NEO fined ￡100,000 for breaching its vent consent

·?????? Fine reflects the company’s lack of oversight?

·?????? Oil and gas producers must support drive to net zero greenhouse gas emissions?

·?????? Flaring and venting down by almost half between 2018-2022?

?NEO Energy Production UK Limited (NEO) has been fined ￡100,000 for breaching its combined vent consent for the Donan, Lochranza and Balloch fields, around 200km northeast of Aberdeen.?

The venting consent (issued for 1 January to 31 December 2022) allowed for 1.035 tonnes of venting per day, equivalent to an annual limit of just under 378 tonnes. But on 1 November 2022 the company admitted that the venting consent had been exceeded on 21 March of that year, and that it had exceeded the maximum annual venting consent by approximately 1,200 tonnes.??

The NSTA investigation has carefully assessed the breach and the reasons for it. The NSTA found that at the outset of 2022 NEO incorrectly allocated cold flare (venting) volumes to its flare consent. The issue remained undetected by NEO until October 2022. NEO engaged openly with the NSTA following its identification of the issue and applied promptly for a revised consent. NEO has co-operated with the investigation.??

In reaching a decision on the breach and the appropriate level of fine, the NSTA determined that NEO had shown a lack of oversight in failing to detect the breach for seven months, which, moreover, suggested a lack of appropriate internal oversight mechanisms. The NSTA has produced guidance with the aim of industry eliminating unnecessary and/or wasteful flaring and venting and supporting the drive to net zero which it expects operators to follow.?

The OGA Strategy includes a requirement for industry to reduce greenhouse gas emissions from sources such as flaring and venting to assist the drive to net zero. To support that, the NSTA monitors performance and works with industry to reduce emissions. In September 2023, we reported that North Sea emissions had been cut for three years in a row, and there had been a 23% drop in total emissions between 2018 and 2022.?

The OGA Plan, published on 27 March 2024, under the OGA Strategy, places further 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, said:

?“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.?

“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.”?