BP Fined $69,000 for Failing to Report Offshore Well Results

OE Staff
Monday, July 26, 2021

The UK oil and gas regulator Oil and Gas Authority (OGA) on Monday fined BP with a £50,000 (around $69,100) fine and served it with a Sanction Notice for breaching a license condition by failing to report the progress and results of two extended well tests at the Vorlich offshore field.

"Having previously consented to the drilling of two development wells, the OGA granted further consent to conduct extended well tests (EWT) on two wells in August 2019. Those consents included the need for the licensee to provide regular reports during EWT operations (the reporting requirements).

BP was also required to submit a full report of the results and conclusions within 90 days of completion of the EWT operations.

"In November 2020, following an OGA inquiry, BP admitted that it had failed to report as required. The company’s own investigation found that 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," OGA said.

"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," OGA said. OGA also said that BP's failure to track work could have exposed BP and the OGA to reputational harm. Credit: Oil and Gas Authority

The reporting requirements, if followed, would have allowed the OGA to track that the EWT proceeded in line with the plan submitted by BP; and helped ensure the clean-up criteria being used did not result in excessive flaring, OGA said.

Jane de Lozey, OGA Acting Director of Regulation, 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, BP 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 30-million-barrel Vorlich offshore oil field in the North Sea started production in November 2020. The field has been developed through two wells tied to Ithaca Energy’s FPF-1 floating production facility, located around 240 kilometers east of Aberdeen and approximately 23 km from the UK/Norway median line. Water depths in the area range from approximately 75 – 90 meters.

Categories: Energy North Sea Activity Production Well Operations Regulations

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