Assessing Satisfactory Returns in the Oil and Gas Sector

The Oil and Gas Authority (OGA) recently consulted on its approach to assessing whether North Sea projects offer a “satisfactory expected commercial return”, or SECR. We explain in this paper that the OGA’s proposed approach differs to that applied internally by many companies in the sector, and may result in returns that they consider insufficient. This could have unintended consequences for the OGA’s objective of promoting investment in the sector.