Latest news with #NorthSeaTransitionAuthority
The National
4 days ago
- Business
- The National
North Sea oil firms warned of fines over well decommissioning delays
The North Sea Transition Authority (NSTA), the industry regulator, said firms are "running out of time" to address a backlog of more than 500 wells needing to be plugged. The estimated cost of decommissioning these wells is £41 billion, which is shared between the private sector and the taxpayer according to BBC reports. READ MORE: 'No way' convicted felon Donald Trump should be welcomed in Scotland, Greens say Further delays could add £4 billion to the total cost, the NSTA warned. When an oil well reaches the end of its productive life, the operator is responsible for permanently decommissioning it. NSTA launched an investigation after identifying hundreds of wells that had missed their plugging deadlines. The regulator said the delays risk rig operators and supply chain companies relocating their equipment and personnel to other regions. If that happens, the regulator believes future decommissioning work in the North Sea would become more expensive. Currently, there are not enough rigs in UK waters to carry out all the forecasted decommissioning work. If the backlog continues, NSTA warned that more than 1000 additional wells could require decommissioning by the end of the decade. Pauline Innes, NSTA's director of supply chain and decommissioning, called on companies to act without delay. She said: "The stark reality is that operators are running out of time to get to grips with the backlog as more contractors consider taking their rigs abroad, which damages the supply chain's ability to meet demand and remain cost competitive." She added that while NSTA is willing to support firms, it will "get tough" on persistent delays. READ MORE: Lesley Riddoch: The SNP must take up zonal pricing fight – why aren't they? In 2024, only 103 wells were decommissioned to the final abandonment stage, with some form of work completed on 223 wells. However, 300 wells per year need to be fully decommissioned to clear the backlog. Industry body Offshore Energies UK (OEUK) said businesses are working to meet their obligations, but challenges remain. Decommissioning manager Ricky Thomson said: "Policy instability, including the Energy Price Levy and pauses in the Environmental Assessment process, has introduced significant uncertainty for the sector resulting in project delays and cost increases." He said the sector is working with the Government to ensure stable regulatory and fiscal conditions for safe, efficient decommissioning.
Yahoo
04-07-2025
- Business
- Yahoo
TotalEnergies UK gas assets to be bought by Prax remain unsold
By America Hernandez PARIS -The TotalEnergies West of Shetland offshore assets it agreed to sell to Prax Group last year remain under the French oil major's ownership, it said on Wednesday, so will not be subject to disposals resulting from liquidation proceedings affecting the British company. "The transaction to sell our West of Shetland asset to Prax has not yet completed and as such we remain the operator of the Shetland Gas Plant and related fields," TotalEnergies EP UK said in its statement. TotalEnergies had agreed to sell Prax a portfolio of mature offshore fields producing about 7,500 barrels of oil equivalent per day, plus exploration licences and a gas plant, in a deal that would involve transferring employees to Prax. Prax Group's parent company, State Oil, as well as Prax's Lindsey refinery in Britain entered liquidation proceedings this week, with an administrator saying that all financial options were being considered. Those included a sale of Prax's upstream business and retail operations in Britain and Europe, all of which remain outside insolvency. A spokesperson for the British oil and gas regulator, the North Sea Transition Authority (NSTA) declined to comment on whether the sale of the TotalEnergies assets to Prax could proceed given the insolvency proceedings. The NSTA referred Reuters to its rules on change of ownership of oil and gas assets, which say the regulator considers the financial and technical capability of potential buyers to be critical when assessing transactions for approval. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
02-07-2025
- Business
- Reuters
TotalEnergies UK gas assets to be bought by Prax remain unsold
PARIS, July 2 - The TotalEnergies ( opens new tab West of Shetland offshore assets it agreed to sell to Prax Group last year remain under the French oil major's ownership, it said on Wednesday, so will not be subject to disposals resulting from liquidation proceedings affecting the British company. "The transaction to sell our West of Shetland asset to Prax has not yet completed and as such we remain the operator of the Shetland Gas Plant and related fields," TotalEnergies EP UK said in its statement. TotalEnergies had agreed to sell Prax a portfolio of mature offshore fields producing about 7,500 barrels of oil equivalent per day, plus exploration licences and a gas plant, in a deal that would involve transferring employees to Prax. Prax Group's parent company, State Oil, as well as Prax's Lindsey refinery in Britain entered liquidation proceedings this week, with an administrator saying that all financial options were being considered. Those included a sale of Prax's upstream business and retail operations in Britain and Europe, all of which remain outside insolvency. A spokesperson for the British oil and gas regulator, the North Sea Transition Authority (NSTA) declined to comment on whether the sale of the TotalEnergies assets to Prax could proceed given the insolvency proceedings. The NSTA referred Reuters to its rules on change of ownership of oil and gas assets, which say the regulator considers the financial and technical capability of potential buyers to be critical when assessing transactions for approval.
Yahoo
23-05-2025
- Business
- Yahoo
Labour's tax raid to trap 1.5bn barrels of oil and gas under North Sea
Labour's windfall tax on oil and gas producers will leave 1.5bn barrels of oil and gas stuck in abandoned North Sea oil wells, according to new analysis of the levy's impacts. The predicted output between now and 2050 has fallen 40pc from 3.6bn barrels of oil equivalent to just 2.1bn barrels, according to a report from investment bank Stifel. The findings are based on data supplied by the North Sea Transition Authority (NSTA), the Government's oil and gas regulator. The slump in expected output comes after a surge in the number of companies abandoning productive wells, following Rachel Reeves's decision to extend the tax on oil and gas profits to 78pc. Ed Miliband, the Energy Secretary, has also banned new drilling. Christopher Wheaton, a Stifel analyst, warned that the tax take from oil and gas was also set to plummet, partly because of declining production volumes but also because the price of oil has fallen so far that there is no longer a windfall to tax. The report said: 'The UK North Sea industry is being destroyed by taxes that are too high, taxes which threaten energy security, jobs, investment and economic growth. 'The impact of lower investment and production is already being felt through job losses, lower tax receipts and more energy imports. 'The Office for Budget Responsibility's current forecast for North Sea tax receipts to 2030 is £10bn too high due to declining production and lower energy prices.' The forecast represents a potential headache for Ms Reeves, the Chancellor, who has left herself only a narrow margin to meet her fiscal rules and is already borrowing more than forecast. The UK has about 280 oil and gas fields that last year produced 29bn cubic metres of gas and 28m tonnes of oil. These amounts were lower than a decade ago when the UK produced 38bn cubic meters of gas and 38m tonnes of oil. The reduction has largely been driven by natural decline but experts have warned that recent tax raids on the sector have accelerated the North Sea basin's demise. The NSTA's 2023 production forecasts said that the UK would produce oil and gas equivalent to 46m tonnes of oil in 2028. But its latest forecasts, just issued, downgrade that to 40m tonnes, falling further to 33m tonnes in 2030. By 2040, the NSTA predicts the UK will be producing just 9m tonnes of oil and 4bn cubic metres of gas – way below what the country will still need by then, meaning more imports. The fresh forecasts suggest the windfall tax, or Energy Profits Levy, has roughly doubled the rate of decline. Robin Allan, the chairman of Brindex, an offshore industry trade body, said: 'An accelerated decline of North Sea output will see UK dependency on imports reach more than 85pc by 2030. The windfall tax is self-defeating and it should be removed.' The tax was first proposed by Labour in opposition but was adopted by the then Conservative government under Rishi Sunak in 2022 in response to the surge in oil and gas prices caused by the Ukraine conflict. Mr Sunak initially said it would only remain in place while the windfalls lasted. However, he and then Labour subsequently decided to retain it until 2030, even though oil prices have fallen from a peak fo $139 a barrel to about $60 now. Offshore operators say the tax is so high that there is now more incentive to decommission productive wells and claim the associated tax rebates than to expand production. Serica, one of the largest UK operators, separately warned on Thursday that Ms Reeves's windfall tax and Mr Miliband's ban on new exploration was killing off the UK industry. David Latin, Serica's chairman, said: 'The impact of the inappropriate fiscal environment, and the years of uncertainty, is taking a heavy toll. UK production fell 5pc in 2024, drilling activity is at a record low, 10,000 jobs have been lost and companies continue to exit the UK North Sea. 'All of this will reduce tax receipts going forward and, given demand which will not go away any time soon, lost production will have to be imported – imports which are worse for the environment since they involve significantly increased emissions.' A government spokesman dismissed criticisms, saying: 'The Government has reformed the Energy Profits Levy to support investment and give industry certainty and stability. 'We are delivering a fair and orderly transition in the North Sea, with the biggest ever investment in offshore wind and two first-of-a-kind carbon capture and storage clusters.' The Conservatives, the original architects of the tax, said the political consensus on the windfall levy was gone forever. Andrew Bowie, Conservative shadow energy spokesman, said: 'The report shows in the starkest terms what many have been warning about for months if not years – that the windfall tax is killing the North Sea oil and gas industry. 'Up to 10,000 people have already been laid off with 250 in the last weeks alone. And the new jobs promised in renewables just do not exist yet. Labour must think again and speed up any future fiscal arrangement for the North Sea before we see an entire industry disappear.' Richard Tice, energy spokesman for the Reform Party, said: 'A Reform government would encourage people in the oil and gas sector to get ready to explore when we win the next general election. We are urging them to have new licences ready to approve on an accelerated timeframe.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Powys County Times
25-04-2025
- Business
- Powys County Times
Fact check: Shipped liquid gas is more carbon intensive than UK gas
In Parliament an MP said that importing liquefied natural gas (LNG) has net emissions which are up to four times higher than those for North Sea gas. 'I remind the House that, for example, importing liquefied natural gas involves cooling gas to 160 degrees below zero, shipping it thousands of miles from Qatar and regasifying it at a port in this country,' he said. 'The net emissions are up to four times higher than those from North Sea gas.' Evaluation This only measures the emissions from the production and transport of liquefied natural gas. These production and transport emissions are around four times higher than those from domestically produced gas, according to an official report. However more significant emissions come from burning the gas. If this is taken into account then carbon emissions from LNG are only around 17% higher than those from domestic gas. The facts As was said in Parliament, LNG needs to be chilled until it is in liquid form, then put on a ship and transported from the country of origin to the final place where it is to be used. This is a much more energy-intensive process, so leads to considerably higher emissions. A report from the North Sea Transition Authority (NSTA) found that 'the average carbon intensity of imported Liquefied Natural Gas (LNG) is almost four times the carbon intensity of UK production'. But that report only measures emissions from the production and transport of the gas, not from its combustion, which is the main source of emissions from gas. To find the full difference in emissions between LNG and British gas, one must therefore add the emissions that are produced when the gas is burned by the end user. The International Energy Agency says that natural gas combustion results in 320 kilograms (kg) of carbon dioxide (CO2) per barrel of oil equivalent (boe). The NSTA report found that the transport and production emissions for domestic gas was 21 kg of CO2 per boe, and for LNG it was 79 kg. So the total CO2 emissions for transport, production and combustion of domestic gas would be 341 kg per boe, compared with 399 kg for LNG. That means that emissions for LNG are 17% higher. Links
