UK oil & gas player slapped with £100K fine in venting breach suppression drive

UK’s regulator North Sea Transition Authority (NSTA) has given NEO Energy Production UK Limited (NEO) a fine in a clampdown on venting and flaring lack of oversight on the UK Continental Shelf (UKCS), as the British company emitted greenhouse gases (GHG) from three fields into the atmosphere without permission.

While emphasizing that oil and gas producers need to support the drive to net zero GHG emissions, the NSTA has fined NEO Energy £100,000 (around $124,280) for breaching its combined vent consent for the Donan, Lochranza, and Balloch fields, around 200 km northeast of Aberdeen. The UK regulator has carried out an investigation to examine the breach and the reasons for it.

The venting consent, which was issued to the UK firm for the period from January 1 to December 31, 2022, allowed for 1.035 tonnes of venting per day – equivalent to an annual limit of just under 378 tons –  however, the company admitted on November 1, 2022, that the venting consent had been exceeded on March 21 of that same year by approximately 1,200 tons.  

During its probe into the breach, the NSTA found that NEO incorrectly allocated cold flare (venting) volumes to its flare consent at the outset of 2022, which remained undetected until October 2022. After spotting the issue, the North Sea operator engaged openly with the NSTA and applied promptly for revised consent.

As a result of the investigation, the regulator determined that NEO had shown a lack of oversight in failing to detect the breach for seven months, which suggested a lack of appropriate internal oversight mechanisms. Aiming to push the industry into eliminating unnecessary and wasteful flaring and venting while supporting the drive to net zero, the NSTA has produced guidance that it expects operators to follow. 

The oil and gas industry has already slashed emissions for three years in a row and nearly halved the North Sea flaring in four years as part of ongoing work, which has seen greenhouse gas emissions cut by 23% between 2018 and 2022. The NSTA’s OGA Plan, published in March 2024, places even more emphasis on emissions reduction, requiring industry to adopt electrification or other low-carbon measures to reduce production emissions. 

Jane de Lozey, NSTA Director of Regulation, commented: “Producers perform a vital job in supporting UK security of supply, but they must do so within the consents they are given. We welcome the industry’s sustained efforts in ensuring that emissions are falling year on year, noting that flaring and venting have been reduced by almost half since 2018.”

The fine NEO was given came on the heels of the £160,000 fine Repsol was presented with for a flaring and venting breach and three operators getting a fine totaling £265,000 as NSTA moved to enforce net zero and security of supply requirements. In addition, Shell and BP were each fined £50,000 for breaching production consents and license breach, respectively.

“However, we take the cases where regulatory obligations are not met very seriously and do not hesitate to take firm action, as this fine demonstrates,”  highlighted de Lozey.