The North Sea’s biggest oil and gas infrastructure company is risking wildfires and environmental disasters, experts have warned, as documents show it is failing to cap old oil wells on time and missing decommissioning deadlines by in a decade.
Last year, fossil fuel firm Perenco faced controversy after an oil spill from its Poole Harbor operations contaminated the Dorset site, which is internationally recognized for its ecological importance. The RSPB reported oil birds in the water at Europe’s largest natural harbor which is one of the UK’s most protected areas. Perenco promised that it would not happen again and pledged to pay for the damage caused.
Documents released to climate website Resource Material following a freedom of information request reveal that the Anglo-French oil group has repeatedly missed government deadlines to decommission its oil wells for up to a decade.
The company owns 363 offshore wells in the North Sea and shutting down the aging infrastructure will cost up to £8m each.
Critics have raised concerns that the company has a financial incentive to delay cleaning up end-of-life assets. Unplugged wells can leak dangerous chemicals into the water and atmosphere, risking pollution and fires.
The documents show 17 wells where Perenco either requested a late decommissioning extension or lost it. In two of these cases, the deadline was missed by more than a decade. A Perenco well, north of the England field, was slated for closure in 2011 but was not yet fully decommissioned until July 2022.
Another, near the Indefatigable field, was due to be abandoned by 2009 but was not yet fully sealed and dismantled when the North Sea Transition Authority (NSTA), the government body that regulates well decommissioning, set a new deadline 11 years later. So far, it remains unfinished.
In a statement, Perenco said it had reached a new agreement with NSTA to abandon them by 2025.
Regulators at the NSTA called Perenco bosses to a meeting in Aberdeen in 2022 to ask why they had not shut down the old oil wells. One official wrote: “You agreed to get back to me with the steps Perenco has taken to prevent a recurrence,” asking why the company had not capped a well as promised.
Oil company Perenco is owned by the billionaire Perrodo family, which is ranked 17th on the Sunday Times Rich List. They receive hundreds of millions of pounds a year in dividends from their UK oil fields. Perenco UK Ltd paid them a total of £734m in dividends between early 2022 and June 2023.
Perenco’s failures to clean up old oilfields risk environmental disasters like the one in Poole Harbour, experts say.
David Santillo, a marine scientist at the University of Exeter, told Source Material: “Damage to the integrity of structures can range from a slow but continuous spread of oil residues or other toxic chemicals into the surrounding waters and sediments to a most catastrophic explosion. Containment and cleanup would be virtually impossible.”
Perenco is the largest owner of North Sea infrastructure in the UK, with 45 offshore platforms and nearly 1,500 miles of pipelines.
However, the company has been plagued by controversy over the decommissioning of old oil fields. In April this year, regulators fined it a record £225,000 for releasing 59 tonnes of gas into the atmosphere at a factory on the North Sea coast. The Health and Safety Executive’s database of fines and enforcement notices shows Perenco is responsible for 15% of North Sea breaches in the past five years, despite accounting for around 2% of production.
In 2022, there was a fire on one of Perenco’s oil rigs and the NSTA served it with an enforcement notice after failing to ensure that the decommissioning activities it was undergoing were free of hydrocarbons. Officials said: “This indicates that your procedures and measures were not adequate and sufficient to ensure hydrocarbon-free status and prevent hazards to persons at the installation.”
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Perenco has told NSTA that it is delaying the decommissioning of older wells to maximize production. In 2022, a decommissioning deadline was pushed back from July to September. But in August, Perenco said it needed to “maximise production now to support the UK economy” and had no equipment available to start decommissioning until “late 2024”.
Santillo said: “It is part of the covenant that the government and civil society have with the oil and gas industry that they will clean up and remove their materials when their profits are over. In the end, it’s about the industry doing the right thing.”
A Perenco spokesman said the company had spent more than £500m on decommissioning since 2009 and “its safety record in the North Sea has shown continuous and steady improvement.
“As a result, safety-related key performance indicators are all in the right direction,” he said.
Regarding the company’s requests for delays, he said Perenco had a “good and open dialogue” with the regulator and that shutdowns were sometimes rescheduled to promote efficiency.
He added: “On occasions, Perenco has not agreed with the regulator regarding the optimal scope and phases of operations, and the regulator has exercised its right to take action.”
He denied that Perenco had failed to dismantle the equipment in time to save money, adding: “Every year we spend hundreds of millions of pounds diligently managing the assets under our care. Our Perenco workforce works tirelessly, 365 days a year, 24/7, to maintain safe operations and responsibly manage the national vital resource, providing clean and reliable natural gas energy for the UK .
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