PSA Norway: Licencees must support and challenge the operator

Licensees on the NCS must support and challenge the operator, be a competent collaborator and help ensure prudent petroleum activity in Norway, the Petroleum Safety Authority Norway has said. But not all of them do that, so the PSA has begun checking up.

“The regulations set clear requirements for the licensee’s role in a production licence, even though day-to-day work is assigned to the operator. They must contribute actively and check that the operator is complying with regulatory provisions,” observes Finn Carlsen, the PSA’s director of professional development.

“Our follow-up of licensees has earlier been done largely in connection with other supervisory activities, or in a collective approach to the companies,” Finn Carlsen says.

“The latter involved informing licensees about their role, duties and responsibilities. What’s new now is that we’re opting to conduct dedicated audits of a specific licensee.

“We then look at how the company is handling its role in the production licence, whether its management systems are good and whether it’s complying with the regulatory requirements.”

Breaches

An audit last autumn of the way Hess Norge is discharging its responsibilities as a Valhall licensee identified serious breaches of the regulations, and led to an order to correct these.

“We found serious deficiencies in the way Hess managed its activities, and a failure to satisfy regulatory requirements for HSE management,” says Carlsen.

One of the PSA’s directors of supervisory activities for many years before moving to his current job on 1 February, he took part in the Hess audit team. The US company was chosen for a check in part because of its position as majority partner in Valhall, with 64 per cent, and the only other licensee in the field with operator BP.

MoreThe PSA is planning to conduct more audits of the licensee’s role in production licences in the time to come, Carlsen reports.

“Licensees must familiarise themselves with their obligations, and assess whether their management systems function and are tailored to these duties.

“And they must ensure that they have the necessary capacity and expertise to deal with the commitments and responsibilities they have in their production licences.

“It’s the licensee’s duty to contribute in the production licence and check that the operator is managing the activities well.”

Duty to see to it

The licensee must ensure that the operator is able to fulfil its responsibilities, and has a duty to see to it that these obligations are discharged in accordance with the regulations.

At the same time, the licensee is under an obligation to act should any conditions fail to confirm with the regulatory requirements. In particular, it must see to it that the operator is properly equipped in key areas – such as an appropriate management system, an adequately qualified organisation and sufficient capacity.

The licensee is also required to check the operator’s work on issues given particular priority by the authorities, and for key applications to the authorities.