Second recent probe into alleged failures to meet licence obligations

The oil and gas industry regulator has began another investigation into the suspected failure of a company to comply with licence obligations.

The North Sea Transition Authority (NSTA) said today the investigation would look into whether the unnamed company met its commitments on seismic surveys and the work programme.

In October 2022, the NSTA opened a separate investigation after a company failed to drill a well and do a 3D seismic survey. In that case, the regulator said the company had been awarded its licence under 28th round, which offered blocks in the North Sea.

In the most recent investigation, the NSTA said it would consider whether the company:

  • Was obliged by the licence to carry out a seismic survey to help inform its decision on where to drill an exploratory well
  • Did not provide a satisfactory alternative work programme to ensure progress in the licence area

The NSTA said the investigation would decide whether the company should be sanctioned, which could include a penalty of up to £1m.

Jacob Blatch, the NSTA’s interim head of disputes and sanctions, said:

“as opening this investigation demonstrates, we will scrutinise incidents where licensees potentially sit on licences and make no real progress on fulfilling obligations.”

DrillOrDrop asked the NSTA for the name of the company and whether the licence was onshore or offshore.

The regulator said it did not normally publish the names of those under investigation until the conclusion of the investigation. It would also not confirm whether the case involved an offshore or onshore licence.

The NSTA told us it has no public record of the level of compliance with licence commitments by operators.

It does publish and update a register of investigations. These cases include suspected failure to meet licence obligations.

The register names companies only when the NSTA considers disclosure to be in the public interest. In some cases, the area of operation is left blank.

There are 18 cases on the register, which goes back to 2018. Where the area of operation is identified, none is onshore.

Of the eight cases where there has been a decision, five had sanction notices.

These include fines of £50,000 against BP (July 2021), Shell (April 2022) and Spirit Energy (November 2022), £65,000 against Equinor (December 2022) and £150,000 against Enquest (November 2022).

DrillOrDrop has reported where onshore oil and gas companies have kept their licences despite failing to meet commitments on time. Examples here and here

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