BP fined £50k for North Sea well testing licence breach

BP has been fined £50,000 for breaching a licence condition regarding well test activity in the North Sea.

The energy giant has been fined and sanctioned by the Oil and Gas Authority (OGA), which may take further regulatory action regarding other matters it is examining in the UK Continental Shelf.

In this case, the regulator had previously consented to BP drilling two development wells and then giving further consent to conduct extended well tests on two wells in August 2019, subject to reporting requirements.

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However, in November 2020 and following investigations by the OGA, BP admitted that it had failed to report as required.

Since becoming aware of the breach, BP has 'engaged positively with the OGA,' the regulator said. Picture: Ben Stansall/AFP via Getty Images).

The company’s own investigation found internal communications had broken down, there was no guidance in place for managing OGA consents, and there was a lack of awareness among engineers of consent requirements, the regulator said.

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It added: “This lack of information unintentionally created an unregulated environment in which the OGA was unsighted of BP’s actions.

"This, in turn, could have exposed BP to a potential flare breach, of which the OGA would not have been aware and would have been unable to take prompt regulatory action. However, in this case there was no flare breach.”

This investigation and sanction, regarding the Vorlich field, follows the publication in October last year of a review by the OGA on industry compliance with regulatory obligations.

That document “recognised that industry is improving, following earlier interventions, but stressed the importance of maintaining the high standards now achieved by the majority, and the need for a minority to catch up”.

OGA acting director of regulation Jane de Lozey said: “We are committed to maintaining a strong regulatory regime to uphold standards and ensure a level playing field for licensees and operators in the UKCS.

“On this occasion BP has fallen short of our expectations but, since becoming aware of the breach, [it] has engaged positively with the OGA to investigate the cause of the failure and reaffirmed its commitment to compliance with its regulatory obligations in future.

“We will continue to work with industry to improve compliance, and we are currently considering other matters within the UKCS that may result in further regulatory action.”

The penalty is the latest for BP, which was fined billions regarding the 2010 Gulf of Mexico oil spill.

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