NSTA Gets Tough with Firm Suspected of Undermining UK Energy Security

An oil and gas company is under investigation for possibly failing to meet licence commitments designed to stimulate activity, in support of the UK’s energy security. The North Sea Transition Authority (NSTA) is focused on supporting the UK’s security of supply, including through the ongoing 33rd Licensing Round, which attracted 115 bids from 76 companies.

The NSTA expects companies with valuable licences to progress exploration and production as quickly as possible, in line with their licence commitments and our strategy. Licensees are obliged to pursue economic recovery, while assisting the government in the drive to reach net zero.

The investigation will consider whether:

• the company being investigated was obliged under the terms of a licence it was awarded in a prior licensing round to shoot a seismic survey which would help inform its decision on whether to drill an exploration well;
• the licensee did not provide a satisfactory alternative work programme to ensure progress on the acreage continued.

The investigation will determine whether a sanction should be imposed on the company. Such a sanction could include a financial penalty of up to £1 million.

This is the second investigation opened in recent months into a company suspected of failing to meet its licence commitments, such as shooting 3D seismic, within agreed timescales.

Jacob Blatch, NSTA Interim Head of Disputes and Sanctions, said:

“The NSTA works closely with industry to drive forward exploration and production activities to help the UK meet as much energy demand as possible from its domestic oil and gas reserves.

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