UKCS Licensee Financial Analysis Support

Tender description

The Department of Business, Energy and Industrial Strategy (BEIS) have a team which consists of subject experts embedded from the OGA, policy and programme expertise from BEIS and external insolvency and financial advisors. This team has been working with others in Government to understand the financial challenges faced by UK Continental Shelf (UKCS) licence holders in light of the enduring lower oil and gas prices and what impact that may have on their activities and decommissioning obligations. BEIS have recently implemented measures to assess and identify potential Licensees who may already be, or may be likely to be in the near future, in financial distress. To inform this review of the sector BEIS have requested detailed financial data sets from a number of UKCS License holders. This procurement will help BEIS to analyse seven of these company financial data sets to understand whether there are any Licensees and assets at risk, understand any potential impact, and ultimately devise a plan to mitigate any government liability. The role of the appointed analyst will be to support the work programme by providing concise analysis based on data received from the Licensees and a key issues report and analysis to assist BEIS in identifying which companies are potentially in financial distress over the short to medium term and that may require further investigation. Description: The Requirement BEIS have recently implemented measures to assess and identify potential Licensees who may already be, or may be likely to be in the near future, in financial distress. To inform this review of the sector BEIS have requested detailed financial data sets from a number of UKCS License holders. The information requested is summarised below: 1. UK subsidiary information a) Financial information and arrangements i. Management and audited accounts; ii. Group structure/organogram; iii. Asset performance reports; iv. Details of any financial arrangements and joint venture partnerships. b) Decommissioning Security i. Details of Decommissioning Security Agreements (DSAs); ii. Clauses or agreements in the joint operating agreement (JOA) or other commercial agreements which cover decommissioning liabilities or provisions. 2. Parent company information i. Confirmation of support to the UK subsidiary/subsidiaries. Note: the quality and completeness of response from Licensees is varied. This procurement will help BEIS to analyse seven of these company financial data sets to understand whether there are any Licensees and assets at risk, understand any potential impact, and ultimately devise a plan to mitigate any government liability. See further comments regarding the description of this requirement below.