Jurisdiction(s):
United Kingdom

NSTA guidance on UKCS petroleum licence assignments: expected project plans, capability packs, FWDSAs, consenting party conduct, and potential sanctions under the OGA Strategy and Petroleum Act 1998

Published on: 24 January 2025

Published by a LexisNexis Energy expert

Legal News

Article summary

Navigating the North Sea—NSTA releases new guidance to streamline M&A transactions

The Guidance focuses on direct transfers of petroleum licence interests within the UKCS—namely asset-level transactions—termed Assignments. Such Assignments require NSTA approval pursuant to the model clauses for each licence. A distinct pathway, supported by separate guidance, governs changes of control in the licence holder—i.e., share transactions—and these sit outside the scope of the Guidance. Although not legislative, any party seeking to depart from the Guidance must write to the NSTA with evidence supporting the requested derogation. The Guidance will also inform assessments of investigatory breaches of the OGA Strategy and compliance with the Petroleum Act 1998 where completion of an Assignment is delayed or prevented, with the NSTA able to impose sanctions where breaches are identified.

Expectations of the buyer and seller

Inevitably, collaboration among all parties to an Assignment is a core principle of the Guidance. Recognising the frequent complexities in UKCS M&A activity, the Guidance sets out two practical suggestions to support both buyers and sellers...

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