Offshore operators have welcomed the mediation project
Offshore operators have welcomed the mediation project
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Britain’s Oil and Gas Authority (OGA) is extending its UK Continental Shelf (UKCS) Mediation pilot project to the end of April 2022.

The scheme is designed to help offshore oil and gas licensees, operators and infrastructure owners in UK waters resolve their disputes without litigation.

The one year pilot was launched in February 2020 by OGA to test the use of mediation among offshore operators, but the Authority indicates that more time is required for the Mediation pilot.

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According to the OGA, despite the encouraging early response, an extension is called for due to the abnormal operating conditions presented by COVID-19 challenges.

“The restrictions have had limited take-up in the period through March 2021, making it difficult to properly assess its value for the sector so far,” the Authority stated.

The OGA had found that disputes have generally arisen due to entrenched licensee behaviours or communication breakdowns. These dispute are usually costly and time consuming for the companies involved, as well as threatening the deliverables for maximising economic recovery for the UK.

While the OGA has a number of formal powers which can be used to resolve disputes, it decided that some matters could be better addressed by the parties themselves through mediation.

Mediation is conducted by an impartial third party who, unlike a judge in a court case, does not make a decision about the dispute, but acts as a facilitator of a conversation between the parties, for an amicable settlement of a dispute.

The aim of mediation is to encourage parties themselves to resolve the dispute, rather than a decision being handed down to them by a judge or the OGA. This resolution could be done over a relatively short period, rather than parties engaging in litigation which drags for many months and even years.

During the mediation pilot, the OGA may ask the parties involved in a dispute to proceed to mediation. This request could be at any point during the OGA’s measured escalation process.