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UK fines Repsol £160,000 for unauthorised flaring and venting of gas

Dec 17, 2023 Court Stories, ExxonMobil, Features / Columnists, News, Oil & Gas

– Guyana has nothing in place for such infractions

Kaieteur News – The United Kingdom has issued a fine to the energy company Repsol for unauthorized flaring and venting of gas, setting a stark contrast to Guyana’s handling of similar issues.

Guyana has no fines in place, and had imposed a paltry fee to American oil giant Exxon, giving permission to flare, when the company had a mishap at the Liza Phase One project.

The North Sea Transition Authority, which oversees offshore energy activities in the UK, imposed a penalty of £160,000. Repsol’s penalty of £160,000, equivalent to approximately US$203,200 at an exchange rate of 1.27, translates to US$2,783.56 per tonne of gas. This fine was for the flaring and venting of over 73 tonnes of gas, comprising 46.8 tonnes of hydrocarbon flaring and 26.8 tonnes of hydrocarbon venting.

The UK’s rigorous approach underscores a commitment to environmental protection and adherence to regulatory standards. The North Sea Transition Authority emphasized the importance of such compliance for maintaining the oil and gas industry’s social licence to operate and securing public trust. The authority has reported that the local industry has successfully reduced North Sea flaring by nearly half over four years, contributing to a 23% decrease in total greenhouse gas emissions between 2018 and 2022.

The decision to fine Repsol was based on the North Sea Transition Authority’s Financial Penalty Guidance. This guidance outlines that a penalty must effectively address non-compliance, dissuade future violations, and be proportionate to the significance of the failure. Repsol is required to pay the fine within 30 days of receiving the sanction notice, issued on December 5, 2023. This fine is the highest that the North Sea Transition Authority has issued to date for unauthorised emissions.

In contrast, Guyana refused to fine Exxon when the company flared gas beyond the start-up period for the Liza Phase One project. Its approach to ExxonMobil’s flaring was more accommodating. The government imposed a fee of just US$30 per tonne, gradually increasing to $50 per tonne. Exxon paid approximately US$9 million to Guyana’s Environmental Protection Agency (EPA) for flaring 279,537.33 tonnes of gas. If Guyana had prohibited flaring and imposed a fine – not a fee – at a rate commensurate with the UK’s, the total would have exceeded US$778 million (GY$162 billion) for the volume of gas flared by Exxon offshore Guyana.

While the UK’s established energy sector and stringent environmental policies contribute to its ability to enforce tougher penalties, the difference in approach is striking. The UK’s actions demonstrate a firm stance on environmental protection, while the situation in Guyana, stakeholders believe, demonstrates a willingness to excuse environmental harm.

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