Operators and non-operating petroleum licensees on the Norwegian Continental Shelf must establish emergency preparedness and implement measures to deal with any risks to their petroleum activities. Traditionally, this emergency preparedness planning has been directed towards conventional risks, such as non-deliberate accidents and emergencies resulting from human mistakes, technical errors or weather conditions. However, cybersecurity is also becoming a major concern for the oil and gas industry.
An increased number of corporate transactions and mergers have been observed in the oil and gas sector on the Norwegian Continental Shelf (NCS) in recent years. Several oil majors and traditional utilities and downstream companies have reduced their presence and broad portfolio sales and swaps of NCS licences have become increasingly common. These changes in trends are highly relevant for the government, which aims to maintain a high level of activity on the NCS.
In 2016 the Ministry of Petroleum and Energy announced that in all future corporate transfers subject to ministry approval it would consider requiring security from the seller establishing a secondary liability for future decommissioning costs. The ministry will require any seller of a licensee or of a licensee's parent company to provide an unlimited parent company guarantee. However, questions have been raised about the robustness of the security achieved by the guarantee.
Following the recovery and stabilisation of oil prices, an increasing number of oil companies on the Norwegian Continental Shelf (NCS) are looking for new ways to advance developments by cooperating with contractors. Some companies are looking for a stronger commitment from their suppliers and have introduced a cooperation scheme whereby the parties share a greater portion of risk for profit or loss. However, a number of challenges may arise from such contractual structures with regard to NCS projects.
The Borgarting Court of Appeal recently rendered its judgment in a case of major importance for the upstream Norwegian Continental Shelf (NCS) industry, natural gas buyers in Europe and the Norwegian government. If the judgment becomes final and binding, it will benefit the European gas supply. However, it may be a rude awakening for institutional investors in NCS infrastructure.