Energy and Brexit—UK oil and gas
Energy and Brexit—UK oil and gas

The following Energy practice note provides comprehensive and up to date legal information covering:

  • Energy and Brexit—UK oil and gas
  • Introduction
  • Key publications and announcements to date in relation to Brexit and UK oil and gas industry
  • Brexit and the UK Oil and Gas Industry—analysis and explanation
  • Key threats to the industry
  • Sanctions

Introduction

This Practice Note tracks the key publications and announcements made to date in relation to Brexit and the UK oil and gas industry. It also provides a brief analysis of the consequences of these publications and announcements.

On 23 January 2020, the European Union (Withdrawal Agreement) Act 2020 (EU(WA)A 2020) was adopted enabling the government to ratify the Withdrawal Agreement and implement its provisions into UK law. As a result of EU(WA)A 2020 the UK remains legally bound by EU law during the transition period agreed in the Withdrawal Agreement which runs from 11 pm on 31 January 2020 until 11 pm on 31 December 2020 (the Implementation Period). The implementation period ends on implementation period completion day (IP completion day).

For a more general timeline of key events and updates in respect of Brexit, see Practice Notes: Brexit timeline and Brexit—introduction to the Withdrawal Agreement, and News Analysis: Brexit Bulletin—key updates, research tips and resources.

Key publications and announcements to date in relation to Brexit and UK oil and gas industry

DateAuthorPublication (incorporating hyperlink)
13 September 2018UK governmentRunning an oil or gas business if there’s no Brexit deal.
12 October 2018UK governmentTrading gas if there’s no Brexit deal (Gas No Deal Note).
14 November 2018UK government and CommissionUK government and the European Commission announce a deal in principle on the legal
terms of the UK’s withdrawal from the EU (Draft Withdrawal Agreement). For full details, see News Analysis: Brexit Bulletin—examining the key announcements, documents and next steps for the draft Withdrawal Agreement. As explained below, the primary aspect of this of relevance to energy is to be found in the Outline Political Declaration, cross-referred to in Article 184 of the Draft Withdrawal Agreement.
22 November 2018UK government and CommissionDraft of the Political Declaration published. 3 December 2018UK governmentThe Electricity and Gas (Powers to Make Subordinate Legislation) (Amendment) (EU Exit) Regulations 2018 (2018 E&G Brexit SI), SI 2018/1286, is made. This by and large comes into force on ‘exit day’ (now IP completion day), and amends (for the purposes of their incorporation into UK law as retained EU law) the following pieces of EU energy legislation:
  1. Regulation (EC) No 714/2009 of the European Parliament and of the Council on conditions for access to the network for cross-border exchanges in electricity

  2. Regulation (EC) No 715/2009 of the European Parliament and of the Council on conditions for access to the natural gas transmission networks

  3. Regulation (EU) No 1227/2011 of the European Parliament and of the Council on wholesale energy market integrity and transparency (widely known as REMIT)

  4. Regulation (EU) 2017/1938 of the European Parliament and of the Council concerning measures to safeguard the security of gas supply

31 January 2019UK governmentUK sanctions regimes if there’s no Brexit deal, provides links to legislation and guidance on implementing UK and UN sanctions if the UK leaves the EU without a deal.1 February 2019UK governmentOil and gas production and preparing for Brexit.2 April 2019Oil and Gas UKBrexit and the UK oil and gas industry, outlines top concerns for the UK Oil and Gas authority.19 October 2019UK governmentUK Government publishes New Withdrawal Agreement and Political Declaration19 May 2020UK government
UK government publishes proposed draft legal texts for the future UK-EU relationship, including among others, draft Energy Agreement. For more information, see: LNB News 19/05/2020 103.

Brexit and the UK Oil and Gas Industry—analysis and explanation

Key threats to the industry

Unlike some other areas of the energy sector, the UK oil and gas sector is not expected to be heavily affected by Brexit. This is due in part to the fact that the UK government has historically retained control over its energy policy, including the development of oil and gas reserves. Indeed the government stated in a note published in September 2018, that ‘the established regime for hydrocarbon licensing and environmental issues will continue to operate’ post-Brexit and that ‘the government will amend the relevant legislation to ensure broad continuity. The legislative changes will have no impact on energy sector businesses, whose residual obligations under the legislation covered will remain unaltered’.

The legal and regulatory regime governed by the

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