- CNR International fined £250,000 for excessive venting
- NEO fined £100,000 for attempting well abandonment without consent
- Ensuring staff are up to speed on rules will help avoid future breaches
The North Sea Transition Authority (NSTA) has handed down fines totalling £350,000 to a pair of North Sea operators as it continues to take a firm line on breaches of emissions limits and on well decommissioning.
CNR International’s £250,000 penalty is for exceeding venting limits twice in the same year on the same fields, while NEO has been fined £100,000 for attempting to fully abandon a well without the required consent to undertake the work.
The NSTA said the sanctions underlined the importance of complying with regulations to show that the industry is well run and takes its responsibilities seriously – and that all licensees are on a level playing field.
Jane de Lozey, NSTA Director of Regulation, said: 'When operators accept a licence, they are agreeing to adhere to the same rules as everybody else. In both these cases, a lack of familiarity with their obligations contributed to shortcomings, which is disappointing. Investors and the public rightly expect that this industry is held to high standards and there is no excuse for operators not complying with their regulatory responsibilities.'
Venting occurs when excess gas, predominantly methane, is disposed of into the atmosphere unignited, whereas, with flaring, excess gas is burned off, mainly resulting in carbon dioxide emissions. While venting and flaring activities are sometimes required for safety and operational reasons, more can be done to lower emissions from both processes. Flaring and venting together made up 19% of UKCS production emissions in 2024.
The NSTA keeps a tight rein on operators’ venting and flaring, setting upper limits for fields through its annual issuing of consents. The regulator has consistently cracked down on breaches of flaring and venting consents, and since the start of 2021 has collectively fined operators £1.2 million for such infringements. This approach is a key part of the regulator’s work to hold industry to account on emissions.
CNR initially exceeded the annual vent consent for its Ninian assets in March 2023, but only became aware of the breach in November 2023, after the NSTA brought it to their attention. By then, CNR had gone 2,539 tonnes over the limit.
The company failed to ensure staff were familiar with guidance published by the NSTA in 2021 and had poor systems and processes in place to monitor its venting volumes, contributing to the breach. CNR was granted a new consent on 23 November 2023 to see it through to the end of the year, only to exceed the new limit within three weeks.
On the subject of well decommissioning, operators are required by law to fully plug and abandon disused wells to protect the marine environment long-term. The NSTA has repeatedly reminded operators of the importance of undertaking this work in a timely and cost-effective manner to reduce the cost of decommissioning tax reliefs to the Exchequer and, therefore, to the public, meet their regulatory obligations and give the supply chain a clear picture of upcoming activities.
Before operators start work on a well, they must receive consent from the NSTA. This enables the regulator to check that companies have got effective plans and that, if appropriate, wells are decommissioned to the standard required for carbon storage purposes.
In March 2024, NEO attempted to decommission the Leverett well to ‘AB3’ status – the final abandonment phase. However, NEO failed to apply for consent from the NSTA before undertaking this work due to its misunderstanding of the relevant requirements, which raises questions about the company’s processes.
The abandonment work was not executed successfully and has had to be redone.
CNR and NEO both complied fully with the investigations.
Background
CNR International (U.K.) Limited sanction notice.
NEO Energy Petroleum Limited sanction notice.
ONE-Dyas was fined in November 2024 for undertaking decommissioning work on a well without consent.
Source: NSTA
