The North Sea’s biggest oil and gas infrastructure company is risking fires and environmental disasters, experts have warned, as documents reveal it is failing to plug its ageing oil wells in time and is missing decommissioning deadlines by up to a decade.
Last year, the fossil fuel firm Perenco faced controversy after an oil spill from its Poole Harbour operations polluted the Dorset site, which is internationally recognised for its ecological importance. The RSPB reported oiled birds in the water at the largest natural harbour in Europe, which is one of the most heavily protected areas in the UK. Perenco promised it would never happen again and committed to pay for the damage caused.
Documents released to the climate website Source Material after a freedom of information request reveal the Anglo-French oil group 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 plugging the ageing infrastructure will cost up to £8m for each.
Critics have raised concerns that the company has a financial incentive to delay cleaning up the assets that are at the end of their lives. Unplugged wells can leak dangerous chemicals into the water and atmosphere, risking pollution and fires.
The documents show 17 wells where Perenco has either requested a late extension to a decommissioning deadline or missed it. In two of these cases, the deadline was missed by more than a decade. One Perenco well, north of the Anglia field, was set for shutdown in 2011 but had still not been fully decommissioned by July 2022.
Another, near the Indefatigable field, was due to be abandoned by 2009 but was still not fully sealed and dismantled when the North Sea Transition Authority (NSTA), the government body that regulates decommissioning of wells, set a new deadline 11 years later. As of now, it remains unfinished.
In a statement, Perenco said it had reached a new agreement with the NSTA to abandon them by 2025.
Regulators at the NSTA called Perenco bosses into a meeting in Aberdeen in 2022 to ask why they had not been plugging the old oil wells. An official wrote: “You agreed to come back to me with the steps Perenco has taken to prevent recurrence,” asking why the company had not closed a well as promised.
The Perenco oil company is owned by the billionaire Perrodo family, who are ranked at No 17 on the Sunday Times rich list. They get hundreds of millions of pounds a year in dividends from their UK oilfields. Perenco UK Ltd paid them a total of £734m in dividends between the beginning of 2022 and June 2023.
The failures of Perenco to clean up ageing oilfields risk environmental disasters such as the one at Poole Harbour, experts have said.
David Santillo, a marine scientist at the University of Exeter, told Source Material: “Damage to the integrity of structures could range from a slow but persistent spread of oil residues or other toxic chemicals to surrounding waters and sediments up to a more catastrophic blowout. Containment and cleanup would be practically impossible.”
Perenco is the UK’s largest North Sea infrastructure owner, with 45 offshore platforms and nearly 1,500 miles of pipelines.
However, the company has been plagued with controversy over the decommissioning of its ageing oilfields. In April this year, regulators fined it a record £225,000 for discharging 59 tonnes of gas into the atmosphere at a plant on the North Sea coast. The Health and Safety Executive’s database of penalties and enforcement notices shows Perenco is responsible for 15% of North Sea breaches in the past five years, despite accounting for about 2% of production.
In 2022, there was a fire at one of Perenco’s oil rigs and the NSTA served it with an enforcement notice as it failed to ensure the undergoing decommissioning activities were free of hydrocarbon. Officials said: “This indicates that your procedures and arrangements were not suitable and sufficient to ensure hydrocarbon-free status and prevention of risks to persons on the installation.”
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Perenco has told the NSTA that it is delaying the decommissioning of old wells in order to maximise production. In 2022 a decommissioning deadline was postponed from July to September. But in August, Perenco said that it needed to “maximise production right now to support the UK economy” and did not have the available rigs to start decommissioning until “late 2024”.
Santillo said: “It is part of the covenant that government and civil society has with the oil and gas industry that they will clean up and remove their materials when they finish making their profits. In the end, it’s about the industry doing the right thing.”
A Perenco spokesperson 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 consequence, safety-related key performance indicators are all trending in the right direction,” he said.
On the company’s requests for delays, he said Perenco had a “good, open dialogue” with the regulator, and that decommissioning was sometimes rescheduled to promote efficiency.
He added: “On occasions, Perenco has disagreed with the regulator regarding the optimal scope and phasing of operations, and the regulator has exercised its right to enforce action.”
He denied Perenco was failing to decommission rigs on time to save money, adding: “Each year we spend hundreds of millions of pounds diligently stewarding the assets under our care. Our Perenco workforce work tirelessly, 365 days per year, 24/7, to maintain safe operations and manage responsibly the vital national resource, providing clean, reliable energy from natural gas for the UK.”
