil exploration

The Norwegian parliament has opened an offshore Arctic zone in the eastern Barents Sea for oil exploration.  The new exploration zone borders Russia and is expected to be included in Norway's next licensing round.

The area is believed to hold approximately 1.9 billion barrels of oil equivalent, some 15 per cent. of which is oil. Russia and Norway were able to reach an agreement in 2010 regarding the area Norway has wanted to explore for several years. With prospects in the North Sea running out, the oil sector in Norway has been moving further into the Arctic. Norway has already awarded 24 licences this month, including 20 in the Barents Sea.

For further information click on the Norwegian Petroleum Directorate's website

Safety First – UK offshore workforce is now safer

Oil & Gas UK’s annual Health & Safety report published recently, shows that the UK oil & gas industry’s focus on continuous improvement has helped to keep the offshore workforce safer.  The report details the performance of companies over the last year, including a 48 per cent. reduction in the number of reportable hydrocarbon releases, no fatalities and a reduction in combined fatal and major injury rates.  As the 25th anniversary of the Piper Alpha disaster approaches, the report also describes the measures being taken in the drive to improve further workers’ safety.

For the report click here

European Commission publishes human rights guidance for the oil & gas sector

The European Commission (EC) has recently published guidance on human rights for the  oil & gas industry.  The guidance has been developed in light of the UN Guiding Principles on Business and Human Rights, which define what companies and governments should do to avoid and address possible negative human rights impacts by business.  The guidance is not legally binding but is intended to be a practical guide for oil & gas companies on how to ensure respect for human rights.

For details of the announcement and links to the guidance click here

Singing from the same hymn sheet?

A recent English case Kuoni Travel Limited V John Boyle et al (2013) EWHC 877 (QB) has highlighted the dangers of having inconsistent provisions in separate documents in the same transaction. 

The case concerned the acquisition of a ski holiday company.  After completion, the buyer brought a claim under the tax deed.  Both this document and the share purchase agreement contained procedures relating to the bringing of claims.  However, only the share purchase agreement required the buyer to notify a claim to the sellers as soon as reasonably practicable and in any event within 30 days of becoming aware of it.

The documentation provided that the terms of the tax deed prevailed in the event of any inconsistency. The judge found that the respective claims procedures were inconsistent, and not merely complementary as the sellers claimed. Accordingly, the buyer was not subject to the 30 day time limit and the sellers were not able to rely on this provision to prevent the buyer's claim.

It is therefore vital to ensure that the provisions in documents relating to the same transaction are truly identical or, preferably, to cover the relevant matter comprehensively in one document only and to cross refer to those provisions in the other relevant documents.

Click here for the full judgment (see especially paragraphs 37-43)

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