-
Regulator launches consultation looking at decom and enforcement
-
Supports emissions reduction and spreading best practice
-
Latest step in NSTA drive towards greater transparency
Investigation details into potentially substandard performance among North Sea operators could soon be reported to focus momentum on the energy transition and ensure a level playing field for licensees.
It is also hoped that, if the proposals are enacted, companies will be more motivated to fulfil their decommissioning obligations which will, in turn, benefit the supply chain by providing decommissioning contracts.
The consultation on the measures launched today (29 August) asks about publishing operator names earlier in the sanctions process, as well as publishing a new decommissioning league table.
It is part of an ongoing drive to further enhance transparency at the NSTA.
Currently, a company under investigation is only named in the event of a sanction being issued. If adopted, the new proposals would result in a company being named earlier in the process when an investigation is opened, or notice has been sent warning that a sanction is under consideration.
Stuart Payne, NSTA Chief Executive, said:
'Industry must clean up after itself. When production consents are granted, they include a commitment to decommission wells properly and quickly.
'Many do. A great deal of work has been completed. But there is still a great deal to achieve, and every company must live up to its obligations. These proposals will help us to maintain the pressure on them to do so.'
The consultation proposes greater transparency in the following circumstances:
- Where the NSTA opens an investigation into a potential breach of a petroleum-related requirement.
- Where the NSTA issues a Sanction Warning Notice.
- Should the NSTA publish the names of companies that have missed decommissioning deadlines, alongside details of the wells?
- Should the NSTA publish an annual league table of well decom performance?
This is a step on a continuing path to greater transparency which will be followed by publishing a list of assets that routinely flare in the near future.
The enforcement process is intended to remind the wider industry of their obligations and demonstrate that the North Sea operates under a stable and predictable regulatory system in addition to potentially sanctioning licensees in breach of regulatory requirements.
However, as an investigation can take a significant time, potential investors do not receive the reassuring message of stability, and the industry does not benefit from the warning and ensure that they are compliant under the current regime.
Well decommissioning is essential to demonstrate that the industry can be trusted to meet its commitments to limit its impact on the environment.
There has been encouraging progress, with decommissioning activities carried out on 120 wells on average per year from 2018 to 2023. However, there remains a huge amount of work to be done. There are about 940 inactive wells that need to be decommissioned and currently there are more than 500 that have missed their original deadline.
This has a negative impact on the industry’s reputation and also affects the supply chain which is unable to plan effectively. In the long-term this leads to inefficiency and higher costs in an area which is already estimated to cost a total of £10bn from 2023 to 2032.
The proposals in the consultation would see companies which have fallen behind in their commitments named, alongside a summary of work they have yet to complete and the publication of an annual league table of operator performance.
The consultation will last for eight weeks, ending on 31 October 2024. Responses can be submitted here - transparency@NSTAuthority.co.uk
Background
Emissions Monitoring Report dashboard
See also: Consultation on greater transparency on industry compliance under new plans by NSTA
Source: NSTA
