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PF v BP Exploration Operating Company (‘BP’)
Jul 29, 2020
On sentencing, Sheriff Napier made the following statement in court:
“In this Summary prosecution the accused company (BP) has pled guilty to having committed a contravention of the Offshore Petroleum Activities (Oil Pollution Prevention and Control) Regulations 2005 and the Pollution Control Act 1996 by discharging crude oil into the sea during start-up operations in relation to well A21 in the Clair field in Scottish waters of the North Sea.
The incident occurred almost four years ago on 02 October 2016 and this is the first time the case has come to the attention of the court. This delay is a matter for concern. I am told that the accused company promptly reported the matter to the Department for Business, Energy and Industrial Strategy (‘BEIS’) that day with the final unpermitted discharge quantity being reported to BEIS the following day. I am also told that BEIS then conducted an investigation and subsequently reported the matter to COPFS on 11 October 2017. I have been given no information to indicate that the investigation was particularly complex. Certainly the circumstances seem relatively straight forward and simple to understand so that it is not clear why that initial investigation took a full year to complete and report. Of equal concern, however is the delay in initiating proceedings once the case had been reported. I am told that following the reporting of the case to COPFS in October 20017 it took a full 9 months before any further action was taken by the Crown when they sought clarification as to the identity of BP’s legal agents and then almost 2 years after the case had been reported it was eventually allocated to a procurator fiscal depute since when there had been ongoing discussions to attempt to resolve the matter without a trial. These periods of inactivity (or at best limited activity) on the part of the Crown account for a full 2 years of the delay in instituting proceedings. I am assured by a senior member of what appears to be called the COPFS Health and Safety Investigation Unit, North that systems are now in place to avoid such delays in the future but those should of course have been in place long ago.
All oil discharges from offshore oil and gas installations must be carefully controlled to minimise contamination of the marine environment and the life it supports. The Offshore Petroleum Activities (Oil Pollution Prevention and Control) Regulations 2005 (‘the Regulations’) prohibit the discharge of oil into relevant waters other than in accordance with the terms and conditions of a permit which is issued by BEIS. The concentration of oil in produced water discharges, as averaged over a monthly period, must not exceed 30 milligrams of oil per litre of water (‘mg/l’). The maximum permitted concentration of oil must not exceed 100 mg/l at any time. The quantity of dispersed oil must not exceed 1 tonne in any 12 hour period. These regulatory limits are included in Oil Discharge Permits that are granted by BEIS to those who operate offshore oil and gas installations. Operators of these installations must identify all planned oil discharges to relevant waters and apply for the appropriate permit on a yearly basis. BEIS granted BP oil discharge permit OLP/70/6 (Version 2) in respect of Clair on 25 May 2016. The unpermitted discharge of the 02 October 2016 contravened the terms of this permit.
BP intended to start production from a newly drilled well on Clair (well ‘A21’), start-up referring to the first time that hydrocarbons are produced by a well. This was not a routine operation and as such there was a specific written procedure prepared by BP titled "Production Well A21 Start Up/Shutdown" which was to be followed in order to carry out this operation. The procedure specified all of the tasks to be undertaken and it was to be followed by all of the personnel involved.
The start-up of A21 commenced on 30 September 2016.
The well started to flow on 01 October 2016. Initially, high oil in water samples were recorded however this was not unexpected due to the displacement of drilling chemicals which can interfere with the analysis of the sample. By midday on 01 October the samples were showing in excess of 300 mg/l of oil in water. Analysis revealed the presence of drilling chemicals, which at that time explained the high results. It was the role of the Offshore Chemist on board Clair to take and analyse the samples. The Chemist was on shift the night of 01 October 2016. On starting his shift he was informed that the oil in water samples were high (between 100-200 mg/l) however this was to be expected with a new well. The last sample that was communicated to the control room was taken at 02:20 on 02 October 2016, which gave a result of 86 mg/l and was assumed to indicate that the performance of the water treatment process was improving and the well was cleaning up. Subsequent samples were taken at 03:30 (387 mg/l), 05:00 (358 mg/l) and 06:15 (320 mg/l). The Chemist did not pass on these results to the control room; and the control room did not query why they had not received them. This meant that an indicator of deteriorating water treatment was missed and there was a missed opportunity to take remedial action to prevent or minimise quantities of water with a higher oil content being discharged to sea. At around 09:30 hours on 02 October 2016 a crew member on Clair noticed oil coming from the coalescer water pump. It was discovered that there was crude oil present at the seal of the pump and that the pump was smoking. The pump was for water only and there should not have been any oil present. Other equipment involved in the separation process for A21 was checked and also revealed the presence of crude oil. It was established that the emulsified mix of oil and water was flowing through the separation system ultimately ending up in the produced water skimmer before being discharged to sea. A sample was taken from the produced water skimmer. At approximately 10:15 hours the sea around Clair was observed to be dark with the crude oil that was being discharged. At this time a platform shutdown was ordered.
The final quantity of crude oil discharged to sea was calculated by BP to be 95 tonnes and this calculation was accepted by BEIS and as I understand it the Crown.
The investigation revealed that regular water sampling should have been in place, with the results of this being fed back to the control room. On the morning in question the last result was provided at 02:20 hours. The Procedure did not specify that the Chemist should call the results in timeously, nor did it specify that the control room should contact the Chemist to request results that were late.
Whilst investigating the matter BEIS were of the view that BP’s procedure in place for A21 was not sufficient to prevent a further discharge of oil during future operations. BEIS issued BP with an Enforcement Notice requiring them to take certain steps by 30 November 2016 and 31 January 2017. BP complied with this Notice and it was revoked on 12 December 2016.
Clearly the intention of the regulations is to control the environmental impact of hydrocarbon recovery activities. I am told that there was no evidence, or no discernible evidence, of environmental harm. BEIS confirmed that there was no significant impact to the environment as a result of this incident. Due to weather conditions on the day the crude oil was taken out into the North Atlantic, where it would have dispersed over a few days.
In mitigation I am told that although BP had an ‘Operating Management system’ in place designed to achieve compliance with environmental regulation and drive continuous improvement which met the International Environmental Management Standard (ISO 14001) and they had specific ‘management of change’ plans for the bringing into production of this well. Although an additional chemist had been employed to provide round the clock sampling cover the plans did not require the reporting of adverse samples to the control room so that early shut down could be initiated as required. It is accepted by their plea of guilty that the controls associated with the start-up procedure were inadequate. The company’s response after the spill is described as robust prompt and effective and is not criticised by the Crown. The relevant authorities were contacted. The company’s emergency response team mobilised and monitoring of the spill was carried out. The company subsequently reviewed and revised its start-up procedures.
In imposing sentence I have to set the accused company’s breach against the maximum penalty of £10,000 prescribed by Parliament. I require to take into account the size of the company, its ability to pay a fine and its record of previous convictions. I also require to take into account the company’s response to the oil spill (which appears to have been responsible once the spill was recognised); its co-operation with the investigating authorities; its apology; and its early plea of guilty. As to the accused company’s record there are three prior convictions libelled, two under the Health and Safety at Work Act and one under the Oil Pollution Act 1971 (where the £40,000 penalty on summary conviction was higher than the maximum I can impose today). Although I have not been provided with detailed information about the company’s current financial position it is said to be available but I consider that given the public nature of the company it is sufficient that I am told that the company is in a position to pay a fine within the maximum available.
Taking all matters into account including that the matter has been hanging over the company for an extended period of time it seems to me that the appropriate starting point for a penalty is £9,500. As I am required to do I will give credit for the early plea and reduce that fine to £7000 which will be payable within 28 days and be recoverable by Civil Diligence."
28 July 2020