The Oil and Gas Authority (OGA) has started investigating the proposed sale by Esso Exploration & Production Ltd (EEPUK) to NEO of 13 producing fields, specifically Elgin Franklin, in the North Sea.
SANCTIONABLE
OGA said it was concerned that the transaction was not progressing as quickly as expected.
The regulatory authority has previously raised concerns generally about ”transaction drag” and the chilling effect it could have on the market.
Negotiations between the companies began in February 2021 and have not yet reached a conclusion.
“The consent of joint venture partners is required in order to effect the transfer,” said OGA in a statement.
“TotalEnergies E&P UK Limited (Total) is the operator of Elgin Franklin.
“There are eight joint venture partners in Elgin Franklin, including Total and EEPUK.
“Collaboration is an obligation in the OGA Strategy and failure to comply with that obligation is sanctionable under the Energy Act 2016.”
ASSETS
The agreement includes ownership interests in 14 producing fields operated primarily by Shell, including Penguins, Starling, Fram, the Gannet Cluster and Shearwater; Elgin Franklin fields operated by Total; and interests in the associated infrastructure.
One of the 14 fields has subsequently been removed from the package.
COMPLIANCE
The OGA Strategy states that “in undertaking relevant activities relevant persons must collaborate and co-operate with others who are seeking to acquire an interest or invest in offshore licences or infrastructure.”
The investigation includes serving the parties with information notices which ask them to account for their actions since the transaction was proposed but still allows the planned transaction to progress.
Parties with interests connected to the transaction must still meet their obligations under the OGA Strategy and industry voluntary codes of practice.
The OGA conducted a Thematic Review in October 2020 into industry compliance with regulatory obligations in six areas of interaction between the OGA and licensees.