Full UK Procurement Exemption for E&P

On 31 March the European Commission published its decision exempting exploration for and exploitation of oil and gas in England, Scotland and Wales from the application of the utilities procurement rules.

The practical implications of the decision are that oil and gas operators will no longer be bound by the Utilities Contracts Regulations – even as set out in the "derogation" - in their procurements for E&P activities on the UKCS. Unhappy contractors will no longer be able to look to the special procurement remedies regime if they have a complaint about the way a contract was awarded. Operators can now make their own decisions whether a competitive process is appropriate to a particular situation. Good practice will continue to require review of the relevant provisions of any JOA, the PILOT Supply Chain CoP and company policies. FPAL will in many instances remain a useful starting point for the choice of supplier.