The North Sea Transition Authority (NSTA) has announced that an unnamed oil and gas company is under investigation “for possibly failing to meet licensing commitments designed to stimulate activity, in support of the Kingdom’s energy security United”.
According to the NSTA, the inquiry will consider whether the company was required under the terms of a license it was awarded in a previous licensing round to carry out a seismic survey, which would help inform its decision on if drilling an exploratory well. It will also consider whether the licensee failed to provide a satisfactory alternative work program to ensure continued progress on the surface.
The investigation will determine whether a penalty should be imposed on the company, the NSTA said. That penalty could include a financial penalty of up to GBP 1 million ($1.22 million), the organization warned, adding that this is the second investigation opened in recent months into a company suspected of non-compliance their license commitments within the agreed terms.
In October 2022, the NSTA revealed that it had opened an investigation into whether a company, which it said was awarded a license in the 28th licensing round in 2014, had breached several obligations, including drilling ‘an exploration well and the recording of a 3D. seismic prospecting.
In an announcement on its website at the time, the NSTA warned the industry that it will not hesitate to take action against companies that breach their licensing obligations.
The NSTA noted in its latest update that it is focusing on supporting the UK’s security of supply, including through the ongoing 33rd licensing round, which it noted attracted 115 bids from 76 companies. The round attracted similar interest to the 32nd licensing round in 2019, the NSTA said in a statement in January this year, adding that this round received 104 applications for 245 blocks and partial blocks. A total of 768 blocks and partial blocks were offered in 2019, compared to 931 this year, according to the release.
In its most recent update, the NSTA also stated that it expects companies with valuable licenses to progress exploration and production as soon as possible, consistent with their license commitments “and our strategy.” Licensees are required to pursue economic recovery, while assisting the government in the effort to reach net zero, the NSTA said.
“The NSTA is working closely with industry to boost exploration and production activities to help the UK meet as much energy demand as possible from its national oil and gas reserves,” said Jacob Blatch, Acting Head of disputes and sanctions of the NSTA, in a press release from the organization. .
“However, as evidenced by the opening of this investigation, we will be looking at incidents where licensees potentially sit on licenses and make no real progress towards compliance,” he added in the communicated
Rigzone asked industry body Offshore Energies UK (OEUK) for comment on the latest update on the NSTA investigation. OEUK told Rigzone it would not comment on this “as it is part of an ongoing investigation led by NSTA”.
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