Disputes and Sanctions

The Disputes and Sanctions Team sits within the NSTA's Regulation Directorate to address disputes between relevant persons and compliance with regulatory obligations.

NSTA's measured escalation process

The NSTA’s escalation process describes the steps the NSTA will usually take leading up to a decision whether or not to exercise its powers, and the process is illustrated in the figure below:

(It is noted that the data in the graphic above is continually reviewed and may be subject to minor amendment following such review)

Case Register

When the NSTA launches an investigation, a summary of this will be recorded in our online case register. The latest version of the case register can be found here. Once an investigation has been concluded the outcome will be published by the NSTA on its case register. Details of cases archived since May 2019 can be found on our Regulatory Decisions (archived since May 2019) page.

Prioritisation

When considering whether or not to take action using the formal powers the NSTA will review that issue alongside its prioritisation criteria which includes, Strategic significance for the NSTA, NSTA time and cost; and Likelihood of success.

For more detailed information on the prioritisation criteria please refer to the NSTA’s Enquiry Guidance.

Thematic Review

In October 2020 the NSTA published a Thematic Review into Industry Compliance with Regulatory Obligations. The review recognised that industry was improving, following earlier interventions, but stressed the importance of maintaining the high standards achieved by the majority, and the need for a minority to catch up. In particular, the review noted that there remained room for improvement around managing production, flare and vent consents and the timeliness of licence extension requests. The observations made in the review remain relevant.

The review looked at six areas of interaction between licensees and the NSTA and examined the reasons why some licensees were tripping up, while others were doing a good job. The six areas investigated were:

Licence Mechanics (the process of applying for, extending and renewing licences)
Flaring, Venting and Production Consents
Pipeline Works Authorisations
Wells Consents
Data Requirements (Data reporting and Information and Samples Plans)
Statutory Notification of Meetings

The NSTA’s Regulatory Approach

On 4 June 2019, Tom Wheeler, the NSTA's Director of Regulation, wrote to all licensees and infrastructure owners regarding the next stage of our regulatory approach. The text of the letter can be viewed here

Consultation on NSTA approach to Offshore Merger and Acquisition (M&A) Transactions

On 17 May 2022, Tom Wheeler, the NSTA's Director of Regulation, wrote to offshore licensees highlighting that the NSTA will launch a consultation this summer intended to inform guidance setting out how the NSTA expects co-venturers to approach M&A transactions and what conditions co-venturers can reasonably put on their consent to transactions. The letter can be viewed here.

Quick links to Guidance

The NSTA have published a range of guidance which can be accessed (by clicking the graphics) below:

Enquiry Guidance

When an issue has not been resolved by stewardship, facilitation or enhanced facilitation it will be reclassified as a case.The Enquiry process acts as a filter to enable the NSTA to assess the most appropriate course of action.

Sanction Procedure

The NSTA can give a person a sanction notice if it considers that the person has failed to comply with a ‘petroleum-related requirement’, which is defined as either a duty to act in accordance with the NSTA Strategy, a term or condition of an offshore licence, or a requirement imposed by specified provisions in the Energy Act 2016.

Financial Penalty Guidance

Guidance as to the matters to which the NSTA will have regard when determining the level of financial penalty in a financial penalty notice.

Guidance on Disputes over Third Party Access to Upstream Oil and Gas Infrastructure

If a third party is unable to agree satisfactory terms of access with the owner of upstream oil and gas infrastructure, the third party seeking such access can – and in line with the Infrastructure Code of Practice may have committed to – make an application to the NSTA to require access to be granted and to determine the terms on which it is to be granted. The NSTA’s guidance on disputes over third party access to upstream oil and gas infrastructure sets out the requirements and obligations on all parties. It also sets out the approach the NSTA would take in handling applications and the principles the NSTA would expect to be guided by in determining terms of access.

Dispute Resolution Guidance

A wide range of disputes can be referred to the NSTA under the provisions of Part 2 Section 2 of the Energy Act 2016.The NSTA’s dispute resolution guidance sets out the requirements and obligations on all parties. It also sets out the approach the NSTA would take in handling disputes and the principles the NSTA would expect to be guided by in determining an optimal outcome that the NSTA considers will best contribute to the fulfilment of the principal objective to maximise the economic recovery of UK petroleum whilst having regard to the need to achieve an economically viable position for the parties.

Guidance on satisfactory expected commercial return (SECR)

This guidance sets out the approach the NSTA will usually take in assessing whether a project achieves a SECR. The NSTA is aware companies use a wide range of metrics and inputs in assessing their returns, not all of which are included in the guidance. The NSTA will assess SECR only for the purposes of and as set out in the NSTA Strategy. Where the SECR safeguard is applied, the NSTA aims to take a pragmatic approach, including having discussions with the companies involved, to understand the project.

Contact us:

For all general enquiries, please contact: disputesandsanctions@nstauthority.co.uk