COMPETITION ACT 1998 Following the fuel protests in 2000, a jointly managed approach was agreed with Industry (upstream and downstream sectors) to mitigate the potential effects of a significant disruption or threat of a significant disruption to gas supplies to the National Transmission System (NTS) and/or crude oil to refineries. The agreed action was to develop an early warning system and implement appropriate contingency plans to mitigate the potential effects of further fuel protests. The system would include:
Assessment and forecasting of the availability of crude oil and natural gas at each onshore terminal and their interdependence in the event of disruption.
Facilitating and, as appropriate, directing the rates of supply and acceptable quality of natural gas and crude oil into and out of onshore terminals in the event of disruption.
The agreement was formalised in two Memoranda of Understanding (MOU) which were signed by DTI and all the participating companies; an MOU dated 29 September 2000 in respect of disruption to downstream fuel supplies (“the Downstream MOU”) and an MOU dated 1 November 2000 in respect of disruption to crude oil and natural gas (“the Upstream MOU”). Industry signatories to the Upstream MoU form the Upstream Industry Coordination Group (UICG).
At the time that the Upstream MOU was entered into, concern was expressed that the supply of commercially privileged information to members of the Upstream Industry Coordination Group (UICG) raised competition issues especially if one or all of the members used that information for the companies’ commercial benefit.
Since that time, the Competition Act 1998 has been amended, such that certain types of agreements are automatically exempt from the general prohibition if they fulfil the criteria set out in section 9 of that Act. It is DECC’s view that the Upstream MOU is likely to fall within this exemption.