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Oil and gas firms face the specter of being named and shamed within the UK for failing to meet decommissioning deadlines for empty wells, Britain’s North Sea regulator has warned.
The North Sea Transition Authority has opened a session over plans to impose extra transparency on an business that has fallen behind targets for “plugging and abandonment” as reserves run dry.
“Not only do missed deadlines knacker the credibility of the industry — and they do — they cause a huge problem for the supply chain,” Stuart Payne, chief government of the NSTA, instructed an business convention.
Investigations have already been opened on two firms for failing to meet deadlines, Payne mentioned, however their identities haven’t been disclosed.
The session will resolve whether or not to name these underneath investigation, to publicise these delayed on decommissioning, and problem a league desk of efficiency.
While a median of 120 wells every year have been decommissioned between 2018 and 2023, there are nonetheless 940 inactive wells excellent and greater than 500 have slipped behind their authentic deadline, the NSTA mentioned.
The regulator warned {that a} lack of accessible work will disrupt provide chain stability and trigger specialist decommissioning vessels “to literally sail away” from UK waters.
North Sea decommissioning is presently estimated to value £10bn between 2023 and 2032. Supply chain disruption might increase prices additional, the NSTA warned.
Payne described decommissioning as “a huge bridge opportunity” from oil and gas into future initiatives, similar to carbon seize and storage.
“But if the rigs continue to leave the basin because industry can’t trust that the work is actually going to happen, then we make the transition harder,” he added.
Glenn Kangisser, a associate at legislation agency Haynes and Boone, who specialises in offshore energy, mentioned a clear register would “help the supply chain by providing clarity around upcoming projects”.
But he added: “I suppose you will also have to look at how the public and investor community react towards the publication and publicity around breaches. And you can consider whether NGOs might seek to amplify publication of breaches, which might in itself prompt action.”
Oil and gas operators within the North Sea, a lot of which have been laying aside plugging wells within the hope of passing on the associated fee to others, additionally face an unsure fiscal regime.
The UK’s new Labour authorities has mentioned it’ll enhance a levy on energy income and finish funding allowances.
The authorities can be consulting on a plan to halt the issuance of latest exploration licences.
The oil and gas business has warned that an excessively aggressive tax regime will reduce funding into the North Sea offshore sector, jeopardising jobs and damaging the availability chain wanted to speed up renewable energy.