Britain’s North Sea Transition Authority (NSTA) has fined EnQuest Heather Ltd. £16.5 million ($22.12 million) for failing to decommission 33 inactive wells.
The cumulative fine for protracted non-compliance covered 33 wells in four licenses on the Alma, Galia, Broom and Dons fields.
In each case, the fine for the breach was £500,000 ($670,000).
All the fields ceased production between summer 2020 and spring 2021. According to the NSTA, the wells had been awaiting decommissioning since this time.
Decommissioning, the NSTA added, is required when a well, or other piece of infrastructure, has no further use.
The NSTA said it has repeatedly warned UK offshore operators that delays to well decommissioning increase costs to the Treasury and UK taxpayers as the associated expenses are tax-deductible; this can result in significant tax refunds.
In addition, the NSTA claimed an investigation revealed that EnQuest had adopted a conscious strategy of deferring the costs of fulfilling its P&A obligations when the wells had reached the end of their useful life. This included requesting deadline extensions, which were then missed, with a clear pattern, the NSTA said, of reneging on the company’s own decommissioning plans.
The NSTA estimates there are currently about 500 UK offshore wells at or beyond the deadline for P&A, with more than 1,000 likely to be due for decommissioning between 2026 and 2030.
