Company disputes can cost time, money and, ultimately, get in the way of doing business effectively.
The Oil and Gas Authority (OGA) has seen an increasing number of disputes between licensees, operators and infrastructure owners in the UKCS over the past 18 months. In some cases, these disputes have the potential to threaten delivery of MER UK.
In a bid to help industry resolve the issues underlying these disputes, which often flare up because of communication breakdowns or entrenched licensee behaviours, the OGA has launched a year-long mediation pilot.
The OGA already has formal powers which can be used in some disputes, but others may be more rapidly resolved with the aid of a neutral third-party mediator.
A mediator, unlike a judge, won’t make decisions about the dispute but instead brings the parties together, facilitating discussion, summarising arguments and highlighting areas of agreement and outstanding issues.
The aim of the mediation is that the parties agree a resolution themselves rather than having a decision being handed down by a judge, or the OGA.
Ideally, a resolution should be found quickly so that issues don’t drag on for months or years, potentially wasting valuable time and money which could be better used in getting on with the day job.
The pilot launched on February 3, meaning that now, when the OGA becomes aware of a dispute, it can request that the parties try mediation. This could be at any point during the OGA’s involvement in the dispute, including as part of the OGA’s “business as usual” stewardship, while facilitating discussions between two parties.
If the parties agree to mediate, the OGA will refer them to the Centre for Effective Dispute Resolution, an experienced third-party service provider, who will carry out the mediation.
The mediation should be arranged as soon as possible, at most within a month of a referral, and the process should take around eight hours of face-to-face discussions.
This will either result in a resolution or in the parties identifying areas on which they do agree, which could help the OGA resolve the dispute by other, more formal, means.
The OGA will review the pilot’s performance in early 2021 and decide on whether to continue supporting a mediation service.