UK regulator serves Repsol with highest fine to date amid GHG flaring and venting crackdown

UK’s regulator North Sea Transition Authority (NSTA) has given Repsol North Sea Limited, previously known as Repsol Sinopec North Sea Limited, the highest fine issued so far on the UK Continental Shelf (UKCS) for emitting greenhouse gases from three fields into the atmosphere without permission.

As Repsol has been fined £160,000 (about $204.046) for a flaring and venting breach, amounting to more than 73 tons of gas, this fine recognizes that the company’s failure undermines public trust and confidence in the industry and raises questions about the firm’s attention to, and investment in, regulatory compliance, according to the regulator. The 73 tons of gas comprise 46.8 te of hydrocarbon flaring and 26.8 te of hydrocarbon venting.

While the highest fine previously issued by the NSTA was £150,000 (around $191,163), the Energy Act 2016 allows the UK regulator to issue a fine that goes up to £1 million (almost $1.28 million). Repsol, which operates the Fulmar platform east of Dundee in the North Sea, has received short-term flare and vent consents since January 2019 to cover necessary actions associated with post-cessation of production activities on Fulmar, Auk North, and Halley fields.  

According to the regulator, the short-term consents have noted that the main users of the Fulmar platform are now third parties since July 2020, thus, the Fulmar facility is providing oil and gas processing facilities for third parties. Back on July 1, 2022, the NSTA informed Repsol that there were no valid consents in place for Auk North, Halley, and Fulmar while emphasizing that continuing to flare or vent after consent expired on June 30, 2022, would be a failure to comply with regulatory requirements.  

Jane de Lozey, NSTA Director of Regulation, commented: “Reducing emissions and meeting regulatory requirements is absolutely essential if industry is going to maintain its social license to operate. Repsol has engaged with the NSTA to learn from its failings on this occasion and taken steps to ensure it does not happen again. 

“We will continue to ensure that operators comply with regulations in the North Sea and will not hesitate to take action on the occasions that they do not. The NSTA is always ready to work with operators to ensure they remain in compliance, or bring them back into compliance.” 

The UK regulator’s penalty is decided by reference to its Financial Penalty Guidance which states that a penalty should be effective in addressing the underlying cause of the failure to comply; dissuasive of future failure to comply; and proportionate to the significance of the failure. The financial penalty of £160,000 needs to be paid to the NSTA before it is submitted to the consolidated fund, which means it should be paid within 30 days of the sanction notice which was issued on December 5, 2023.

This fine comes after the UK regulator repeatedly told the UK oil and gas industry that complying with regulatory obligations is “vital” for sustaining the industry’s social license to operate, as noncompliance has the potential to undermine public confidence. The industry has already slashed emissions and nearly halved North Sea flaring in four years as part of ongoing work which has seen greenhouse gas emissions cut by 23% in total between 2018 and 2022. 

The NSTA recently launched a consultation on a draft plan that looks into four areas of its business – investment and efficiency, platform electrification and low-carbon power, inventory, and flaring and venting – to encourage industry to go further and faster on emissions reduction. The consultation closed on November 30.

Recently, 27 new licenses have been awarded as part of the 33rd oil and gas licensing round, with more to follow in the coming months. For the NSTA, this is “a clear sign” of the North Sea’s enduring appeal. In addition, 21 licenses were awarded in the UK’s first-ever carbon storage licensing round.