OGA Launches License Breach Investigation
The UK Oil and Gas Authority (OGA) has announced that it has opened an investigation into a possible breach of field production consents, which it notes is contrary to the requirements of the licenses.
The investigation follows an enquiry which concluded that there was sufficient initial evidence to merit a full Investigation into a potential failure to comply with such consents, the OGA noted. The investigation will gather and assess further information to enable the OGA to reach a decision, offer the company involved the opportunity to provide written representations, and decide how the case should be resolved, among “other things”, according to the OGA.
The OGA highlighted that the investigation follows the publication of the thematic review into industry compliance with regulatory obligations in October 2020. The review examined compliance in six areas of interaction between the OGA and licensees and identified some very good, and improving, practice, but noted the need for further improvement. The review also warned that sanctions could follow in cases where breaches were found.
This thematic review into industry compliance followed a June 2019 OGA letter to licensees and infrastructure owners which outlined the OGA’s regulatory approach. While the letter praised a great deal of constructive engagement, it also noted that ”too many issues [were] taking too long to resolve”.
Last month, the OGA announced that it had fined BP plc $69,089 (GBP 50,000), and served the company a sanction notice, for breaching a license condition by failing to report the progress and results of two extended well tests.
The OGA, which has a duty to regulate the industry, has communicated to the sector the strategic significance the organization places on regulatory compliance to support the industry’s social license to operate. According to its website, the organization’s role is to maximize the economic recovery of the UK’s oil and gas resources, while also supporting the move to net zero carbon by 2050. The OGA was created as one of the key recommendations of Sir Ian Wood’s 2014 Review of the UK Continental Shelf.
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