“9A The principal objective and the strategy (1) In this Part the “principal objective” is the objective of maximising the economic recovery of UK petroleum, in particular through— (a) development, construction, deployment and use of equipment used in the petroleum industry (including upstream petroleum infrastructure), and (b) collaboration among the following persons— (i) holders of petroleum licences; (ii) operators under petroleum licences; (iii) owners of upstream petroleum infrastructure; (iv) persons planning and carrying out the commissioning of upstream petroleum infrastructure; (v) owners of relevant offshore installations. (2) The [OGA] must produce one or more strategies for enabling the principal objective to be met. (3) A strategy may relate to matters other than those mentioned in subsection (1)(a) and (b). (4) For provision about producing and revising a strategy, see sections 9F and 9G.”
“9B Exercise of certain functions of the [OGA] The [OGA] must act in accordance with the current strategy or strategies when— (a) exercising functions under the other Parts of this Act (except Part 4), (b) exercising functions under Part 4, (c) exercising functions under Chapter 3 of Part 2 of theEnergy Act 2011 (upstream petroleum infrastructure), (ca) exercising functions under Part 2 of theEnergy Act 2016 , (d) exercising any function or using any power under a petroleum licence, and (e) exercising any other function or using any power— (i) to provide advice or assistance to another person, or (ii) to acquire, use or supply information, for the purpose of enabling the principal objective to be met. 9BA Exercise of certain functions of the Secretary of State (1) The Secretary of State must act in accordance with the current strategy or strategies when exercising the functions mentioned in subsection (2). (2) Those functions are functions under Part 4 to the extent that they concern reduction of the costs of abandonment of offshore installations and submarine pipelines (including the reduction of such costs by means of the timing of measures proposed in abandonment programmes and by the inclusion in such programmes of provision for collaboration with other persons).”
“28A Restriction on abandonment (1) A person to whom a notice may be given under section 29(1) in relation to an offshore installation or submarine pipeline may not abandon, or begin or continue the decommissioning of, the installation or pipeline unless an abandonment programme approved by the Secretary of State has effect in relation to the installation or pipeline. (2) A person who without reasonable excuse contravenes subsection (1) is guilty of an offence.”
“29.— Preparation of programmes. (1) The Secretary of State may by written notice require— (a) the person to whom the notice is given; or (b) where notices are given to more than one person, those persons jointly, to submit to the Secretary of State a programme setting out the measures proposed to be taken in connection with the abandonment of an offshore installation or submarine pipeline (an “abandonment programme”). (1A) The power to give a notice under subsection (1) is exercisable— (a) on the Secretary of State's own motion, or (b) at the request of any person to whom the notice may be given (whether or not the notice is given to that person). (2) A notice under subsection (1) shall either specify the date by which the abandonment programme is to be submitted or provide for it to be submitted on or before such date as the Secretary of State may direct. (2A) A person to whom a notice under subsection (1) is given— (a) must consult the OGA before submitting the abandonment programme to the Secretary of State, and (b) must frame the programme so as to ensure (whether by means of the timing of the measures proposed, the inclusion of provision for collaboration with other persons, or otherwise) that the cost of carrying it out is kept to the minimum that is reasonably practicable in the circumstances. (2B) When consulted under paragraph (a) of subsection (2A) the OGA must (in particular) consider and advise on— (a) alternatives to abandoning or decommissioning the installation or pipeline, such as re-using or preserving it, and (b) how to comply with paragraph (b) of that subsection. (3) A notice under subsection (1) may require the person to whom it is given to carry out such other consultations as may be specified in the notice before submitting an abandonment programme. (4) An abandonment programme— (a) shall contain an estimate of the cost of the measures proposed in it; (b) shall either specify the times at or within which the measures proposed in it are to be taken or make provision as to how those times are to be determined; (c) if it proposes that an installation or pipeline be left in position or not wholly removed, shall include provision as to any continuing maintenance that may be necessary. (5) A person who submits an abandonment programme to the Secretary of State under this section shall at the same time pay to him such fee in respect of his expenditure under this Part of this Act as may be determined in accordance with regulations under section 39. (6) The Secretary of State may exercise his powers under this section notwithstanding that an abandonment programme has previously been submitted for the installation or pipeline [in question if the Secretary of State has under section 32—] (a) rejected that programme, or (b) approved it (whether or not the approval has been withdrawn).”
“32.— Approval of programmes. (1) The Secretary of State may either approve or reject a programme submitted to him under section 29. (2) If he approves a programme, the Secretary of State may approve it with or without modifications and either subject to conditions or unconditionally. (2A) The modifications or conditions may (in particular) include modifications or conditions— (a) which are intended (whether by means of the timing of the measures proposed, the inclusion of provision for collaboration with other persons, or otherwise) to reduce the total cost of carrying out the programme, provided that they do not increase the total costs to be met by any person who is to be subject to obligations under the programme or under any other abandonment programme; (b) requiring the persons who submitted the programme to carry out and publish or make available to the Secretary of State and the OGA a review of the programme and its implementation including, where relevant, recommendations as to the contents and implementation of future abandonment programmes. (3) Before approving a programme with modifications or subject to conditions, the Secretary of State shall give the persons who submitted the programme an opportunity to make written representations about the proposed modifications or conditions. (4) If he rejects a programme, the Secretary of State shall inform the persons who submitted it of his reasons for doing so. (5) The Secretary of State shall act without unreasonable delay in reaching a decision as to whether to approve or reject a programme. (6) Before reaching a decision under this section the Secretary of State must— (a) consult the OGA, and (b) take into account the cost of carrying out the programme that has been submitted and whether it is possible to reduce that cost by modifying the programme or making it subject to conditions. (7) When consulted under subsection (6)(a), the OGA must (in particular) consider and advise on— (a) alternatives to abandoning or decommissioning the installation or pipeline, such as re-using or preserving it, and (b) whether section 29(2A)(b) has been complied with and, if it has not been, modifications or conditions that would enable it to be complied with.”
“42.— Validity of Secretary of State's acts. (1) If any person is aggrieved by any of the acts of the Secretary of State mentioned in subsection (2) and desires to question its validity on the ground that it was not within the powers of the Secretary of State or that the relevant procedural requirements had not been complied with, he may within 42 days of the day on which the act was done make an application to the court under this section. (2) The acts referred to in subsection (1) are— (a) the giving of a notice under section 29(1); (b) the approval of a programme under section 32; (c) the rejection of a programme under section 32; (d) a determination under section 34; (e) a determination under section 35; (ea) the giving of a notice under section 36A(2); (f) the giving of a notice under section 38(4).”
“2. Relevant persons must, in the exercise of their relevant activities, take the steps necessary to: a. secure that the maximum value of economically recoverable petroleum is recovered from the strata beneath relevant UK waters; and, in doing so, b. take appropriate steps to assist the Secretary of State in meeting the net zero target, including by reducing as far as reasonable in the circumstances greenhouse gas emissions from sources such as flaring and venting and power generation, and supporting carbon capture and storage projects.”
“26. Where this paragraph applies, by virtue of paragraphs 27 or 28, relevant persons must allow others to seek to maximise the value of economically recoverable petroleum from their licences or infrastructure including by divesting themselves of such licences or infrastructure to other financially and technically competent persons who are able to recover economically recoverable petroleum. 27. Where relevant persons are not able to ensure the recovery of the maximum value of economically recoverable petroleum from their licences or infrastructure for financial reasons they must seek to secure investment from other persons, including by allowing others to undertake such investment as a sole risk project. If relevant persons are not able to secure sufficient investment in a reasonable time the obligation in paragraph 26 applies. 28. The obligation in paragraph 26 applies in all other circumstances where relevant persons decide not to ensure the recovery of the maximum value of economically recoverable petroleum from their licences or infrastructure. This includes where there are technical or other non-economic reasons. 29. Where a relevant person is seeking to comply with the obligation in paragraph 26, that person must: a. provide access to sufficient relevant data and other information, including to allow bona fide persons to establish technical and financial competence; b. seek to do so without demanding compensation in excess of a fair market value or unreasonable terms and conditions; and, c. in order that other financially and technically competent persons who, including at the time of divestment, are able to recover economically recoverable petroleum may do so. 30. Where after a reasonable period the relevant person is unable to secure alternative funding or to divest themselves of the licence or infrastructure then, if the recovery of the maximum value of economically recoverable petroleum would achieve a satisfactory expected commercial return they shall surrender the related licences.”
““Economically recoverable” in relation to petroleum means those resources which could be recovered at an expected (pre-tax) market value greater than the expected (pre-tax) resource cost of their extraction, where costs include both capital and operating costs (including carbon costs) but exclude sunk costs and costs (such as interest charges) which do not reflect current use of resources. In bringing costs and revenues to a common point for comparative purposes a 10% real discount rate will be used. Where relevant, UK Government carbon appraisal values for all greenhouse gas emissions will be used combined with the associated real terms social discount rate; “Satisfactory expected commercial return” means an expected post-tax return that is reasonable having regard to all the circumstances including the risk and nature of the investment (or other funding as the case may be) and the particular circumstances affecting the relevant person.”
“17. The legal test for apparent bias is very well established. Mr Faure reminded us of the famous statements of Lord Hewart CJ in R v Sussex Justices ex parte McCarthy[1924] 1 KB 256 at 259 that “it is not merely of some importance but is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done” and that “[n]othing is to be done which creates even a suspicion that there has been an improper interference with the course of justice.”
“What does fairness require in the present case? My Lords, I think it unnecessary to refer by name or to quote from, any of the often-cited authorities in which the courts have explained what is essentially an intuitive judgment. They are far too well known. From them, I derive that (1) where an Act of Parliament confers an administrative power there is a presumption that it will be exercised in a manner which is fair in all the circumstances. (2) The standards of fairness are not immutable. They may change with the passage of time, both in the general and in their application to decisions of a particular type. (3) The principles of fairness are not to be applied by rote identically in every situation. What fairness demands is dependent on the context of the decision, and this is to be taken into account in all its aspects. (4) An essential feature of the context is the statute which creates the discretion, as regards both its language and the shape of the legal and administrative system within which the decision is taken. (5) Fairness will very often require that a person who may be adversely affected by the decision will have an opportunity to make representations on his own behalf either before the decision is taken with a view to producing a favourable result; or after it is taken, with a view to procuring its modification; or both. (6) Since the person affected usually cannot make worthwhile representations without knowing what factors may weigh against his interests fairness will very often require that he is informed of the gist of the case which he has to answer.”
“70 In their written submissions, the claimants say that this central obligation imposes on the petroleum industry both the MER and a duty to assist the Secretary of State in meeting the net zero target. The OGA also has to act in accordance with this central obligation. The claimants then say that, according to the OGA strategy, the “MER is therefore no longer an isolated objective, but rather has to be read together with [the] obligation to assist the Secretary of State to meet the net zero target”
“Power to act, including but not limited to: Whether the NSTA has discretion over whether to act or not? Is there an urgency to act now? Failure to comply with petroleum-related requirements For a sanctions case, the Disputes and Sanctions team will carry out an Initial Assessment to examine whether there is sufficient initial evidence that there has been a failure to comply with a petroleum-related requirement (for example, potential non-compliance with the NSTA Strategy) and whether a full Investigation under the NSTA’s sanctions powers is merited or whether it is better to use other regulatory levers/powers (whether formal or informal) at the NSTA’s disposal. The NSTA notes that the evidential threshold for commencing its Investigations is low. A full investigation will be handled in accordance with the NSTA’s Sanctions procedure Impact on the NSTA’s Strategy, including but not limited to: Value of barrels of oil (or equivalent) at risk; Whether the preferred course of action changes in a positive way the future behaviour of the parties involved and industry in general; and Whether the risk to the Strategy is immediate and whether that risk is direct Strategic significance for the NSTA, including but not limited to: Would the preferred course of action establish a material principle or precedent? What is the significance of the failure or suspected failure to comply with the objectives of the Strategy? What is the risk the issue raises to any NSTA priorities, as set out in the NSTA’s annual report, its corporate plan or in any NSTA publication? Is there any risk to the reputation of the NSTA? Likelihood of success The NSTA may also take into consideration the likelihood of success of any preferred course of action. The NSTA does not, however, intend to put much weight on this factor in the assessment phase, as it may only be possible to determine ‘success’ if the issue requires further intervention NSTA time and cost, including but not limited to What cost will the proposed course of action impose on the NSTA (including the opportunity cost of not progressing other important cases/projects)? Is the potential cost proportionate to the proposed course of action? Are there adequate responses to carry out the action in a timely manner? What are the comparative benefits to the Strategy of using those resources in other ways?”
“100. The following principles can be gleaned from the authorities: (1) The obligation upon the decision-maker is only to take such steps to inform himself as are reasonable. (2) Subject to a Wednesbury challenge, it is for the public body, and not the court to decide upon the manner and intensity of inquiry to be undertaken (R (Khatun) v Newham LBC[2005] QB 37 at paragraph [35], per Laws LJ). (3) The court should not intervene merely because it considers that further inquiries would have been sensible or desirable. It should intervene only if no reasonable authority could have been satisfied on the basis of the inquiries made that it possessed the information necessary for its decision (per Neill LJ in R (Bayani) v. Kensington and Chelsea Royal LBC(1990) 22 HLR 406 ). (4) The court should establish what material was before the authority and should only strike down a decision by the authority not to make further inquiries if no reasonable council possessed of that material could suppose that the inquiries they had made were sufficient (per Schiemann J in R (Costello) v Nottingham City Council(1989) 21 HLR 301 ; cited with approval by Laws LJ in (R (Khatun) v Newham LBC (supra) at paragraph [35]). (5) The principle that the decision-maker must call his own attention to considerations relevant to his decision, a duty which in practice may require him to consult outside bodies with a particular knowledge or involvement in the case, does not spring from a duty of procedural fairness to the applicant, but from the Secretary of State’s duty so to inform himself as to arrive at a rational conclusion (per Laws LJ in (R (London Borough of Southwark) v Secretary of State for Education (supra) at page 323D). (6) The wider the discretion conferred on the Secretary of State, the more important it must be that he has all relevant material to enable him properly to exercise it (R (Venables) v Secretary of State for the Home Department[1998] AC 407 at 466G).”
“20. Given the nature of the economic analysis that the Economics Team is currently requested to undertake (see paragraph 12 above), and in line with my understanding of the NSTA’s obligations as set by the OGA Strategy (as amended in 2021 as described above), it will be relevant in any analysis of economic recoverability of petroleum undertaken by the Economics Team to take into account an estimate of the societal impact of the carbon emissions (not just the UK ETS carbon cost that I explain in paragraph 25 below). This is because the recovery of petroleum has carbon emissions implications, which in turn has societal costs, so those societal costs of carbon emissions are inherently relevant to any economic analysis of the recovery of petroleum. I cannot think of a situation or specific example in which it would not be relevant for the Economics Team to take the societal impact of any change in carbon emissions into account in its analysis of economic recoverability. 21. This is consistent with HM Treasury Guidance on Appraisal and Evaluation in Central Government (the “Green Book”), which (among other things) requires Government (and by extension therefore the NSTA) to take full account of the impacts of climate change on society in appraising projects and activities [ACM2/018-182]. It is relevant to calculate the societal value of emissions in this way where there are expected to be quantifiable, non-zero changes (increases or reductions) in the volume of emissions as a result of a proposed project or activity. I am not aware of any explicit definition or guidance produced by the NSTA on the use of this term or its application to activities undertaken by relevant persons. In my view that is because it is intended to be interpreted as described here, in that the societal carbon costs will always be considered relevant where there are changes in the volume of emissions. Failure to include these societal carbon costs in economic appraisals would therefore not provide a robust assessment of the full impact of production related activities, which could in turn lead to incorrect conclusions on the net societal economic value of projects or options therein. To explain what I mean by the societal impact or societal costs of carbon emissions, I refer to the OGA Plan to reduce UKCS10 greenhouse gas emissions, which was published on27 March 2024 (the “OGA Plan”) [ACM2/183-196], and to which I also referred in paragraph 8 of my First Witness Statement. The OGA Plan explains, at paragraph 7, that “It is important that industry recognises that the full societal costs of emissions are markedly larger than those that they incur directly through market-based carbon prices. In preserving their social licence to operate, relevant persons should therefore also consider as one factor the societal costs of emissions in their overall decision making.””
“77 More broadly, in the Abolition of Vivisection case May LJ stated at para 1 that scientific analysis “is not immune from lawyers’ analysis” but a reviewing court must be “careful not to substitute its own inexpert view of the science for a tenable expert opinion”
“2.16 It is appropriate for the Owners to have assessed a CoP date based on the TEPUK data from late 2022 / early 2023 and planned for CoP accordingly. This aligns with the NSTA Stewardship Expectation 10 on Cost Effective Decommissioning as a planned and orderly transition, from late life operation through CoP into decommissioning, that avoids reactive decommissioning is a key consideration in delivering the Central Obligation.”
“3.13 Nobel has stated in its6 January 2025 letter that, given the NSTA’s view on post-CoP running costs being considered high and the planned timetable as ambitious, the proper approach would be to postpone CoP to a point at which a sensibly timed decommissioning plan can be executed. The NSTA, in forming their position recognises that the costs are high, and this is due to maintaining the asset to the required Safety Case standards while still on-station and that the proposed plan is ambitious, however, the drive to achieve the ambitious timeline is to minimise the post-CoP running costs. Regardless of timing to the decommissioning programme, there is a risk of high post CoP running costs. It should also be recognised that delayed decommissioning would very likely result in higher overall decommissioning costs, such as increased rig rates for well decommissioning. The rig rates are increasing year-on-year and are likely to continue to do so as supply becomes scarcer (rigs being retired and / or going to other regions).”