Nobel Oil E&P North Sea Limited, R (on the application of) v The Oil and Gas Authority t/a The North Sea Transition Authority & Ors

Annex

1. The review of the facts which follows is principally based upon the documentary evidence in the main hearing bundle, on the basis that this is probably the best source for the narrative of events which follows. Where necessary it has drawn on the extensive witness evidence lodged by the parties.

2. On 15 March 2019 Total completed the UK Quad 9 Gryphon Area Production Life Extension Study. The study noted that the Gryphon FPSO was “in late life” and the high level conclusion of phase one of the study was that it would be possible to extend the life of the Gryphon FPSO to 2027 with the provision of investment in maintenance. It is recognised on all sides that the decommissioning of infrastructure such as the Gryphon FPSO is a complex project requiring significant lead-in times to ensure that appropriate provision is made for decommissioning and removal of the asset so as to avoid unnecessary expenditure and place contracts in a timely fashion.

3. On 27 September 2021 Mr Brotherton, a Business Development Manager for the Northern North Sea/West of Shetland for the defendant wrote to all of the owners in respect of the Q9GP project. The letter advised that the defendant had identified the delivery of the Q9GP project as strategically important and a priority. The letter records that at a meeting on 2 September 2021 attended by all of the owners and the defendant it had become apparent to the defendant that the owners were “struggling to secure unanimous JV alignment and agree a way forward”. The tenor of the letter was to encourage the Q9GP project participants to achieve agreement in respect of a work programme and budget for future phases of work. This was particularly because the letter noted that the oil assets “are now within the six years glide path to Cessation of Production”. The letter indicated that the oil resources could still be developed prior to a gas project coming online around 2027. However, the defendant made clear “that the gas resources are a priority and should not be detrimentally impacted by the potential oil opportunity (about 10-15mmbbls) in the area”.

4. In May 2022 there was email correspondence between the defendant and Total following a meeting reviewing an assessment of updated seismic and well data demonstrating a significant reduction in oil opportunities in the Q9 fields. The discussion related to the preparation of a dossier for CoP of the Gryphon FPSO and the length of any oil production prior to the commencement of the gas project. Internal correspondence shortly afterwards confirmed the defendant’s view that the Gryphon FPSO decommissioning was on their “glide path” by virtue of Total’s stewardship survey submissions having provided an expected cessation of production date as 2027.

5. On 28 September 2022 Mr Parra, a Strategy and Business Director for Total was in contact via email with Ms Brenda Wyllie, the defendant’s area manager for the oil fields relevant to this case within their Directorate of Operations, and a representative of Sojitz and others employed by Total. Mr Parra recorded a meeting with Ms Wyllie that day in relation to the disconnection of the Gryphon FPSO. Following this, Ms Wyllie wrote to her colleague at the defendant Mr Greenhowe, an Asset Stewardship Lead, recording that Total was looking to CoP and sail away mid-2024. Ms Wyllie went on to observe that she could not imagine “there would be remaining economic barrels here and the emission profile is not great”. As a consequence she was wishing to provide comfort to Total that this was aligned with the defendant’s approach. Mr Greenhowe confirmed that he and his team were in agreement with the approach she described.

6. On 5 October 2022 Ms Wyllie was in contact with Mr Hutchinson (Legal, Commercial and Business Service Director at TAQA) and Mr Parra following a meeting which had occurred on the previous day. She recorded that there was poor behaviour from those around the table and that she wished to bring those individuals together to discuss the breakdown in the joint venture associated with the Q9GP project. Ms Wyllie escalated her concerns to more senior individuals at TAQA and Apache who had not been present at the meeting when there had been the poor behaviour of which she was complaining. She was unable to undertake such an escalation with Nobel and Sojitz as she wished to have an in-person meeting and the managing directors of both of those companies did not live in the UK. It appears that at the subsequent meeting there was attendance from Mr Parra of Total, Mr Spriggs and Mr Sugiyama representing Sojitz dialling in from Japan. Total expressed their concerns about the integrity of the Gryphon FPSO along with its high emission profile such that Total were reluctant to invest in its repair. Total explained that they had attempted to sell the Gryphon FPSO in 2022 but that they did not consider any credible purchaser had been identified. Total left the meeting and Ms Wyllie had a discussion with the representative of Sojitz who confirmed that they were in agreement with Total that no credible buyer had been found for the Gryphon FPSO.

7. On 12 December 2022 Mr Wheeler, the defendant’s Director of Operations, wrote to all of the Q9GP participants expressing the defendant’s concern that, following on from the letter of 27 December 2021, the project in relation to the gas phase might not be progressing in accordance with timelines that had previously been presented, giving rise to potential risk to the delivery of what was described as a “strategically important native gas resource project”. The parties were encouraged in the letter to make progress and reminded of their regulatory obligations. On 18 January 2023 Mr Parra of Total emailed Ms Wyllie and Mr Brotherton to advise them that they had the approval of Sojitz to stop oil processing on the Gryphon FPSO in mid-2024. He indicated that they proposed to check their commercial agreements and undertake a technical study with Sojitz prior to notifying the users of the FPSO in March or April.

8. By this stage, the defendant’s approach to surveillance of their licensees had been changed. Prior to November 2022 as part of the CoP process licensees were required to submit a CoP Report which contained a wide variety of data including, for instance, an assessment of the volume of oil and gas production and whether the facilities and infrastructure had been properly maintained. The CoP Report was submitted by the field operator and also needed to include information as to whether the proposed CoP date had been communicated to the other parties who were being serviced by the facilities and infrastructure so that they would be aware of any knock-on impact on other fields that might be required to cease production. One of the purposes of the data in the CoP Report was to provide a context to explain why a date chosen for permanent CoP was appropriate. When the regulatory remit of the defendant expanded to include carbon and hydrogen transportation and storage as well as net zero, a review of the defendant’s workload was undertaken. It was noted that the data collected by the defendant under the UK Stewardship Survey (“the UKSS”) each year had become more detailed and could be contextualised via Stewardship Reviews. In the light of this, an internal review was undertaken to determine whether the CoP Report was still necessary and, as a consequence of the review, it was recommended that the CoP Report process be retired. The process was formally retired on 1 November 2022 and thereafter the defendant relied upon the other sources of information available to them in respect of the issues previously covered by the CoP Report.

9. On 15 February 2023 Ms Wyllie was in touch via email with Mr Parra with respect to a Total Board meeting which was due to take place. Mr Parra explained that the meeting had been postponed and that they had further time to undertake discussions with TAQA without the other partners being present apart from Sojitz with whom they had a collaborative and constructive arrangement. Mr Parra asked to have a catch-up with Ms Wyllie in relation to four topics: the gas project, the claimant, Apache and the oil. It appears a conversation occurred between Ms Wyllie and Mr Parra on 21 February 2023 which Ms Wyllie noted in her notebook. The notes provided as follows:

“Oil – looking at commercial terms and risks

Next week TAQA/Nobel to cease

Gryphon mid-2024

Q&A over the next month in confidence then release to workforce

Speaking to all as service provider

Study due end of March

Then issue termination notices

Sojitz fully aligned

Gas – working closely w/TAQA

Pre-FEED entered

Board now mid-March …

Nobel: funding in place till end Feb BW:NSTA involvement

Blocking progress in order to make them

Total will down man step aside”

10. On 2 March 2023 a meeting was held between all of the owners of oil fields served by the Gryphon FPSO. The representative of Total, Mr Steven Shaw, explained that the purpose of the meeting was, firstly, to provide an update to the fields tied back to the Gryphon FPSO on the plans for its decommissioning and, secondly, to provide the owners with the expectation of the timing for the cessation of services under the POSAs for each satellite field. Mr Shaw explained that there was a one-year time window for cessation of production and sail away of the FPSO between Q3 2024 and Q3 2025, and that studies were being undertaken to determine the precise timing. The note of the meeting describes Mr Shaw observing that the Gryphon FPSO’s owner’s decision was based on operational vulnerability and emissions, and the desire to anticipate and plan cessation of production and decommissioning rather than suffering an unplanned event resulting in that. Mr Nicholas Pogson, the Head of Commercial for the claimant, is recorded in the note to have elicited the following responses from Mr Shaw:

“• NP asked to what extent the Gryphon owners had given any thoughts to how to facilitate those parties who wish to continue to meet their MER obligations from the Gryphon area fields. SS responded that it is not the Gryphon owners obligation to facilitate MER in this circumstance.

• NP asked how the decision to cease production early is MER compliant and how this has been justified to the NSTA. SS responded that the decision to CoP was not driven by economics, advising that Gryphon economics is a matter for the Gryphon owners and that MER is not only about economics but also net zero.

• NP asked if TE’s senior management in Paris were aligned with a decision that would give up millions of dollars in value. SS responded that they are aligned with the decision.”

11. On 6 March 2023 Mr Parra wrote an email to Ms Wyllie advising her that they had verbally and confidentially informed TAQA, the claimant and Apache of the new window for decommissioning the Gryphon FPSO of mid-2024 to mid-2025. A further Q&A session was planned with them before the end of March.

12. On 8 March 2023 Mr Brotherton sent an email to Ms Wyllie and other of the defendant’s staff providing them with a briefing in relation to the Q9 risk workshop which had been held with Total and Sojitz about the progressing of the gas project. After the workshop the email records a private discussion with a representative of Total in which Total shared the information that they believed they would be able to cut a deal with Apache to take their interest in the Q9GP project. TAQA also seemed pragmatic and to understand the value of making progress. However, the notes record “Nobel remain a big issue” and they were “manipulating the unanimity clause to have their say”. Mr Brotherton recorded his feeling that the residual oil and the Gryphon CoP date was influencing Nobel. The note also recorded the defendant asking Total to “consider carrying unapproved equities (if small) to maintain momentum”. It was noted that Total were keen to understand the defendant’s powers to remove blockers in particular because of an upcoming budget approval deadline. Mr Brotherton’s note records that from the defendant’s perspective, project stall from lack of 100 per cent approval remained their biggest risk, but they would have 95 per cent of the owners wishing to progress. Mr Brotherton asked how the defendant could help with legal powers to clear the way. The note records a number of strands of messaging to the Q9GP joint venture partners to encourage them to make progress. In a personal note, Mr Brotherton observed that the claimant “need a talking to as there are other issues outside of Q9 affecting their judgment”. He concluded that whilst there may be a route for Apache to leave, “Nobel is the headache (0.88 per cent equity).”

13. Also on 8 March 2023 Mr Pogson circulated the notes of the meeting of 2 March which he had prepared. They were agreed on behalf of Apache and TAQA but Mr Parra on behalf of Total did not agree the minutes. Mr Pogson wrote on 9 March 2023 to Total requesting a suite of information prior to the next meeting in respect of the issues associated with CoP. He expressed his concern about the acceleration of CoP from the previously stated position that it would be at the end of 2027 and the impact which that would have on the owner’s MER obligations. He wrote a further letter on the same date to the defendant also requesting information in respect of the proposed CoP. In a further letter of the same date to OPRED Mr Pogson asked whether they had sought advice from the defendant pursuant to section 32(6) of the 1998 Act.

14. Mr Brotherton forwarded the correspondence that the defendant had received and the meeting note to his colleague Ms Sayer, a Senior Geoscientist with the defendant, and in response she calculated the loss of production for the Maclure and Ballindalloch fields which would result from CoP moving from the end of 2027 to mid-2024. She based the calculation on the November 2022 Stewardship Survey. Her calculations showed lost production for the Maclure field of around 1.5 mmbbls oil, 4 bcf gas, and for Ballindalloch around 1.1 mmbbls oil and 0.3 bcf gas. Mr Brotherton responded noting that these were “immaterial volumes, but not to Nobel as it is their own revenue stream”. His email continued:

“I believe Nick has now gone straight into Tom with a letter. I have not seen this although did discuss it with Mark Lammey on Friday. I tried to bring Mark up to speed on the whole area/situation, from knowing nothing. They continuously cite MER, MER, MER, but conveniently disregard the other half of the Central Obligation, Net Zero.

Nothing for us to do just now, but this has the potential for management to lean on us in the not-too-distant future. I am hopeful that we don’t get drawn into the noise and waste too much time on ~2.5mmbbls.

If we are needed, we can work together to sort out our response, although a lot may depend on the Gryphon COP chats Brenda had with TE and Sojitz. I am sure Brenda will have her house in order on this.”

15. On 16 March 2023 Total responded to Mr Pogson’s letter explaining that the information he had requested was the Gryphon FPSO owners’ information which they were not required to provide to Maclure and Ballindalloch. On 20 March 2023 Mr Pogson wrote again on behalf of the claimant seeking the information he had earlier requested on the basis it was required for there to be a meaningful Q&A session in relation to the earlier CoP. On 20 March 2023 Mr Parra wrote to the defendant on behalf of the Gryphon owners indicating that they anticipated ceasing production at the Gryphon field and sailing away the Gryphon FPSO in a window of Q3 2024 to Q3 2025. On the following day, Total reiterated to Mr Pogson that he was not entitled to the information which he had requested. On 21 March 2023 Mr Simon Grewcock wrote on behalf of TAQA to Total with a list of data requests for information to be supplied before or at the meeting which was to be held on 23 March 2023 as a follow up to the meeting on 2 March 2023.

16. A meeting was held on 23 March 2023 as noted following up from the meeting of 2 March 2023 with all of the owners of the various oil fields. During the course of the meeting, Total set out their response to the issues in relation to what had changed to bring the anticipated CoP forward, what engagement they had had with the defendant in relation to this, their views on the vulnerability of the FPSO and the impact on costs and budgets. There was also a discussion about how Total might facilitate the other owners continuing production given their intentions. Mr Pogson asked Total whether, if the other owners approached them to take over their interests for £1 so as to continue its operation, that would be considered and Mr Simon Hare on behalf of Total responded to say that he could not say they would not consider it but felt it was unlikely.

17. On the 27 March 2023 Ms Wyllie recalls that she had a telephone conversation with Mr Pogson to advise that the defendant had the claimant’s letter of 9 March 2023 and that her team were very busy at that time. She says that she asked Mr Pogson if there was anything else that the defendant could do to assist the claimant. She says that Mr Pogson indicated that there was not. The content of the conversation was reflected in an email of the same date that Ms Wyllie wrote to a colleague at the defendant in respect of a response to the claimant’s letter of 9March 2025.

18. On 28 March 2023 solicitors on behalf of the claimant wrote a cease and desist letter to Total and Sojitz in respect of the Ballindalloch and Maclure POSAs. In that letter, the solicitors observed that the defendant would not properly be able to approve the CoP bearing in mind the statutory obligation imposed by section 9A of the 1998 Act. On 6 April 2023 Total responded to the claimant’s solicitors resisting the claim and indicating that any proceedings for an injunction would be defended. On 12 April 2023 the claimant, TAQA and Apache wrote a joint letter to Total proposing that the claimant assume the role of commercial operator to represent the Maclure owners in all matters including but not limited to communication with the Gryphon operator and all regulatory authorities on the basis of a conflict of interest between Total and the Maclure owners related to the acceleration of CoP. This letter was followed up by a letter in similar terms from Mr Pogson to Total dated 17 April 2023. On 14 April 2023 Mr Hutchinson wrote on behalf of TAQA to the defendant explaining that they considered that the decision to accelerate CoP by the Gryphon FPSO owners would result in the loss of the opportunity to recover economically viable oil from the Maclure field in which they were interested, and requesting from the defendant a variety of information including an understanding of its attitude towards an earlier CoP.

19. It seems that on 17 April 2023 Mr Wheeler on behalf of the defendant wrote to the participants in the Q9GP project, again emphasising the importance of the delivery of this project and setting out the governing regulatory obligations on the parties. The letter set out a number of milestones which were required in order to bring the project to fruition. On 24 April 2023 the claimant’s solicitors followed up their cease and desist letter with a pre-action protocol letter in respect of the claim that there had been breaches of contract relating to the POSAs. Also on 27 April 2023 a meeting of the participants in the Q9GP project was held at which it was agreed that the previously approved Concept Select Decision Criteria should be sent to the defendant by 30 April 2023. On 25 April 2023 Mr Hutchinson wrote on behalf of TAQA and Nobel to explain that they were both aligned on the selection of a tie back to the existing infrastructure at the Beryl field for the gas project in preference to the alternative solution of a Central Processing Platform (“CPP”) for the field itself. On 15 May 2023 Total’s solicitors responded to the claimant’s pre-action protocol letter refuting the claim which had been presented to them. The claimant’s solicitors responded in a letter dated 22 May 2023.

20. On 23 May 2023, and in the light of the correspondence between the owners of the various oil fields, Mr Brotherton decided to provide his views to his colleague Mr Wheeler in the form of an email. The email provided as follows:

“Given all the shenanigans around the Quad 9 oil legal letters, I thought I would offer some of the team’s perspective on Gryphon and COP of the area.

I will aim to do this through some high-level data from the UKSS

Fields in scope:

Gryphon - TE - Op (86.5%) / Sojitz (13.5%)

Maclure - TE - Op (38.2%) / Taqa (37%) / Apache (17.2%) / Nobel (7.6%)

Ballindallich - TE - Op (91.8% / Nobel (8.2%)

COP was originally (UKSS 21) late 2027, now come forward to window (mid 24-mid 25). TE reasoning:

• Based on vessel integrity. NSTA do not have clear LoS to this wrt. issues, costs, viability.

• TE would rather plan for certain COP than have it imposed through integrity event.

• TE not happy with emissions story on Gryphon.

• Based on TE desire to concentrate on gas project, both resources and workload.

• Based on no further material opportunities in area.

Production

• Production delta between COP dates 2024 (new earliest) and 2027 (original) - ~3-3.5 MMbbls gross

• Nobel share of this is probably about - ~200kbbls net

• No gas associated with fields as no export line.

Emissions

• Gryphons runs at ~170-200 kT carbon per year

• CI ~ 57kg/boe and only getting worse as production declines

Hopefully, this gives you a feeling for why we have not got too involved here. It just isn’t material and the earlier COP actually solves an emissions problem. On an overall Strategy view, I would suggest the early COP benefits NZ more than MER lost.

Happy to have a chat around this if this would help. Just reach out.

I also feel the legal communications are between the relevant parties just now, and we do not have to get involved, but have our justification in hand, just in case.”

21. A little earlier on the same day there had been an exchange between the defendant’s Senior Development Geoscientist Ms Anne-Sophie Cyteval and Mr Brotherton in relation to the Q9GP. Their interaction on Teams was as follows:

“Anne-Sophie Cyteval (North Sea Transition Authority) <Anne-Sophie.Cyteval@nstauthority.co.uk> 5/23/2023 1:50PM

if easier for you yes. Geoff and I were discussing whether neglecting Nobel now could cause issue to the Q9 gas project.

Stewart Brotherton (North Sea Transition Authority) <Stewart.Brotherton@nstauthority.co.uk> 5/23/2023 2:30 PM

We decoupled Q9 oil and gas back in Sept 21 thorough a facilitation letter. Formally, they are not related. However, informally, Nobel losing its only revenue from 2025 onwards will likely prevent them investing in Q9 Gas, especially the more expensive version CPP. However, they are playing with the big boys, but may not be able to afford it in the same way as I don't go yachting in Cowes, as I can't afford it. If Nobel dropped out, I am sure the gas project would not stall for their 0.88%”

22. Earlier on 23 May 2023 Mr Brotherton had advised Mr Greenhowe in relation to the defendant’s view of the oil fields in Q9. He indicated that their initial viewpoint was confirmed by the UKSS data which indicated in data from 1 January 2023 that the volumes were less significant than he had thought, namely around 1 mmbbls per year generally for the Gryphon, Maclure and Ballindalloch fields. He pointed out that the Gryphon FPSO produces around 170-200 kilotonnes of co2 per annum and that the integrity issue was a consideration as it would “not need to be that expensive to be uneconomic”. The full text of this email, so far as relevant, was in the following terms:

“I have just pulled the UKSS 22 out for Q9 oil (Gryphon focussed), assuming Gryphon – Maclure – Ballindalloch

It confirms our initial viewpoint I believe.

This takes the data from 1/1/23 – COP (24/25/26/27)

The volumes are less significant than I thought, ~1MMbbls/year generally for the 3 fields

May also be worth noting that Gryphon FPSO produces ~170-200KT CO2 p.a.

Another consideration is the integrity issue, which would not need to be that expensive to be uneconomic.

One more thing. Ballindalloch future well not in UKSS, and pipe dreams in my view. Despite telling Q9 licensees to pull their fingers out in Sept 21 and develop these, nothing has happened. Therefore, we do no factor tenuous projects into our thinking, without a clear LoS and commitment.

Helpful to frame our position with Tom, which I shall do.

This confirms we are in the right place as this is NOT material and should probably not be ‘wasting our time’.”

23. Mr Greenhowe was also advised on the same day by Ms Cyteval who provided the following views:

“Geoff,

In a nutshell and trying to not duplicate what Stewart provided you with, more details below.

• Current COP window Q3 2024-Q3 2025

• Gryphon has been quite low on our priority list as the likely infill potential is quite low. Ballindalloch is the field where most oil in place remains but exhibits a very difficult reservoir to predict and the JV demonstrated jointly that there was no need for a second well. All the other fields have achieved 30% RF which seems standard. I can find the gryphon production loss if you want it.

• Total uses the integrity of the FPSO as an excuse, this is probably the less documented element so I can’t compare the remaining production versus cost of repair. It seems from the oil voice article copied below that the issues might be quite extensive (?)

• Emission wise, it is an old generation FPSO, sitting in the average of other infrastructure in the basin. Emission reductions would have been a challenge longer term”

24. On 24 May 2023 Total responded to the joint letter from the claimant, TAQA and Apache. They rejected the suggestion that they were no longer able to fulfil their role as the Maclure operator. On 24 May 2023 Ms Wyllie emailed Mr Greenhowe expressing her view that she did not consider that they should get involved in the dispute evidenced by the exchange of solicitors’ letters between the various parties as set out above. She expressed the opinion that the defendant should not get involved since it was a matter “that we have already decided has no value for us”. Mr Greenhowe amongst others agreed with this view. The solicitor’s correspondence continued with a letter from Total’s solicitors to the claimant’s solicitors on 24 May 2023 and a response from the claimant’s solicitors on 25 May 2023.

25. On 5 June 2023 Mr Wheeler wrote on behalf of the defendant to Mr Pogson explaining that information provided to the defendant by licensees concerning an asset was treated as confidential, and matters such as decommissioning plans or programmes were treated as commercially sensitive, and therefore the defendant was unable to respond to his questions. The letter concluded by observing that the defendant had been copied into letters and emails in relation to a dispute about CoP and the decommissioning of the Gryphon FPSO, and that it was not appropriate for the defendant to be copied into what was essentially a commercial dispute between the claimant and the other owners. The claimant’s solicitors responded to this letter on 9 June 2023 requesting an explanation as to why it had taken three months for the defendant to respond to the letter dated 9 March 2023 and further taking issue with the approach taken by the defendant that they were unable to respond to the request for information which had been raised by the claimant. They were also perplexed by the defendant declining to engage with the question about whether decommissioning of the Gryphon FPSO was consistent with MER. Further correspondence ensued, in particular between the claimant’s solicitors and the defendant in relation to the provision of information and the safeguarding of documentation.

26. On 21 June 2023 representatives of the defendant wrote to Total recognising that although not all the owners were in agreement, given the timescales of the estimated CoP, the defendant was keen to engage with Total so as to discuss their prospective plans. On 22 June 2023 Total wrote to the defendant in respect of the Q9GP project, in particular that the Beryl tie back concept was not at that time capable of being further developed as responses were awaited from the Beryl operator, and the recommendation that the CCP pre-project phase be approved had not achieved the required unanimity in order to make progress. A concept selection decision for the Q9GP would not be forthcoming prior to the end of June 2023 as had been hoped. That in turn would delay the concept selection report.

27. On 5 July 2023 Mr Cacela, Mr Thomas and Mr Wilson, all members of the defendant’s Decommissioning team, met with Mr Watt of Total to discuss the Gryphon FPSO’s decommissioning. A timeline was subsequently produced identifying the defendant’s requirements for CoP and noting any evidence of those requirements being met. In particular, it was noted that the process under section 29 of the 1998 Act had started as a consequence of the meeting. On 6 July Mr Watt of Total wrote to Ms Muirhead at OPRED explaining that Gryphon CoP had been entered in the Stewardship Survey as 2024, reflecting the Gryphon FPSO’s owner’s view of the earliest CoP at the time of the survey, albeit that at the time of this email in July 2023 the earliest sail away was noted by Mr Watt to be summer 2025. He advised that the decommissioning planning was on foot and that Mr Cacela and colleagues at the defendant had been updated in relation to this. Mr Watt also noted that Total, as Gryphon operator, was in discussion with the Maclure and Ballindalloch owners on the impact of cessation on the FPSO’s services. As such, Mr Watt could not definitively respond to the query raised by Ms Muirhead as to whether or not the Ballindalloch and Maclure oil fields were to be decommissioned at the time of the Gryphon CoP.

28. On 11 July 2023 the defendant responded to the claimant’s solicitors letter of 9 June 2023. It was explained that the delay in dealing with the letter of 9 March 2023 resulted from the Easter break and reflected a busy period for the defendant’s relevant team, including restructuring and settling in new team members. On behalf of the defendant it was confirmed that the defendant had not undertaken its statutory functions under sections 29 and 32 of the 1998 Act and, if called upon to do so, the defendant would provide appropriate support to OPRED acting in accordance with public law principles including fairness and procedural rigour. The defendant observed that it appeared that the claimant was conflating general day to day discussions in relation to the defendant’s regulatory functions with respect to matters such as CoP with formal processes under section 29 of the 1998 Act in relation to decommissioning.

29. On 14 July 2023 Total wrote a termination notice as the Gryphon operator in relation to the Maclure field under clause 6.1 of the POSA providing 12 months’ notice, or such later date as provided for by that clause, of the termination of the provision of services under the POSA. A similar termination notice was also served in relation to the Ballindalloch field, again on 14 July 2023. On 20 July 2023 Ms Wyllie emailed Mr Cygan-Taylor, a programme assistant with the defendant, setting him a number of tasks. One of them related to the fields that tied back to the Gryphon FPSO. Ms Wyllie asked him to compile a list of fields that tied back to the Gryphon FPSO and to list all the licences for each field since she indicated that the defendant “may use the CoP date in 2024 to drive a discussion on “hand back the licence or provide us with a development plan for the gas””.

30. On 26 July 2023 Mr Cygan-Taylor forwarded to Ms Wyllie the research that he had undertaken and she in turn forwarded it to Mr Brotherton. In response, Mr Brotherton asked Ms Wyllie whether she was happy for him to explore with the defendant’s licensing team, and thereafter the legal team, their options to revoke at CoP. Ms Wyllie responded that the defendant could not revoke the licences, but that they could be surrendered, and she was content for him to liaise with the licensing team. Mr Brotherton expressed his concern that this was a weaker position than the defendant had originally thought, since revoking was more powerful than requesting a surrender of the licence. He pointed out that the defendant “continually ask them to do things, but invariably they do not”. Ms Wyllie responded by explaining that whilst the defendant has never had the right to revoke the licence at CoP, what could be done is to set out an expectation that the licence would not be required in the decommissioning phase and as such should be surrendered. If it was not going to be surrendered, then the licensee should be required to show their development plans and in any event most licences state that a year without production would determine the licence. Ms Wyllie pointed out that this arrangement set a timeframe for redevelopment of one year post CoP. Mr Brotherton was reassured by this.

31. On 27 July 2023 Mr Brotherton sought advice from a licence specialist colleague in relation to the scope to use the licences to “apply a little pressure and increase momentum” in relation to the Q9GP project. It appears that Mr Brotherton was envisaging that the project was facing a critical moment in the autumn when the question of whether or not the gas project could be tied back to the Beryl infrastructure would be confirmed. If that was not a possibility, he was contemplating writing to the licensees explaining that they did not need the licence for decommissioning and should show the defendant their development plans if they intended to keep the licence, with the veiled threat that if there was no development plan, there would be no licence and thus nothing for them to sell. The advice which he received was that the test for determining the licence would either be twelve months of no production or twelve months of production below the PCON level. Mr Brotherton expressed his thanks for this advice and further explained that it was intended to use the licence deadlines or triggers to force the issue so as to progress and deliver the project. It was intended to write to the licensees in September.

32. On 8 August 2023 representatives of Total met officials from OPRED to conduct a briefing meeting in relation to the decommissioning of the Gryphon FPSO. A pre-consultation draft of the decommissioning programme dated 8 August 2023 was prepared. It set out details of the infrastructure concerned and the various processes which were required to be gone through in order to decommission by way of the removal and recycling of the Gryphon FPSO. A range of issues were covered within the decommissioning programme including the practicalities which would be required, along with the environmental considerations which were also engaged. OPRED prepared a schedule of their comments on this first draft of the decommissioning programme which included the opportunity for the operator to respond to the observations which they had noted.

33. On 11 August 2023 Mr Brotherton wrote to Ms Wyllie in relation to the draft letter which was being prepared with respect to the licence advice which he had received. He explained that the purpose of the draft was to be “friendly and helpful yet delivering a message around significant risk”. The message was intended to encourage work on the preparation of a CPP for the Q9GP project. The drafting of the letter to licensees continued through August, and on 17 August 2023, in an exchange of messages between Ms Wyllie and Mr Brotherton, Mr Brotherton agreed that he should hold off sending the letter at that time. Ms Wyllie had pointed out that, as Mr Brotherton would be aware, the claimant was under a duty under the 1998 Act to act in accordance with the MER strategy with respect to the Maclure and Ballindalloch fields, and if “the Gryphon proposed steps are taken according to the timeline now being produced by Total and Sojitz, Nobel would be placed (through no fault of its own) in breach of that statutory duty”.

34. On 21 August 2023 the defendant wrote to Mr Hutchinson of TAQA in response to his letter dated 14 April 2023 raising certain questions relating to Total’s proposal for Gryphon FPSO CoP. The letter confirmed that no statutory functions in respect of a decommissioning proposal had been exercised by the defendant and went on to record that the CoP report was no longer required and discussions with operators in respect of matters of that kind were treated as commercially confidential. This meant that information provided was not available upon general request.

35. On 23 August 2023 the claimant’s solicitors responded to the defendant’s earlier correspondence noting that the claimant understood that a formal consultation was now underway in respect of the Gryphon FPSO, and this was a change of circumstance from the defendant’s email to the claimant’s solicitors of 11 July 2023. The claimant’s solicitors therefore reiterated the request for information in relation to the consultation exercise that had been previously raised. On the same date Mr Pogson wrote to OPRED seeking confirmation as to whether OPRED had sought advice from the defendant under section 32(6) of the 1998 Act. On 29 August 2023 representatives of the claimant, TAQA and Apache wrote to Total setting out their view that no detailed justification or supporting documentation had been provided to allow an understanding of the rationale for the Gryphon FPSO CoP and seeking a “senior level face-to-face meeting” to explore potential solutions.

36. On 4 September 2023 Ms Yates of OPRED contacted Mr Knight, the defendant’s Business Development Manager for West of Shetland and Northern North Sea, seeking to identify the appropriate person within the defendant’s organisation to be contacted in respect of the draft decommissioning plan for the Gryphon FPSO which they were expecting, so as to have a conversation about the implications of the FPSO sail away in mid-2025 on the associated tied back fields. Mr Knight passed Ms Yates to Mr Greenhowe who in turn contacted Ms Wyllie to ask how the request should be handled in the light of the continuing litigious correspondence taking place between the owners’ solicitors. Ms Wyllie indicated that this was a matter for the defendant’s decommissioning team as they would be the statutory consultee on the decommissioning plan, and that it would be wrong for her team to engage with OPRED on the issues. Mr Alastair Bisset, the defendant’s Head of Decommissioning, suggested that he have a joint meeting with Ms Wyllie to obtain the perspective of the Operational Directorate or Ops team on the issues. On 5 September 2023 Mr Watt of Total sent a draft commissioning programme to Ms Yates at OPRED for their review.

37. On 8 September 2023 the defendant’s company secretary responded to the claimant’s solicitors letter of 23 August 2023 by confirming that the defendant had yet to receive any decommissioning programme from OPRED for it to consider. It was further reconfirmed that in principle licensees were at liberty to and did discuss with the defendant any CoP proposals as part of their general day to day engagement with the defendant, and that any such discussions were treated by the defendant as being commercially confidential. Around this time, OPRED responded to Mr Pogson’s letter of 23 August 2023 advising that OPRED had had some early discussions with Total on the proposed decommissioning of the Gryphon field and sail away of the Gryphon FPSO, and that OPRED had also initiated earlier discussions with the defendant to understand what engagement they had had with Total up to that point in time. It was noted that a formal consultation under section 32 of the 1998 Act would be conducted at the consultation stage of that process. The letter noted that as part of the decommissioning process “we would expect the field operator to be engaging with all other section 29 holders on the proposals being presented to OPRED in the decommissioning programme and any final draft must be accompanied by letters of support from all parties before approval is given on behalf of the Secretary of State”.

38. On 14 September 2023 all parties to the Q9GP project received a letter from Ms Leanne Oxley, the defendant’s Head of Disputes and Sanctions (“D&S”). The letter confirmed that her department had received a referral from the defendant’s Operations Directorate which they were investigating. In the meantime, the letter pointed out the defendant’s expectation was that all parties would continue to cooperate with the defendant in seeking to implement resolutions for the ongoing Q9GP project. On 15 September 2023 Mr Brotherton wrote a lengthy email in relation to the issues concerning the Gryphon field to Ms Wyllie and Mr Knight. Its purpose was to brief them for a meeting with Mr Wheeler on 18 September 2023. Mr Wheeler’s evidence suggests that whilst there were regular meetings with the Area Teams at which he was briefed on issues of this type he has no record of a meeting on 18 September 2023 in his calendar and he cannot recollect any such meeting. On 22 September 2023 Total responded to the joint letter from the claimant, TAQA and Apache dated 29 August 2023. This noted that the decision to CoP the Gryphon field and its facilities was entirely a matter for the Gryphon FPSO owners alongside relevant engagement with the defendant and OPRED as appropriate. The letter noted that the rationale for the decision had been clear throughout, namely integrity, emissions, economics and the need for a planned and orderly decommissioning of the infrastructure. In the light of the threats of legal action, Total did not consider a meeting appropriate.

39. On 26 September 2023 a telephone call occurred between the claimant’s solicitor and the defendant’s company secretary. The purpose of the call was to enable the claimant’s solicitor “to convey a sense of where her clients are and how they see the NSTA”. The claimant’s solicitor explained that the claimant felt that the defendant was not being transparent and that the tone of the correspondence between the defendant and the claimant was different from that which the claimant had with OPRED. The claimant’s solicitor inquired whether it was correct, as the defendant had been told by Total, that the defendant supported Total’s plans and she also queried the claim that discussions with licensees such as Total were commercially confidential. The defendant’s company solicitor thanked her for setting out the claimant’s feelings and asked whether the claimant had considered using the defendant’s mediation service. The claimant’s solicitor said that this was not a matter between private parties but between the defendant and the claimant, to which the defendant’s company secretary responded that it was in fact a matter between two commercial parties, namely the claimant and Total.

40. It appears that around this time there were discussions between Ms Innes (the defendant’s Director of Supply Chain and Decommissioning) and Mr Bisset in which it was recognised that the assessment of decommissioning should be led by Ms Innes’ team and that it should be acknowledged that engagement had begun under section 29(2B) of the 1998 Act. There was also a discussion in respect of the revision of the defendant’s arrangements for considering advice under section 29(2B) of the 1998 Act.

41. On 5 October 2023 the claimant’s solicitor followed up the conversation which she had had with the defendant’s company secretary by asking him to explain the process the defendant would follow in considering and advising on alternatives to decommissioning and how it was proposed to take account of the claimant’s views and assess the impact of any proposal on MER. On 10 October 2023 Total wrote to the defendant’s D&S team in response to the letter from Ms Oxley of 14 September 2023. In the letter they set out the steps that they had taken in relation to the milestones required of the Q9GP project and the efforts that they had made to keep the project progressing towards the earliest delivery of first gas. On 17 October 2023 the defendant’s Mr Wheeler met with Mr Payer, the Managing Director and UK Country Chair at Total and he recorded the discussions in an email to Ms Wyllie on the same day. The email records the following, amongst other matters:

“NP explained the latest on Maclure/Gryphon issues with Nobel. They now intend to sail the FPSO away at the end of 2024, citing operational and NZ considerations. I said that we did not consider this issue to be an NSTA priority (bearing in mind the low value associated with minimal volumes, significant associated emissions and overall confidence in the decision-making of the operator) and had asked Nobel (and others) to not include us in commercial negotiations.”

42. The note of a meeting between the defendant and OPRED on 25 October 2023 records Ms Wyllie as indicating that the defendant did not have any objection to the sail away of the Gryphon FPSO but noting that the claimant had made clear their objection to the field ceasing production. Following the Gryphon FPSO sail away, production licences could be revoked by the defendant as they would then have no production. On 1 November 2023 Mr Cacela, a decommissioning engineer with the defendant, wrote to Mr Watt at Total on the instructions of Ms Innes to advise him as follows:

“I refer to the obligations on TOTALENERGIES E&P NORTH SEA UK LIMITED (‘TEPUK’) under the Act and the OGA Strategy relating to the decommissioning (abandonment) of the offshore installation and pipelines associated with the Gryphon, Tullich, Maclure & Ballindalloch field.

I note that the Gryphon, Tullich, Maclure & Ballindalloch fields are on the decommissioning glidepath as set out in Stewardship Expectation 10: Cost Effective Decommissioning and based on the projected CoP date you provided to us in the most recent Stewardship Survey (UKSS) data, I am writing to inform you that the NSTA considers it is now engaging with TEPUK in connection with the NSTA’s obligations under s29 (2B) of the Act.”

43. The defendant’s company secretary wrote to the claimant’s solicitors on 3 November 2023 advising them that the defendant was now engaging with Total in connection with the obligations on the defendants under section 29(2B) of the 1998 Act. On 7 November 2023 OPRED wrote to Total giving them and Sojitz notice that OPRED were considering giving Total a notice under section 29 requiring them to prepare an abandonment plan in respect of pipelines and associated apparatus in the Gryphon field, including specifying the Gryphon FPSO in a schedule attached to the letter.

44. On 9 November 2023 the claimant’s solicitors wrote to the defendant’s company secretary in response to his correspondence, complaining of delay in dealing with the earlier correspondence from the claimant’s solicitors and the failure to answer the question posed by the claimant’s solicitors on 5 October 2023 concerning the process that the defendant would follow in considering and advising on alternatives to decommissioning and how the defendant’s views and the impact on MER would be considered. The claimant’s solicitor noted that there was an absence of any reference to MER in the defendant’s company secretary’s response. The claimant’s solicitor went on to draw attention to the Tameside duty and observed that in the light of the differences between the affected owners it was incumbent upon the defendant to properly inform itself “on the whole evidence on the economic viability of the Gryphon FPSO”. The claimant’s solicitors further criticised the reference to the claimant as a “third party” on the basis that the closure of the Gryphon FPSO made them an affected party and ignored the impact on the claimant’s economic interests which might constitute possessions for the purposes of Article 1 Protocol 1 of the ECHR. The claimant’s solicitors went on to request confirmation that the defendant would not provide advice to Total pursuant to section 29(2B) prior to responding to their letter and seeking and having regard to representations from the claimant, TAQA and Apache. This letter was forwarded on by the defendant’s company secretary to others, including Mr Bisset, who responded by observing that he considered that through stewardship, repurposing or reuse discussions the defendant had taken suitable steps. He went on to observe as follows in relation to the points raised in the claimant’s solicitor’s letter:

“However, one of Nobel’s challenges appears to centre on why we’ve just spoken to/with the operator of the installation as opposed to extending our comms/engagement to the whole JV group. I don’t know the history or background to that, or where its formalised in NSTA guidance or policy, but purely from a practicality point of view I can imagine that if we were to consult with every JV partner about every stage of a process and every piece of information required, it would very quickly become very inefficient, and we’d be placing a huge burden on industry (operators) to engage with us and deliver that expectation. As such, I would think that it is appropriate for many discussions (particularly those through Stewardship) to be directed to the operator of an asset/field, with the more formal or official correspondence to then include any JV partners. Something we can discuss anyway, but just my thoughts.”

45. On 9 November 2023 Mr Brotherton wrote an email to Mr Alaedin Sadeghi, the defendant’s Commercial Transactions Manager, in the light of correspondence pertaining to a meeting between Mr Sadeghi and Mr Pogson on behalf of the claimant. Mr Brotherton provided his views in relation to the utility of the proposed meeting in the following terms:

“I’m not really sure I’m inclined to meet Nick and hear his view of the world. TE have taken the offer from Beryl, run their economics, and decided it just does not fly for them and any additional commercial discussions in the remainder of the year will not move the needle enough for them. This is exactly what Nobel and others did with the CPP option earlier this year. Therefore, given the unanimity of the vote, Beryl is finished.

Whether they finish Beryl now or at end of year, does not matter. The decision is made as TE can never back the Beryl option. I am not sure what Nobel and others are hoping for, they have never told us despite our asking, or offered any alternative, constructive proposals. Their approach has always been one of crossing their fingers and hoping for the best.

I will leave you to decide if meeting Nick (0.88%) will help the NSTA move this project forward. My view is this meeting may not be the best use of our time. I also feel we are supposed to jump when it suits them, when they have been fairly obstructive in this project over the past 12-18 months.

There may also be an element of the NSTA keeping some distance whilst the legal challenges (Gryphon COP) rumble. I suspect Nick may bring it up as life is not looking too rosy for Nobel in the future, however, I can't help but feeling they must take some responsibility for this.”

46. On 16 November 2023 Mr Pogson wrote on behalf of the claimant to OPRED requesting confirmation of whether or not Total had submitted a draft decommissioning programme in respect of the Gryphon FPSO to them. He also sought to understand whether or not OPRED were now consulting with the defendant in respect of section 32 of the 1998 Act. On 20 November Ms Cyteval was in contact with Ms Wyllie in relation to communications with a colleague. In response, Ms Wyllie observed as follows:

“If you could ask him when Gryphon is leaving and whether he intends to notify you of that date. There is no COP process but it would be good for them to jot down in an email the date and rationale for leaving, just so our paperwork is all in place. Light and frothy, no big issues, no issues with FPSO leaving, just struggling to see where we have that in writting.”

47. On 30 November 2023 Mr Pogson wrote to Mr Wheeler noting that the defendant’s company secretary had advised that the defendant was now engaging with Total in connection with the obligation under section 29(2B) of the 1998 Act. In the letter, he set out information which the claimant considered the defendant should have regard to when discharging its obligation to assure MER was being delivered with respect to the Gryphon, Tullich, Maclure and Ballindalloch fields which were all tied back to the Gryphon FPSO. Mr Pogson set out that Total had consistently concluded previously that economic cessation of production at the Gryphon FPSO would be no earlier than the end of 2027. He noted that to date Total had not provided any economic analysis in support of their decision to accelerate CoP and that in the absence of that analysis the claimant had undertaken its own re-examination of forecasts of production, capex and opex from the available information. He advised that the claimant’s modelling concluded that the Gryphon FPSO and the fields it served generated healthy economic returns until at least 2027, in which year the before tax cashflow would be $52 million. The letter also alluded to a 2024 budget forecast which also demonstrated a substantial cash flow. Mr Pogson noted the significant potential for gas production once the oil production phase was complete but offered the possibility of a transfer of interests to complete the oil production which would not then preclude the transfer back of those interests to Total and Sojitz to enable them to participate in the gas development. Alternatively, Mr Pogson suggested that if the gas project proved to be economically unattractive, the Gryphon FPSO could be recertified for a further five years to 2032 to facilitate increasing levels of gas production as the remaining oil production declined. He closed the letter by inviting further discussion in relation to his evaluation and seeking agreement for the necessary steps to ensure that economic oil production could be maximised from the Gryphon FPSO prior to the development of the gas project.

48. In November 2023 UKCS Stewardship Surveys for activity and decommissioning in each of the four fields were provided to the defendant. They all identified that the likely CoP date for each of the fields was December 2024. During the course of November 2023, there was a good deal of internal discussion at the defendant in relation to the appropriate processes for dealing with the implementation of section 29 of the 1998 Act. On 1 December 2023 Ms Innes, the defendant’s Director of Supply Chain and Decommissioning, observed to Ms Hewson at OPRED that they had been operating informal processes previously which had worked well, but she thought it could be worthwhile to review or map those processes so as to ensure that they were agreed and aligned on how the 1998 Act was to be implemented. On 6 December 2023 Ms Innes wrote to Ms Wyllie in relation to a letter which was being drafted by her to respond to Mr Pogson’s letter about the Gryphon hub. Ms Innes was seeking Ms Wyllie’s assistance in the following terms:

“Hi Brenda

Without wishing to burden you or ask you to undertake additional work, I’m responding to a letter that Nobel sent (addressed to Tom) on the Gryphon Hub. As we are formally engaging with Total on future of the infrastructure associated with the Gryphon field decom is leading the response (see attached draft).

The letter from Nobel provides material they believe is relevant to the decision to cease production, and its been shared with us to ensure we’re sighted in case it’s relevant to our regulatory responsibilities in relation to MER UK. You’ll see from my draft response that I’ve given a high level line on how we use asset stewardship over the life of the field to deliver MER, but made no comment on NSTA specific views on this field/hub.

So, I wanted to share the letter with you:

1. To ensure you were sighted on the material Nobel has supplied in case it is of relevance/interest to you

2. Offer the opportunity to provide additional information in the letter to explain the work we do or have done in this instance to satisfy our MER obligation.”

49. Also on 6 December Ms Innes wrote to Mr Bisset with a number of queries in relation to the Gryphon field but in particular raising the need to ensure that Mr Bisset asked Total about the engagement that they had had with the claimant on the potential re-use of the infrastructure in the light of the claimant’s solicitor’s letter indicating that the claimant was keen to see the infrastructure retained for ongoing oil and gas production. Ms Innes sought clarification in relation to the mechanism for this and whether the claimant had sought to buy the infrastructure or requested Total to consider continuing with its current licence without ceasing production. She asked that Total’s position in relation to this enquiry should be recorded in writing to demonstrate the engagement which Total had had with the Gryphon FPSO licensees on alternatives to decommissioning. On 7 December 2023 Mr Bisset took up the question of reuse or repurposing of the Gryphon FPSO and its infrastructure by asking Ms Wyllie whether there were any views or opinions from her team in relation to that issue. Ms Wyllie responded that her team did not usually look at infrastructure with regard to potential reuse or repurposing and she went on to note that the fields serviced by the Gryphon FPSO were currently seeking to choose a concept for the gas phase of production. She noted that the Q9GP group, which involved fields other than those serviced by the Gryphon FPSO, had jointly agreed that the Gryphon FPSO did not offer a solution for the gas project. In parallel with this, Mr Bisset raised inquiries of Mr Cacela along similar lines, requesting that Mr Cacela contact Total and seek to confirm the position that they had articulated to Mr Cacela earlier in the autumn of 2023.

50. Alongside this, on 7 December 2023 Mr Fozdar, the defendant’s Infrastructure Repurposing Manager UK, responded to the inquiry from Mr Cacela by forwarding to him the completed repurposing template which Total had previously provided for the Gryphon area. Also around this time on 5 December 2023 Mr Brotherton had written to Mr Hollis about a draft letter respecting the Q9 field, having been consulted by Mr Hollis about it. Mr Brotherton responded to Mr Hollis in the following terms:

“Brenda and I were chatting recently about the potential mechanisms that could lead to various parties being removed from the licences.

Up until now, the JV have been fairly aligned in seeking a solution with Beryl. However, that option has now been dropped (early Nov).

The CPP option remains, but only supported by limited parties, with others until now, hesitant to step aside or amend the PDA to allow others to sole risk and advance. This is despite the NSTA continually recommended the JV instigate these PDA amendments to cope with such an eventuality.

The NSTA now needs to think both historically, but also look ahead to how we may be able to utilise The Strategy (26-30) to help free up investors. Brenda suggested that, whilst this may take a while, the potential investigation and lack of compliance with the Strategy could be helpful in pushing for this outcome.

I suspect Brenda can articulate this better, however, this D&S process seems a good opportunity to apply the right pressure to allow investors to invest, and either help non-investors see the light and get out, or ultimately be forced out.

Maybe we should have a quick chat to ensure we are all aligned, and the information being provided to Q9 aligns with this aim. Alternatively, if I have the wrong end of the stick, let’s ensured we are all aligned as certain parties of the JV are already starting to look to us to help them send their money.”

51. On 15 December 2023 Ms Wyllie responded to Ms Innes’ inquiry of 6 December 2023 requesting a follow-up in relation to her proposed draft. Ms Wyllie acknowledged she had probably missed the opportunity to contribute to the letter and observed that her only suggestion “would have been to ensure we capture both central obligations and not just MER”.

52. In fact, on 8 December 2023 Ms Innes had sent the response to Mr Pogson to the letter which he had sent on 30 November 2023. In the letter she explained that the defendant uses asset stewardship throughout the life of a field to optimise efficiency and ensure economic recovery so as to enable the principal object of MER. She also explained that when assets reached a late life stage, stewardship engagement included decommissioning as set out in the Strategy. The letter continued:

“The Gryphon field is considered late-life and the NSTA is stewarding that field in accordance with SE 10. This includes consideration of re-use or repurposing options as well as cost-effective decommissioning.

Continued use of infrastructure and repurposing or re-using redundant offshore oil and gas infrastructure either in-situ or by removal to shore for onwards use, can provide value to industry and the UK. If infrastructure is identified as having a reasonable re-use or repurposing potential, then we would generally want to see it preserved for future use rather than being decommissioned.

We have developed a screening tool to support decision making to determine the suitability and feasibility of re-use or repurposing opportunities, and this is being used as the basis for engagement with TotalEnergies in relation to the Gryphon field and FPSO.

We note your interest in retaining the Gryphon infrastructure for ongoing use, as an alternative to decommissioning, and will include this in our engagement with TotalEnergies.”

53. On the same date Ms Innes responded to the claimant’s solicitors setting out in detail the relevant legislative framework and the defendant’s processes in respect of asset stewardship and decommissioning. The letter to the claimant’s solicitors concluded by noting that the claimant would be aware that the defendant had started formal engagement with Total in relation to the Gryphon field under section 29(2A) of the 1998 Act and were working with them to review options including re-use and repurposing opportunities as well as considering decommissioning some or all of the infrastructure. Ms Innes indicated that the defendant had noted the claimant’s interest in the continued use of the Gryphon infrastructure and that this would be considered as part of the review process.

54. Mr Cacela contacted Mr Watt at Total on 7 December 2023 asking him to review the Gryphon area repurposing template which had been completed by them in 2022 so as to confirm that it reflected Total’s current position. He also asked Mr Watt to confirm that Total had engaged with the other Gryphon licensees in completing the template. In response on 12 December 2023 Mr Watt explained that at the time the template had been completed, Total had understood that this was a trial of the template and, given the high-level approach and the fact that it was a trial, Total had not shared it with the Gryphon partner or the owners of the user fields at that time in anticipation that there would be some further iteration of the exercise. Mr Watt proposed that as they were now preparing for Gryphon FPSO decommissioning, he would commence a file on the Gryphon field in conjunction with Total’s Gryphon partner, Sojitz. He proposed that he also prepare individual files for each of the Tullich, Maclure and Ballindalloch fields which would be prepared with their respective joint venture partners in those fields. He asked Mr Cacela to confirm that that approach would be satisfactory to the defendant and further confirmed that the Gryphon operator had been engaging with the owners of the user fields in the joint venture in respect of the Gryphon FPSO CoP and sail away plans throughout 2023. Mr Cacela asked for Mr Bisset’s response to this approach and Mr Bisset accepted that if Total were right to take the template as a trial, Mr Watt’s response made sense. Mr Bisset further offered his view that since the CoP date had come forward, a re-engagement with Total on the repurposing template would be sensible, led by the decommissioning team in the first instance.

55. In a subsequent email on 13 December 2023 Mr Alasdair Thomas, the Decommissioning Manager of the defendant, agreed that the decommissioning team should be the initial focal point for this activity and the investigation of re-use or repurposing opportunities. Subsequently, Mr Fozdar and Mr Bisset exchanged emails, noting that there was now agreement and that it was appropriate for Total to progress in the way that they had suggested. On 14 December 2023 the claimant’s solicitors wrote to Ms Innes in response to her letter of 8 December 2023 contending that it remained unclear whether and how the defendant intended to ensure that MER would be complied with in relation to the unrecovered resources in the fields served by the Gryphon FPSO. Further, the claimant’s solicitors observed that paragraph 26 of the Strategy would be in play as a consequence of Total’s decision to submit a draft decommissioning programme which did not ensure the recovery of the maximum value of economically recoverable petroleum from their licences and as a consequence, the Strategy required that others be allowed to seek to maximise that value. The claimant’s solicitors sought details of any discussions or engagement by the defendant in respect of the preservation, reuse or repurposing of the Gryphon FPSO. Also on 14 December 2023 Mr Pogson wrote on behalf of the claimant to OPRED pointing out that he had not had a reply to his letter of 15 November 2023 and was keen to understand the current position in relation to the draft decommissioning programme and made plain the claimant’s position, which he said was shared by TAQA and Apache, was that the proposed decommissioning was not compatible with the principal objective of MER. He sought further information as to how OPRED would satisfy itself that the defendant’s advice would properly reflect the defendant’s statutory obligations in that connection.

56. On 15 December 2023 Ms Oxley wrote to Mr Parra about the investigation which had been referred to her with respect to the Q9 Gas Project. Ms Oxley sought further information for her to review before a decision was made as to whether or not to proceed with a substantive investigation. It appears a similar letter was sent to the claimant via Ms Oxley. On 19 December 2023 OPRED wrote to the claimant in respect of the submarine pipelines in the Maclure fields. This was a variation of the notice already held by the claimant under section 29(1) of the 1998 Act dated 5 December 2016. Also on 19 December 2023 Total were sent a similar notification of variation of an existing notice in respect of the Gryphon field. On 21 December 2023 Ms Innes replied to the claimant’s solicitor in relation to the letter which she had received to explain that she could not give a definitive timeline to fulfil the requirements set out in the 1998 Act other than that the defendant would proceed in a timely manner. She noted that the claimant had contacted the defendant under separate cover to express interest in securing continued use of the Gryphon infrastructure and reconfirmed that the defendant would take the claimant’s interest into consideration in their assessment including engaging with Total in that respect. Ms Innes observed that as “we work through this process we may revert to Nobel, and will advise them of the conclusion of our assessment as appropriate”, and that in the meantime the claimant should continue to engage with Total.

57. It seems that in January 2024 the defendant undertook a corporate governance review in respect of the claimant arising out of a request from Ms Wyllie as a result of her concern that the defendant was getting “zero engagement” with the claimant’s Chief Executive Mr Larry Bates, and they wished to discuss the Maclure and Ballindalloch licences as part of the Q9GP proposals. The background to the request notes that the claimant forms one of the five participants to Quad 9 covered by a pre-development agreement which had stalled many times: “Nobel, amongst others, have repeatedly blocked the Q9GP from moving forward.” The corporate governance review set out concerns for the defendant in relation to the claimant and a range of information in respect of the governance arrangements of the claimant.

58. On 5 January 2024 Ms Samantha Hewson of OPRED responded to Mr Pogson in relation to his letter of 16 November 2023 setting out that OPRED were in continuing discussions with the Gryphon field operator, Total, and that they would expect the operator to discuss and communicate their decommissioning proposals in a timely manner with all of the section 29 holders. She explained that the decommissioning programme process would usually require several early draft iterations to be reviewed by OPRED prior to consultation under section 29(2A). The final decommissioning programme would be published on OPRED’s website for formal consultation, alongside public consultation by the operator. On 9 January 2024 Sojitz responded to the letter which they had received from Ms Oxley in relation to the referral to her of the Q9GP project setting out their responses to her inquiries.

59. Earlier, on 22 December 2023, Mr Brotherton had written to the partners in the Q9GP to encourage more fruitful progress in advancing this strategically important gas project during 2024. On behalf of the defendant, Mr Brotherton “strongly urges the JV to reconsider invoking the appropriate PDA amendments to allow investors to pursue concepts not supported by the entire JV”. Mr Brotherton reinforced this encouragement by a cross-reference to paragraph 26 to 30 of the Strategy and asked for this to be put as an item on the next PDC meeting planned for 17 January. Mr Brotherton followed this up on 9 January with a letter to Ms Moira Reid at Total asking whether or not Total would immediately progress the CPP option for Q9GP if the PDA was not an issue and could be resolved in the near future. He also asked whether Total and others’ ability to progress required the PDA to be totally dissolved or the implementation of a sole risk clause. Ms Reid responded to Mr Brotherton saying that she was happy to have a call with him. On 10 January 2024 Total responded to Ms Oxley’s letter of 18 December 2023 providing further information in response to her requests. On 11 January 2024 TAQA also responded to the letter of 18 December 2023 with their own information as required by Ms Oxley. Apache responded on 12 January 2024.

60. At the meeting of the Q9GP joint venture partners on 15 January 2024 there was an inconclusive discussion of the proposal that the PDA should be amended. Mr Brotherton explained that from the defendant’s perspective the project was struggling to move forward and the defendant had little confidence that the current joint venture would deliver it. The purpose of a PDA amendment would be to allow parties who wished to progress the project to do so. The defendant was not dictating what the amendment to the PDA should look like as that was a matter for the joint venture partners. The meeting was reminded of two previous proposals for high level principles for a PDA amendment and it was identified as an action that PDC members would respond on the high-level principles for PDA amendment by 26 January 2024. Further work was approved on the identification of an FPSO option for the Q9GP project.

61. On 15 January Mr Pogson wrote on behalf of the claimant to Total contending that Total’s corporate climate change targets in relation to the reduction of routine flaring was the driver for Total’s conclusions that there must be CoP from the Gryphon area by 31 December 2024. Mr Pogson suggested that since the Gryphon FPSO was operating within its emissions consents and had recently had its classification renewed, it would be possible for Total to meet its global flaring targets by simply transferring its oil interests in the Gryphon area to the claimant and potentially other Q9 joint venturers. This would be on the basis that once oil production ceased to be economic the licence interest would be transferred back to Total for the subsequent gas project. Mr Pogson summarised the claimant’s proposal as follows:

“In summary our proposal is as follows:

1. To allow continued economic oil production, TotalEnergies will transfer its interests in the oil phase of the Gryphon Tullich, Maclure and Ballindalloch fields (the “Gryphon Area Fields”) to Nobel Upstream to continue oil production.

2. The effective date for the transfer will be 30^th September 2024 for the consideration of one pound sterling (£1).

3. Upon economic cessation of oil production from the Gryphon Area Fields, Nobel Upstream will transfer back to TotalEnergies these interests acquired in the Gryphon Area Fields to allow production of natural gas from the subsequent Q9 gas development.

4. Each party’s share of decommissioning liability for the oil phase will remain at its current level but will obviously be deferred until economic oil production has been completed.”

62. On 25 January 2024 Ms Yasmine Wattebled of Total emailed Mr Pogson explaining that they had undertaken an “in-depth internal review” of the offer that had been made in the letter of 15 January 2024, but that unfortunately it did not raise Total’s interest and noting that the proposal did not include retention of decommissioning costs. On 26 January 2024 a meeting occurred between Mr Pogson and the claimant’s solicitors and Ms Ruth Ledingham of OPRED. They discussed the changes to the section 29 notices for Maclure which reflected that the Gryphon owners owned the risers in the pipelines and the Maclure owners owned the flowline. The meeting moved on to consider the draft decommissioning plan for the Gryphon FPSO. Ms Ledingham confirmed that the draft decommissioning plan which they had received from Total included the flushing of the lines from the Maclure field up to the FPSO. Mr Pogson queried whether the activity amounted to beginning to decommission and Ms Ledingham observed that the inclusion of this information in the decommissioning plan related to flushing lines was unnecessary and was included for information only. The claimant’s position was that any activity that occurred in relation to their infrastructural pipelines should be included in the decommissioning plan as section 29 notice holders. Ms Ledingham confirmed that OPRED would usually expect an operator to discuss their plans with all relevant stakeholders but step back from requiring their approval. She explained that she had not previously come across a situation where there was disagreement amongst those involved in a hub about whether to decommission as parties were usually all aligned. Ms Ledingham is noted as stating that MER was a responsibility of the defendant not OPRED, and that usually the defendant wrote something to OPRED indicating that they were content that the infrastructure or pipeline was decommissioned. Ms Ledingham made clear that OPRED relied upon the defendant to give them a view on cost and alternatives in respect of decommissioning and that OPRED had no obligation in relation to alternatives.

63. On 25 January 2024 Ms Wyllie wrote to Mr Larry Bates of the claimant explaining that she was escalating the discussion on the Q9GP to managing director level and as such had sent him two meeting invites, first for a one-to-one session with her, and secondly for a meeting with all of the Q9GP parties. Mr Bates responded on 26 January 2024 stating that Mr Pogson was de facto managing director for the claimant’s UKCS assets and held delegation from him to attend the meetings in that capacity. Ms Wyllie responded on 29 January 2024 stating that she was requesting to engage with Mr Bates as the Managing Director as it was important to escalate matters “where the nature and potential consequences of the NSTA engagement increases in severity”. She indicated that she would be reviewing her notes on the claimant’s governance and might engage the Head of Licensee Governance to assess whether the claimant complied with the defendant’s expectations. She also drew attention to paragraph 2 of the Strategy. In a further email shortly afterwards to other colleagues in the defendant, Ms Wyllie observed that she was “receiving zero engagement” from Mr Bates. On 30 January 2024 Ms Joanne Edgeler, the Head of Licensee Governance at the defendant, wrote to Mr Bates making enquiries for further information in relation to the governance of the claimant with a view to ensuring that those governance arrangements satisfied the requirements of the defendant under its Governance Guidance.

64. On 1 February 2024 there was a further meeting of the Q9GP joint venture partners. A discussion occurred in relation to the way forward as there was still not unanimity between the partners. During the course of the discussion Mr Sadeghi on behalf of the defendant explained that the defendant did not support a “do nothing” option and requested constructive suggestions from those parties who did not approve of the proposed working plan and budget. Mr Brotherton reminded the joint venture partners of their obligations under section 26 to 30 of the Strategy which stated that if a party was not willing to invest then they should step aside. Mr Brotherton is recorded as saying he could not see any plan to break the deadlock with certain owners who did not see any value staying in the joint venture and were seeking to extract value from those who did. Mr Pogson responded that the Gryphon owners could develop a project if they saw value and come to the claimant with an offer to buy their gas and that this approach could be extended to other field owners. Mr Pogson is recorded as saying that Total and Sojitz should step aside from the oil licence and let the other three owners continue to produce oil. Mr Pogson commented that sections 26 to 30 of the Strategy applied equally to the oil as well as the gas. Mr Brotherton responded that “the NSTA has prioritised the development of gas in preference to the remaining oil”. Mr Pogson then replied that MER applies equally to all hydrocarbons under all licences, and it was not the defendant’s job to make investment choices on behalf of companies. In response, Mr Brotherton expressed concern that the continued production of oil could potentially jeopardise the development and delivery of the gas project, and that the defendant was seeking to prioritise the gas resource in the area. Mr Pogson stated he was seeking an answer as to whether or not the defendant had approved Total’s plan for Gryphon CoP at the end of 2024, to which Mr Brotherton replied that Mr Pogson should go through the correct channels within the defendant. Mr Pogson indicated that the claimant had sent numerous letters to the defendant seeking this clarity and was still awaiting a satisfactory response. Ultimately, the meeting noted that there would be no further joint venture activity prior to the meeting between the owner, managing directors and the defendant on 21 February and it was proposed that they should regroup after that meeting.

65. On 5 February 2024 Ms Ruth Hoult at OPRED had an email exchange with Ms Wyllie in relation to whether or not the Tullich, Ballindalloch and Maclure fields which were tied back to the Gryphon FPSO were currently on a twelve month zero production licence. Ms Wyllie responded that as far as she could recall, the fields did not have a zero production consent, and as they were in production she thought they would have a maximum and minimum production volume. She queried why zero production on the licence was relevant as the “vessel is due to sail away later this year and this will start the clock, from a licensing perspective”. She noted that there was a time frame for zero production on the licence which meant that the defendant would have the right but not the obligation to take action to revoke the licences after that time frame had elapsed.

66. On 7 February 2024 the defendant’s Mr Thomas held a meeting with Mr Ken Watt and Mr Malcolm Watt of Total in relation to the Gryphon FPSO CoP and re-use or repurposing. The discussion confirmed the extent of the discussions and consultations pertaining to the Gryphon FPSO CoP and confirmed that Sojitz fully supported the decision to CoP at the end of 2024. The discussion noted the challenge that had been received from the claimant, and contended that all of the points which had been raised with Total by the claimant had been dealt with. The drivers for CoP were noted as being the FPSO’s integrity, its environmental performance and its economic performance. It noted that in the re-use/repurposing assessment completed by the Gryphon FPSO operator in 2023 it was concluded that there were no viable redeployment opportunities for the FPSO and dismantling and recycling was selected as the base case option.

67. On 8 February 2024 there was an email debate between Mr Brotherton and Mr Pogson about the content of the draft minutes of the meeting of 1 February 2024 that had been prepared for approval. Ultimately, they were able to agree on a form of words, and to reassure Mr Pogson Mr Brotherton recorded the following as reflecting the position of the defendant in relation to the Q9GP project:

“As a licensee on licences tying back to Gryphon, the NSTA is willing to hear your ideas on how Nobel (and others?), may extend the oil life of the Gryphon area, prior to a potential gas development.

The NSTA has always encouraged licensees to get on with oil opportunities, prior to gas, as the window is closing.

The Gryphon JV have stated their position, but this does not mean other licensees in the area cannot appraise alternative options, potentially through commercial transactions etc…

If you feel Nobel has a solution to extract further oil value in the short term, the NSTA will listen.”

68. On 14 February 2024 Mr Bates wrote on behalf of the claimant to Ms Edgeler seeking clarification of the concerns that the defendant had so as to enable the claimant to respond appropriately and relevantly to her letter. He also sought an understanding of the concerns that had provoked the letter and why the information was requested by her. It appears that on 20 February 2024 Mr Pogson met with Mr Parra to discuss the details of the claimant’s proposals and to seek to address Total’s concerns. Mr Parra explained to Mr Pogson that he did not have a mandate to complete a transaction with the claimant and that to change the mandate the claimant would have to revert to Total in Paris. As a result the claimant decided to take the issue up with Mr Pouyanne, the CEO of Total instead.

69. On 21 February 2024 the meeting which had been proposed by Ms Wyllie in an email from her on 6 February 2024 to escalate issues in relation to the Q9GP project occurred. At the meeting the defendant set out that a technically credible and economically viable development had not yet been presented to the joint venture partners so as to support investment, and that the project had now been discussed for ten years with the defendant. It was observed that once oil production ceased the defendant would have the right to determine the licence after a particular time period had elapsed (either twelve or twenty four months depending upon the licence) and in order to protect the licences it would be necessary for consent for further development to be in place. The defendant was concerned on the basis that there was presently not a work plan and budget in place to cover the gas development, nor was there a project team in place. The defendant pointed out that it had stepped in to encourage sole risk provision to be put in place to allow those who wished to invest the ability to do so. The defendant encouraged the managing directors to discuss a way forward as failing to work on such a strategically significant volume of gas which was required for the UK’s energy security was not an option. It was noted that whilst the defendant could not force investment in the UK, should a partner not wish to invest then a mechanism needed to be established to enable them to step aside and allow others to continue. During the course of the discussions it appears that Mr Pogson referenced the claimant’s offer to purchase the Gryphon FPSO, which was the first time Ms Wyllie had heard of the proposal.

70. On 22 February 2024 Ms Edgeler responded to Mr Bates advising that her letter had been prompted by requests from Ms Wyllie for managing director-level engagement with key meetings with the defendant and Mr Bates’ observation that Mr Pogson had assumed the role of “de facto UK MD”. She advised a review had commenced into governance structures at the claimant based on publicly available sources, and that further additional information was required from Mr Bates to enable the defendant to determine whether adequate governance arrangements were in place at the claimant.

71. Following the managing director-level meeting, Mr Knight wrote to Mr Pogson on 23 February 2024 taking the action considered at the meeting to require the claimant as one of the joint venture partners to give consideration to the inclusion of a sole risk provision in the PDA to cover the situation where unanimous approval is not achieved as required by section 3.4.3 of the PDA. Mr Knight expressed his concern that this was not consistent with paragraph 26 to 30 of the Strategy, and that in order to comply with the Strategy the defendant’s view was that the parties urgently needed to amend the PDA so as to include a sole risk provision in order to unlock the current impasse between the parties. Mr Pogson indicated that he was studying the PDA in response to the discussion at the meeting, and then in a subsequent email raised queries about with whom he should be discussing operatorship and the use of a duty holder. On 26 February 2024 Mr Knight sent Mr Pogson links from the defendant’s website in relation to operatorship and the guidelines for field operators and indicated his willingness to discuss these issues with the claimant and Total when there was a more developed plan.

72. On 23 February 2024 Ms Wyllie wrote to Mr Wheeler setting out her views following the meeting which had taken place shortly prior. The email records as follows:

“It is my flex Friday today but I usually don’t mind taking calls if anything pops up. Today however I have no voice. It must have been all the shouting Geoff and I did this week at Q9 Owners. I was going to call you to give a 5 minute update….

Basically I set out in 1:1’s that the Gryphon Sali away will start the clock upon which the NSTA can take licences back.

As this is so significant I wanted MD’s to be aware. In discussion with TAQA they set out a sales process and Geoff and I looked a bit grumpy at it and said, we’d need to see the detail, but on the face of it they don’t have a development consent and we didn’t see that they had anything to sell (the gas is in a trust deed).

Before the MD’s meeting Nicolas called me and said that our pressure had flipped TAQA and that a previously rejected offer was now being actively discussed. If TAQA are looking to sell to Total, then TAQA may approve the WP&B. Nicolas was feeling far more positive about the situation.

Geoff is writing to the Owners to say that the PDA (JOA for gas) is not aligned with the OGA Strategy as it doesn ’t have a sole risk provision. Not consistent with Para 27. TAQA need this in order to get HQ to allow a change to the PDA, to include a sole risk provision.

I feel far more positive today that a commercial solution is being worked….”

73. On 26 February 2024 Mr Bates of the claimant wrote to Mr Patrick Pouyanné of Total. In the letter he explained the claimant’s proposed solution to enable Total to meet its global flaring targets by transferring its oil interests in the Gryphon area to those partners wishing to continue to produce oil on the basis that once oil production had ceased to be economic, the licence interests would be transferred back to Total to execute the gas project, subject to an economic development plan being realised. Mr Bates indicated that Total in the UK had recently begun to discuss this solution with the claimant and other joint venture partners but “finds itself constrained by its current mandate for cessation of production at the end of 2024”. Mr Bates suggested that rather than proceeding with decommissioning the transfer arrangement he was proposing could be executed quickly and in compliance with UK legislation. Mr Bates asked Mr Pouyanné to instruct Total in the UK to engage with the joint venture partners to agree details of the transfer for the benefit of all parties.

74. On 27 February 2024 Mr Watt at Total sent Mr Thomas at the defendant the Gryphon owners’ completed assessment of reuse and repurposing summarised within the defendant’s template. On 29 February 2024 Ms Wyllie responded to an email which Mr Pogson had sent earlier following an observation that she had made to him after the meeting on 21 February 2024 that he should give her a call. Ms Wyllie explained that her comment was meant in general terms and that he should feel free to pick up the phone and call her if he thought it would be helpful bearing in mind that she was aware that she talked fairly regularly with the others who were in the meeting. Mr Pogson responded to this offer saying that he would take her up on the offer of reasonably regular dialogue as a more efficient way of doing business.

75. On 28 February Ms Wyllie contacted a number of colleagues within the defendant following on her further thinking as a result of the 21 February 2024 meeting. She explained that she needed their advice following on some progress which had been made in applying pressure to the joint venture parties that week. She needed help with the mechanisms available to enable the defendant to achieve its objectives. Those objectives were the sanctioning of a gas project and those who did not wish to invest in the project stepping aside in some way. She set out the transactions which were currently in play at that time and the possible actions that the defendant could consider in the following terms:

“Transactions in play:

1. TAQA divestment process

TAQA want out of the gas project and have been running a divestment process. This brings in A.N.Other which may not help. How does this work? What’s the commercial structure to sell a gas project which has no Regulatory Consent?

Simple terms: it doesn’t work as once oil production is finished there is no reason to keep the licence and the NSTA can move to take it back.

2. TAQA and Total

An offer was made for Total to purchase TAQA equity in the gas project. This had been rejected previously but has now been resurrected.

Presumably there will be a few CP’s:

Approve the WP&B

Approve the PDA Sole Risk Amendment

NSTA allows the licence to be extant following oil COP?

3. Nobel and Total

Nobel have made an offer to purchase the Gryphon FPSO for a nominal sum. Presumably the structure would be broadly like:

Nominal sum possibly $1

No decom liability

Nobel use the FPSO and hand it back for decom afterwards

Nobel would need to complete due diligence, hire a duty holder, change the safety case, gain regulatory approvals, TUPE staff…etc

Very low likelihood of occurring and certainly not in time

NSTA Actions to consider:

4. Encourage the TAQA/Total transaction.

5. Encourage Total and Apache and Nobel should they become apparent – not currently in play.

6. Encourage the PDA Amendment which allows sole risk:

a. Total, Sojitz and TAQA (transaction dependent) all in agreement to change

b. Apache? Geoff flushing this out.

c. Nobel? Geoff flushing this out.

7. Should Apache and Nobel not allow PDA Amendment, consider D&S action as PDA not compliant with OGA Strategy para 27.

Should the budget be blocked, this is a demonstration of the PDA not allowing those to proceed that wish to.

8. Once the Gryphon COP’s (late ’23) consider mechanism to remove blocking parties from licences: Maclure, Ballindalloch, Tulloch.

12 months with no production – can take back licence but difficult in multi field licences.

Can we remove on or two parties but allow the licence to remain extant?

9. Is there any comfort we can provide to those wishing to work the CPP to ensure they keep the gas volumes?”

76. Mr Knight had forwarded emails he had received from Mr Pogson to Ms Wyllie in which Mr Pogson had made reference to the transaction the claimant was pursuing with Total relating to the remaining oil in the Gryphon field. On 29 February 2024 Ms Wyllie asked Mr Knight if he had followed up this with Mr Pogson. She noted that it would be good to get the detail behind the proposed transaction and whilst there was “[l]ow likelihood of the FPSO purchase but are they also talking about gas transaction?” She considered that the “door is open here for a dialogue”.

77. On 5 March 2024 Ms Wyllie reported back to Mr Wheeler in relation to the meeting which she had had with the D&S team and other colleagues from the defendant. She recorded that there appeared to have been a breakthrough with TAQA and Total negotiating a transaction at that time. She intended to ask Mr Knight to write to all of the joint venture partners setting out that the voting rights in the PDA were hampering progress, and that in order to meet their obligations under the Strategy all parties needed to work collectively on an amendment to the PDA to align with industry standard agreements or explain why that was not necessary. Failing this, Ms Wyllie was in favour of exploring the taking of action on the basis of a failure to deliver the Strategy. She sought Mr Wheeler’s assistance with prioritising the Q9GP issues with other directorates within the defendant, and observed that in her view the time was ripe to apply the final pressure to get the first transaction complete, change the voting rights and achieve approval to the working plan and budget.

78. On 6 March 2024 Ms Innes emailed Mr Thomas setting out her thoughts in relation to the Gryphon FPSO. These included the need to email OPRED explaining that the defendant was engaging with Total in accordance with section 29(2A) of the 1998 Act; email Total explaining that their proposals were under consideration; and email the claimant in similar terms explaining that the defendant was engaging with Total and had not concluded its assessment. The final issue was to review the defendant’s view on MER obligations. She said it appeared to be the position that the Ops Team were satisfied that MER obligations had to be delivered over the life of the field and “given the low level of remaining hydrocarbons and the high level of emissions from Gryphon the NSTA does not object to Total’s plans to cease production, noting the impact on tie back facilities”. Equally, if there were somebody willing to take the transfer of the Total licence then that is a matter the defendant would consider. Ms Innes indicated that once they had reached a concluded view on whether there were alternatives to decommissioning, then they would need to take legal advice on whether that view should be shared with others such as the claimant. Ms Innes expressed her personal view that she would wish to be able to share it with others subject to legal advice.

79. On 12 March 2024 Mr Jean-Luc Guiziou of Total responded to Mr Bates’ letter of 26 February 2024. He observed that the Gryphon FPSO CoP was a matter for the Gryphon FPSO owners and was not driven by Total’s corporate climate targets. Rather, it was driven by the vulnerability of the ageing FPSO and the requirement to ensure safe and reliable operations coupled with the low economic value of the fields and the high level of emissions from the FPSO. Mr Guiziou expressed his regret that, having been issued with all relevant notices in a timely fashion, the claimant’s initial response had been solely to threaten legal proceedings and engage in lengthy solicitors’ correspondence. Mr Guiziou noted that the claimant’s proposal would require the claimant to be approved by the UK regulators as an operator and would involve Total retaining the decommissioning costs and liabilities which was unattractive. He concluded that they did not see this proposal as either credible, or one which Total had an interest in pursuing. They were also unaware of any support from TAQA or Apache to such a proposal.

80. On 13 March 2024 Mr Hutchinson wrote on behalf of TAQA to Mr Wheeler at the defendant expressing concern about the accelerated CoP of the Gryphon FPSO and rejecting the justifications based upon reliability and economic performance of continued oil production as well as noting the impact of the Gryphon FPSO on the global targets set by Total for reduction of emissions. Mr Hutchinson sought further discussions with the defendant in relation to these issues. Following receipt of this letter Ms Wyllie wrote on 21 March 2024 to Mr Wheeler asking for his views on the contents of the letter. Mr Wheeler responded in the following terms:

“I believe the issue TAQA (and Nobel) are trying to take with us (ops) is that we have not done enough to require Total to meet para 11 of the Strategy.

As discussed, I believe our position is that this is not a priority hub for us and that the effort and likelihood of success of trying to prove that the Operator in this case has not done what is required does not meet our prioritisation thresholds, given the value at stake.

That being the case, I think it then falls to Pauline to decide what to do under the formal statutory decom process (but I’m a bit less clear on that).”

81. It seems that in response to Mr Knight’s email on 23 February 2024 there was no unanimous agreement to engage with the defendant’s request that the PDA be modified leading to a further impasse. On 8 March 2024 Mr Knight wrote again to the joint venture partners encouraging cooperation and reiterating the defendant’s view that the PDA did not reflect industry standard voting rights, and that until unanimity was removed it would continue to be the defendant’s view that there was no progress being made with the gas project and that the licensees would not be delivering upon the essential obligations under the Strategy. Mr Pogson responded giving his view that the Beryl tie back option remained viable and that the attitude of the PDO that discussions with Beryl should be shut down was inexplicable. On 25 March 2024 Mr Knight wrote to Mr Pogson seeking time to discuss the issues raised in the meetings and emails, copying in Ms Wyllie, who responded to Mr Pogson offering for him to come to the office and for them both to have a coffee together.

82. On 27 March 2024 Ms Wyllie wrote to Ms Caroline Graham of the defendant setting down some basic thoughts in relation to the letter they had received from the claimant. She observed as follows:

“Things to consider:

• Nobel do not own the Gryphon FPSO.

• Nobel are requesting confidential information such as our correspondence, info gathered and economic models. In my view we can’t/shouldn’t be engaging on this.

• Nobel are very narrow focussed; MER, they never seem to refer to any other considerations…

• Nobel own 1% of the gas project and can/are blocking budgets.

• I called Nobel today with a holding statement. I asked if there was anything else I could help them with, they answered no.”

83. On 26 March 2024 Mr Alasdair Thomas, a Decommissioning Manager at the defendant, wrote to Mr Ken Watt at Total following on from Mr Watt submitting the defendant’s template in relation to an assessment of re-use or repurposing. He advised Mr Watt that the defendant was still considering Total’s proposals for the Gryphon FPSO. He set out that whilst noting the Gryphon owners’ preferred option was decommissioning, the claimant had advised the defendant that they were interested in the continued use of the Gryphon FPSO. Mr Thomas therefore requested the Gryphon FPSO owners to explore that option, reverting back to the defendant with further information when the option had been discussed along with any conclusions of that discussion. He requested that the discussion should include all the tie back licensees to ascertain whether any of them were interested in taking over the Gryphon FPSO or field. He asked that all future options were fully considered and discussed. Following receipt of the email, Mr Watt and Mr Thomas agreed to meet to discuss the issues. Mr Thomas reported back to Ms Innes following the meeting and advised her that he had been told that, as part of the ongoing discussion in relation to the Gryphon FPSO, Total had been approached by the claimant in respect of a change in the operator structure for the FPSO. The claimant proposed that they operate the FPSO and when they had finished to hand it back to Total, with Total taking responsibility for decommissioning the facility thereafter. Total had rejected the offer from the claimant.

84. On 2 April 2024 a meeting was held between Ms Wyllie, Mr Knight and Mr Pogson. The meeting was held at the defendant’s request to have an open and exploratory discussion in respect of the Q9GP project. The discussion involved the intention of the Gryphon FPSO owners to cease production in 2024 and what the next steps might be for both the oil production fields and the Q9GP. The note of the meeting records as follows:

“Nobel set out that they have made a commercial offer to Total (via Paris office) to take over operatorship of the FPSO in order to continue producing for another couple of years. The intent would be that Nobel be appointed Production Operator of the licence(s) and then contract a duty holder, such as Petrofrac, on behalf of TAQA and Apache.

NSTA set out that this is very ambitious considering the timeframe available to Nobel.

*post meeting I note this was set out in the letter dated 09 NOV 2023. However, Nobel, TAQA or Apache have not engaged with the NSTA on the substance of such a transfer. A request was not made in the meeting to engage on this proposed transfer of Operatorship.

The NSTA as set out that at the present time there is not:

1. a work plan and budget in place that is covering the gas development; and

2. there is not a project team in place.

A broad and open discussion was held, with the focus from Nobel on MER.”

85. On 3 April 2024 Ms Wyllie contacted Mr Jones of the defendant asking him whether TAQA, Apache or the claimant had been in touch with him on the potential for the claimant to be appointed production operator on the Maclure, Ballindalloch, Gryphon and Tullich licences. She indicated to Mr Jones that there was a proposed transaction for Total to step off the licences, the claimant to be appointed production operator, Nobel to contract with Petrofac to be the duty holder and the FPSO to be operated for a couple of years and at CoP the vessel to be handed back to Total for decommissioning. In her email, she recorded as follows:

“Just joining some dots here, can you help me a quick question. Have either TAQA, Apache or Nobel Upstream been in touch with you on the potential for Nobel to be appointed Production Operator on the Maclure, Ballindalloch, Gryphon and Tullich licences? The proposed transaction would be for Total to step off the licences, Nobel be appointed PO, Nobel to contract with Petrofrac to be the duty holder, the FPSO to be operated for a couple of years, then at COP the vessel handed back to Total for decommissioning.

This is the sum total of the detail I have, so I am wondering if any party has approached you to talk about the substance of this proposed transaction?

Total have set out that the transaction does not work for them, in principle, so this may not have any legs to it. Perhaps its all a wild goose chase…?

Additionally, Nobel have set out that they may have a company purchase deal in the offing? They are considering purchasing a company. They were surprised that a change of control would require NSTA review.

Any intel you have would be very welcomed.”

86. Mr Jones indicated that he had had no contact from either TAQA, Apache or Nobel in that connection.

87. On 4 April 2024 Ms Wyllie attended a special meeting of the Maclure field owners in relation to a Flushing and Disconnection Agreement which had been issued by Total as the Gryphon operator. It appeared to Ms Wyllie that the Maclure Operator was seeking input on documents pertaining to the Flushing and Disconnection Agreement. In her email recording her observations at the meeting sent to Mr Thomas and Mr Knight, she stated as follows:

“What I observed at the Special OCM was the other Maclure Owners not engaging with any comments on the Flushing and Disconnection Agreement. They may hold a view that they wish production to continue, although no firm alternative has been proposed. An alternative duty holder position has been voiced but as far as I gathered this has not been proposed formally in any way.

So the conclusions I was left with:

1. The Maclure Owners base line plan does not include appropriately planning for the decommissioning of their field.

2. The Maclure Owners baseline plan is to leave the Maclure production flowline (the bit that they own) live and lying on the seabed, as they are not engaging on the Flushing and Disconnection Agreement.

3. There is not a Field wide DSA in place. Ops are working on this as we requested it back in 2017 (or there abouts).”

88. Following the meeting, also on 4 April 2024, Ms Wyllie wrote to the Maclure owners thanking them for the opportunity to speak with them prior to the special meeting. In the email, she recorded as follows:

“Ahead of the OCM I set out that:

1. A field wide DSA is not in place and it is my recollection that this was requested by the NSTA as far back as 2017.

2. Field Owners should be on a 6 year glide path to decommissioning, in order to meet their obligation of cost efficient decom.

3. A termination notice has been served and as such the base plan should be the efficient decommissioning of the field, in line with the Stewardship Expectation. Any upside, of continued production can be held as an upside scenario.

4. The rig market is tight, and engagement early to ensure you meet your licence obligations is essential.”

89. Ms Wyllie concluded the email by observing that the meeting had gone in circles and been very repetitive, and that while she understood frustrations could run high, she reminded the participants that raising voices and talking confrontationally was not acceptable and was the reason why she had left the meeting.

90. On 4 April 2024 Mr Payer of Total wrote to Mr Bisset to explain the steps that had been taken in relation to potential disposal of the Gryphon FPSO and Total’s consideration of its potential for repurposing or re-use. In summary, the letter set out that in 2021 to 2022, Total had approached credible operators and engaged with three potential buyers without success. They also engaged a broker to market the FPSO for sale and re-use but the response was not encouraging. Thus, the base case assumption was that the FPSO would be disconnected and recycled or disposed of. The letter also addressed the proposal from the claimant and Total’s rejection of it: the letter records Total’s view that it was not credible given their conclusions about the claimant’s limited financial and technical capabilities and lack of experience as an operator. The letter went on to record concerns in relation to the integrity of the Gryphon FPSO recording recent examples of its fragility and vulnerabilities. The letter further identified that the emissions intensity of the Gryphon FPSO was high as were its emissions. Taking all of these factors into account the letter concluded that Total were firmly of the view that their proposals were appropriate and recorded that they were engaging with contractors to arrange for the making safe of the FPSO and securing vessel availability for its sail away and de-connection in Q1/2 2025, as well as investigating appropriate yards for dismantling and recycling.

91. During April 2024 representatives of Total were pressing the defendant to accept that there were no credible repurposing or reuse options for the Gryphon FPSO and the defendant made plain that these matters were still under consideration in the light of the information they had received.

92. On 10 April 2024 Mr Pogson wrote an email to Ms Innes in the following terms:

“Forgive me for contacting you somewhat out of the blue but I wished to follow up on your letter to me of 8th December 2023 (attached). Since you sent your response we have made a formal offer to TotalEnergies to acquire their licence interests in the Gryphon area and to continue to operate the Gryphon FPSO to maximise recovery of economic petroleum from the fields tied back to the Gryphon FPSO including the Maclure and Ballindalloch fields in which we hold equity interests. Neither Nobel Upstream, TAQA nor Apache wish to cease production from the area since our analysis shows oil production to be economically viable to at least end 2027. Indeed TotalEnergies, the Operator has not based its decision to cease production on economic grounds but on its own internal emissions targets that come into force on the 1st January 2025.

Since you’re evaluating alternatives to decommissioning I should like to propose a meeting to discuss our approach in more detail. I’d also propose we invite TAQA and Apache so you have their perspective too. Finally, paragraphs 26-30 of the OGA Strategy would seem to mandate that TotalEnergies accept our proposal to continue production given their decision not to ensure Maximum Economic Recovery. To date they have been reluctant to engage despite the three non-operating Maclure owners declaring that to cease production at the end of 2024 would not be compliant with the Central Obligation.

I look forward to meeting with you in pursuit of securing MER for he Gryphon area fields.”

93. Ms Innes recognised that this email “might need us to take a different approach”. On 11 April Ms Wyllie wrote to Ms Innes, Mr Thomas, Mr Bisset and other colleagues in relation to a proposed letter to Nobel which it appears she had been discussing with those colleagues gathering up all the various issues. Her view is expressed in the email in the following terms:

“I have been discussing with you all a proposed letter to Nobel where we gather up all the various threads and address them in one letter. It is my view that:

1. The Maclure Owners base line plan does not include appropriately planning for the decommissioning of their field.

2. The Maclure Owners baseline plan is to leave the Maclure production flowline (the bit that they own) live and lying on the seabed, as they are not engaging on the Flushing and Disconnection Agreement.

3. There is not a Field wide DSA in place. Ops are working on this as we requested it back in 2017.

4. Nobel have no written agreement in place with TAQA or Apache to describe a transaction to purchase and operate the Gryphon FPSO.

5. Joanne has been engaging on Nobel’s governance. Total also commented upon this in their recent letter to the NSTA

6. Ian may have a view of financial resilience??”

94. Ms Innes indicated in an email to a colleague that she would respond to Ms Wyllie’s email agreeing with the principle but asking for the letter to be paused. In a separate email Ms Innes suggested to Mr Pogson that they should have a meeting and asked if he wished to include TAQA and Apache in the meeting. Ms Innes then replied to Ms Wyllie’s email indicating that she agreed that they should work together to draft a considered response and that the points that Ms Wyllie had raised were aspects that they needed to review. She advised that she had involved the defendant’s Mr Alistair Dunbar, a senior policy manager, to review “the story so far” so that they could check their obligations under the Strategy and the 1998 Act. She said that whilst she suspected that they had nearly everything to make a recommendation in relation to alternatives and decommissioning, Mr Dunbar’s independent review would help to clarify this. She also explained that she had agreed to meet with the claimant and that arrangements were in hand.

95. On 15 April 2024 Ms Ledingham of OPRED advised Mr Pogson that their review and consideration of legal advice in relation to the Gryphon FPSO decommissioning was ongoing and the review of the decommissioning programme was not at that time progressing. Also on 15 April 2024 Mr Dunbar reported back to Ms Innes with his summary of the requirements in relation to decommissioning. On 16 April Mr Pogson, along with representatives of Apache and TAQA, wrote to Mr Wheeler in the light of observations they had recorded Ms Wyllie making at the special meeting on 4 April. They alleged she had said “there is no regulatory approval of CoP” and “it is not for the NSTA to determine whether there is compliance with MER”. The purpose of the letter was to seek clarity on the authority providing approval of CoP and which determined compliance with MER. In fact, for completeness, a little later on 15 May 2024 Ms Wyllie set out in an email to Total in response to the draft minutes, that she believed that she had said that it was not for the defendant’s operations directorate to determine whether there is compliance with MER, but she was not talking for the whole of the defendant’s organisation when she had said this.

96. On 19 April Ms Wyllie wrote a lengthy email to the defendant’s company secretary copying Mr Wheeler, Ms Innes and Mr Greenhowe responding to the letter received from the claimant, TAQA and Apache. She set out the meetings which she had had immediately prior to and around the special meeting. She set out the following in response to the suggestions in the letter and also in respect of the claimant’s proposal:

“The OCM minutes, in draft, have not yet been issued but I would expect that they will reflect:

During the OCM Nobel continually referred to the NSTA’s regulatory approval of Gryphon COP. I corrected Mr Pogson and set out that the COP process, which used to result in a letter of no objection, had been retired some years ago and that there was not a regulatory decision at COP. I am sure this will be captured in the minutes when they are sent out by Total.

Following the OCM, I offered to share some observations on the Special OCM. I did not say “it is not for the NSTA to determine whether there is compliance with MER” in the Special OCM, but this was a portion of what I said in this brief discussion following the Special OCM. I was setting out that this forum (the meeting we were in) was not the forum for the NSTA to determine whether the Gryphon Owners (Total and Sojitz) were compliant with MER principles. In this brief meeting Mr Pogson often raised his voice and shouted things like “that is ridiculous, are you a regulator or not, when are you going to start regulating”. He would cut me off mid-sentence. I set out several times that if the Maclure Owners had a specific request to set it out in an email such that a thoughtful response could be provided.

Over a year ago the Gryphon Owners (Total and Sojitz) issued a termination notice to the 3rd party fields.

Nobel assert that they should be assigned all Total oil rights, Nobel will engage a contractor duty holder, and Nobel will oversee the continued production of the Gryphon FPSO, with decommissioning liabilities held with Total and Sojitz (hand the keys back afterwards).

In discussion with TAQA there are no Heads of Terms in place, indeed TAQA (Sandy) asserts that there is nothing in writing, not even an email, setting out what this relationship could look like.

Nobel have asked us (letter to Russell in Nov ’23) to engage with them on this proposal. Without any HOT, draft HOT’s, or verbal alignment between other Owners (TAQA and Apache) the deal is embryonic. I simply can’t engage in a substantial way with every embryonic notion or idea people may have, rather I wait until there is alignment between buyers, with a proposal (including open book economics) on what the deal they are chasing may look like. I have not engaged as this transaction, based on the lack of alignment, appears to have no legs.

Nobel wrote to Total (letter attached), a year after the termination notice had been served.

Total do not see this as a credible transaction that they would enter into.

The letter from Nobel, TAQA and Apache which asks:

“…please clarify who is responsible for determining whether the decision to cease production of economic oil over the Gryphon FPSO at the end-2024 is compliant with MER.”

The main issue here is that Mr Pogson does not own the Gryphon FPSO and therefore has no rights to the information that the Owners share with the NSTA. The Owners have served the termination notice and the FPSO will sail away. Without any infrastructure in place, the Maclure Owners do not have any economic oil volumes. They have not set out a mature transaction to put in place infrastructure. Therefore, the assessment is fairly easy. There are no economic volumes in Maclure as the infrastructure will sail away.

The Decom team have enter into discussion with Total on reuse or repurposing options. I will leave Pauline to set out where this process is, but I believe Total have explained a divestment process (of the FPSO) that they followed a couple of years ago, with no success. They do not see Nobels suggested transaction as credible.

I think we are now in desperate need of a letter(s) to close this out…

As an aside, I find it interesting that Mr Pogson likes to escalate matters, but the NSTA can not get any escalation within Nobel, rather Mr Pogson is the TCM, OCM rep and the CEO will not engage with us as he says Mr Pogson is the de facto MD. It’s a one man organisation that is using bullying tactics to showboat in meetings and is very blinkered into thinking MER is a spreadsheet with production, OPEX and CAPEX and does not take other matters into account; cost effective decom, emission reduction, progression of the gas project etc.”

97. Earlier on 18 April 2024 Mr Pogson wrote to Mr Guiziou of Total in response to his letter of 12 March 2024. Mr Pogson reiterated the claimant’s concerns which he noted were shared by TAQA and Apache and refuted the basis for Total’s decision. He reinforced the importance of the obligation to comply with MER and his view that the continued extraction of oil was viable. Finally, Mr Pogson reiterated the Nobel proposal and its benefits.

98. On 19 April 2024 Ms Innes had a telephone conversation with Mr Parra of Total and explained that the defendant was continuing to consider alternatives to decommissioning in accordance with their obligations under the 1998 Act and the Strategy. She explained that the defendant was interested in Total’s assessment of any offer that they had received and wished to understand the basis of any rejection of an offer. Any such evidence would assist their assessment of whether there are viable alternatives to decommissioning. Ms Innes advised that she had a meeting with the claimant, Apache and TAQA at the end of the month to discuss alternatives to decommissioning. Following this conversation it seems that Total sought confirmation on 23 April 2024 in an email to Ms Innes that the defendant accepted that there was no viable repurposing or reuse options for the Gryphon FPSO. Ms Innes responded that the defendant had not completed its assessment of alternatives to decommissioning and was due to be meeting the claimant, TAQA and Apache shortly. Mr Pogson’s letter of 18 April 2024 was responded to by Mr Payer in a draft letter of 25 April reiterating the points previously made as to why Total did not accept his views and did not consider the proposal viable. The response was written on behalf of Total by Mr Payer and was shared by Mr Parra with Ms Innes and Ms Wyllie on 26 April 2024 with him explaining that it was subject to internal discussion at Total.

99. On 30 April 2024 Mr Campbell Murdoch of Total was in touch with Ms Innes explaining that he would like a further discussion on the Gryphon FPSO sail away and Ms Innes responded that the meeting with the claimant, TAQA and Apache had been postponed until 2 May. On 1 May Mr Murdoch responded saying that the letter had still not been finalised and he would welcome any feedback from the meeting to be had with the claimant, TAQA and Apache. On 29 April 2024 Mr Pogson wrote to Mr Sadeghi seeking the application form to become an operator which he had been unable to locate on the defendant’s website. He also chased a response from the defendant to the joint letter of 16 April 2024. Finally, Mr Pogson wrote to Ms Innes on 29 April 2024 summarising the matters for discussion at their forthcoming meeting. The summary set out the Gryphon operators’ proposal to CoP at the end of 2024 and the desire of non-operating parties to continue oil production from the Gryphon area “in order to deliver MER”. The claimant’s proposal to acquire Total’s licence interests and assume ownership and operation of the Gryphon FPSO was noted and the matter for discussion in the light of Total’s rejection of the proposal “is the regulator’s role in ensuring all parties meet their obligations under the Strategy and specifically the obligations described in paragraphs 26 to 30”. In response to this summary, on 30 April 2024 Ms Innes asked if Mr Pogson could circulate any additional material in respect of the issues prior to the meeting and Mr Pogson agreed to do so. On 30 April 2024 Mr Pogson circulated a number of documents and set out in an email his view of the history of the matter including the opportunity presented by the claimant’s proposal. He noted the claimant estimated that continued production from the Gryphon area post-2024 would represent around $250 million in pre-tax cash flow.

100. On 3 May 2024 Mr Pogson wrote to Ms Innes following their meeting on 2 May 2024 thanking her for “what I felt was a very constructive meeting which provided some much needed clarity”. He explained that the claimant remained committed to its proposal to deliver MER and he was convinced that the pre-tax cash flow in the continuing production of oil could “be delivered by meaningful, good faith engagement between the parties”. He requested the operator question list which had been discussed and Mr Sadeghi forwarded it to him in response. Also on 3 May 2024 Ms Innes had a telephone conversation with Mr Murdoch from Total explaining that the meeting with the claimant, Apache and TAQA had been an opportunity to explore economic, technical and commercial viability and that the main request from the meeting’s participants was for Total to engage in a meaningful way with the commercial opportunities to extend the life of the field as well as explaining the technical risks and economics to TAQA and Apache in more detail. Ms Innes requested further evidence in relation to the marketing of the infrastructure in 2022 by Total. Ms Innes pointed out that the concerns raised by the participants were that Total were not engaging in a collaborative manner and that while Total might dispute this “the fact remains that Nobel, TAQA and Apache feel that Total hasn’t behaved in accordance with our expectations”.

101. On 3 May 2024 Ms Innes wrote to Mr Bisset and Mr Thomas in relation to the alternatives to decommissioning of the Gryphon FPSO. She indicated that “we are reaching the point of concluding our assessment of alternatives to decommissioning in respect of the Gryphon field”. She noted that they did not have a decision noted in relation to giving advice to OPRED. The defendant also did not have anyone assigned to assess alternatives to decommissioning as a foundation for providing the advice to OPRED. Ms Innes said that she considered that she ought to be the decision-maker in relation to that issue, taking advice from LT (the defendant’s leadership team) to help assist with the decision. She proposed to prepare a “minded to” note for consultation with LT from the material available. On 7 May 2024 Mr Sadeghi wrote an email to Ms Innes in respect of an informal conversation which he had with Apache. He records the content of the conversation as follows:

“Apache are generally supportive of Nobel’s proposal but also generally consider change of operatorship from TE to Nobel and expensive step for the remaining value of HC in the area. Seems (unsurprisingly) their preference is to keep the incumbent operator but find a way to satisfy needs of Total in some other fashion. Due to confidentiality issues, amongst other reasons, little information has been shared with Apache and Taqa which makes matters murky and further breeds suspicion at best.

In my own view, if Total are willing, perhaps a re-jig of existing commercial arrangements may make Gryphon more commercially attractive and thus make it possible to push the COP to the right.

I will attempt to speak with Sojitz just to make sure I have heard, on a first-hand basis, where they are on this matter.”

102. At around this time, on 6 May 2024, it appears that a “Supply Chain and Decommissioning Director minded to decision support paper” was prepared by Ms Innes for consideration internally by her colleagues at the defendant. A track changed version of this draft is within the bundle containing the commentary provided by the individuals consulted about it. The draft paper addressed a variety of considerations bearing upon the opportunities for viable alternatives to decommissioning including repurposing, reuse and continued use. Under continued use, the draft paper recorded the efforts to sell the infrastructure which the defendant had been advised of by Total, and also the alternative proposal from the claimant. A query was raised in the tracking of the document requesting a view from Ms Wyllie on the viability of continued use of the Gryphon field and whether or not the Ops team had a view which could be used to support the decision. Ms Wyllie tracked her comment on this query into the documents as follows: “TEPUK have set out their view and “making them” do anything different is incredibly difficult and not something we have ever done before. Therefore, aligning with cost-effective decom is the route here.” The conclusion which the draft reached was that the defendant agreed that there were low opportunities to re-use or repurpose the infrastructure. Whilst noting that the claimant and Total held different views in relation to the economic, commercial and technical viability of continued use, it was also noted that the parties were a long way from reaching any commercially acceptable solution and had not reached agreement during the fifteen months from service of termination notices. The defendant therefore agreed with Total’s assessment that there was no viable alternative to decommissioning.

103. In an earlier draft Ms Wyllie had invited inclusion in the section detailing Total’s rejection of the claimant’s proposal that the claimant was only acting for and on behalf of itself, and had nothing in writing between itself, TAQA and Apache. She suggested that the document should “set out how naïve and embryonic the proposal is”. Whilst Ms Innes responded that she had met with the claimant, TAQA and Apache and there appeared to be evidence of support between them, Ms Wyllie stated that TAQA had expressly told her that they would not support the claimant as operator of the Gryphon FPSO. The draft was edited at various times during May 2024 by both Mr Sadeghi and Ms Wyllie.

104. On 8 May 2024 Mr Payer of Total wrote a lengthy letter to Ms Innes addressing a number of issues in relation to the Gryphon FPSO. Firstly, he attached a list of interactions between the affected parties, and went on to describe the work done in relation to possible reuse and repurposing of the FPSO which had been shared with the defendant in July 2023. The marketing of the Gryphon FPSO was reiterated along with further extensive detail in respect of the selection of the approach which the Gryphon FPSO owners were taking. Mr Payer ultimately pointed out that the decision to cease production from the Gryphon and Tullich fields was for the owners of those fields to make, alongside the defendant, and that decision had been made and the end of 2024 been set as the CoP date. That led to the decision to give notice to terminate the services provided to satellite user fields. Mr Payer emphasised that the threat to future integrity issues faced by the Gryphon FPSO was a key factor as it would have been needed to be addressed through a programme of works and capital expenditure to keep the vessel safe and operational. Thus, if satellite field owners wished to continue production from the Maclure and Ballindalloch fields, the revenue from those fields would need to exceed not only the operating costs of the FPSO but also additional capital expenditure required to deal with those integrity threats. He further reinforced the emissions intensity of the Gryphon FPSO.

105. In addition on 7 May 2024 representatives of the defendant met with representatives of Total to have a meeting about the progress on decommissioning. The meeting noted that there had been no legal challenge to the proposed CoP and discussed the steps which had been taken to procure the decommissioning. On 8 May 2024 TAQA wrote to the participants in the Q9GP project indicating that they wished to reduce their final percentage interest in the development to zero per cent, and that they sought a meeting as soon as practicable to discuss and vote upon this proposal. Also on 8 May 2024 Mr Sadeghi emailed Ms Innes to brief her in relation to a call he had had with Sojitz about the Gryphon FPSO and CoP. Mr Sadeghi advised that Sojitz were aware of the claimant’s proposal and considered that Total were driven by reduction of routine flaring rather than MER or anything else. Sojitz were keen to extend the Gryphon life if at all possible but not by jeopardising the decommissioning costs. His briefing continued:

“• Sojitz sceptical about ability of Nobel to become Operator and they have sensible understanding of potential disruption of a new operator, limited ability (at the present time) and experience in Nobel, risks if catastrophic issues occur (due to Total’s run down of maintenance) and inability of Nobel to cope. I suffice it at these for brevity.

• Sojitz believe if Total were to make changes to commercial arrangement (tariff/cost share) amongst the fields who use this hub, Gryphon life could be extended.

• They were keen to hear if NSTA has made any decision because they had heard from Total that NSTA was fully supportive…. I explained my role was to give Sojitz a hearing at this instance.”

106. On 9 May 2024 Mr Payer wrote again to Ms Innes, this time in relation to the claimant’s proposals with regard to the Gryphon FPSO. He reiterated Total’s view that the claimant’s financial and technical capabilities, together with its lack of experience as an operator, meant that they did not regard the proposal to be credible. Moreover, Mr Payer pointed out that life extension of the Gryphon FPSO would require considerable future investment, as much as £10 million, and therefore would require a company with financial and technical capacity to deliver such a work programme. Total had undertaken a credit-rating report for the claimant which provided a maximum credit recommendation of £756,000 which might not be sufficient to ensure the full work programme could be contracted after taking over the control of the vessel. There would also be further risk in relation to other parts of the infrastructure and a danger of increased decommissioning costs. Total were concerned about the reputational damage to them if there were subsequently to be a major incident attributed to the transfer and continued operation of the Gryphon FPSO. Mr Payer indicated that Total’s views were shared by Sojitz, the other co-owner of the Gryphon FPSO, and concluded “there is no circumstance in which TotalEnergies would countenance a transfer of the FPSO and associated field interests to Nobel”.

107. On 9 May 2024 Mr Pogson emailed Mr Sadeghi on behalf of the claimant reiterating that whilst he understood Ms Innes’ comments at their meeting about the need to reach a commercial agreement with Total, the terms of the Strategy at paragraph 26 and the obligation to deliver MER did not in his view permit Total to refuse to engage or progress on the basis that any transaction is not economically attractive. He indicated his view that if Total “don’t engage in meaningful discussions then the NSTA will be unable to assure OPRED that alternatives to decommissioning have been properly considered and approval of any decom plan cannot be granted”. Mr Pogson had written in similar terms to Mr Parra of Total requesting a meeting.

108. On 13 May 2024 Ms Innes advised the LT in respect of her minded to decision on alternatives to decommissioning. Also on 13 May 2024 Mr Pogson emailed Ms Innes in respect of his correspondence with Total seeking engagement with them and advising that in the meantime “we continue to progress preparation with both Petrofac and Wood to be ready to make the appropriate operatorship applications”. On 14 May 2024 Mr Pogson wrote to Mr Payer restating the claimant’s proposal in relation to continued production from the Gryphon FPSO. The summary of the proposal, together with the claimant’s means of addressing concerns about significant and expected operational events was set out in the letter as follows:

“1. To allow continued economic oil production, TotalEnergies will transfer its interests in the oil phase of the Gryphon, Tullich, Maclure and Ballindalloch fields (the “Gryphon Area Fields”) to Nobel Upstream to continue oil production.

2. The effective date for the transfer will be 30th September 2024 for the consideration of one pound sterling (£1).

3. Upon economic cessation of oil production from the Gryphon Area Fields, Nobel Upstream will transfer back to TotalEnergies these interests acquired in the Gryphon Area Fields to allow production of natural gas from the subsequent Q9 gas development.

4. Each party’s share of decommissioning liability for the oil phase will remain at its current level but will obviously be deferred until economic oil production has been completed.”

109. Ms Innes was copied into this correspondence.

110. On 14 May 2024 Ms Innes had a telephone call with Mr Pogson in which she advised that she had been in contact with Total and met them. She indicated to Mr Pogson that she had fed back to Total that there were two key concerns: the lack of detail from Total and lack of engagement on the claimant’s proposal. She explained that she had sought additional information from Total which they had provided but which she had yet to fully consider. Mr Pogson reiterated that he believed that in accordance with the Strategy Total had to engage on the question of transfer. Ms Innes goes on to record other aspects of the conversation as follows:

“We went on to discuss what reasonable engagement between two parties might look like. I said that from the material I had that I could see an exchange of letters. I also speculated that very often in commercial deals the first offer was often seen as an opening position and that the ultimate position was a compromise.

Nick explained he’d had discussions with TTE on an amended proposal but acknowledged none of that was written down.

At Nick’s request I explained that I’ve seen various commercial deals with decommissioning as a key factor. Sometimes a seller will sell their interest, including the infrastructure alongside a decom “dowry”, in other cases the seller may choose to retain decom liability in some form. The decision is driven, in part, by the motivations of the seller.

Expanding from this Nick and I went on to discuss why TTE may not be interested in the Nobel proposal. I asked Nick what he thought TTE would get out of the deal. Nick went on to reiterate the remaining value and the deferral of decom spend ought to be attractive to them.”

111. On 15 May 2024 Mr Pogson wrote to Ms Innes and Mr Sadeghi addressing what he described as “the vague references that Total keep making to financial competence” in discussions about the claimant’s proposal. He attached company accounts to demonstrate the claimant’s position. Further, he alluded to the potential pre-tax cash flow for oil production prior to CoP in 2027 as amounting to at least $250 million. Also on 15 May 2024 a telephone conversation occurred between Mr Payer and Ms Innes in which Mr Payer sought guidance in relation to the timeline for the defendant concluding its assessment of alternatives to decommissioning. Ms Innes advised that the defendant was following due process and still considering the question of alternatives to decommissioning and further that there was no timeline for reaching its conclusions.

112. On 16 May 2024 Mr Payer responded on behalf of Total to Mr Pogson’s letter of 14 May. He set out that Total did not consider the transfer to the claimant to be viable for a number of reasons including the unwillingness of Total to transfer assets to another operator with no operational experience to continue to produce oil when Gryphon FPSO owners have already decided that continued production is not viable given, amongst other matters, the various integrity threats identified. Mr Payer pointed out that the Gryphon owners had been managing the Gryphon FPSO on a controlled and supervised glide path to decommissioning at the end of the year, and therefore Total was not willing to assume liability for decommissioning an asset over which it had had no operational control for a number of years. The likely further degradation of the Gryphon FPSO would, he considered, create a risk that the decommissioning scope would grow in complexity and cost. Total rejected the suggestion that the claimant enter into certain decommissioning-related contracts on the Gryphon FPSO owners’ behalf since they would have no exposure whatsoever to the costs under those contracts. Further, from a practical perspective Total did not support a transfer of operatorship to the claimant given their lack of operational experience and limited financial standing. Proposed utilisation of a third party duty holder did not affect their view. The letter concluded by observing that the claimant’s offer involves “levels of technical, financial and reputational risk that Total, is unwilling to take.” Mr Payer wrote a further letter on 16 May 2024 to Mr Pogson responding to his letter to Mr Guiziou and again re-stating Total’s rejection of Mr Pogson’s proposition.

113. Mr Pogson wrote an email to Ms Innes and Mr Sadeghi on 17 May 2024 setting out at length his refutation of the responses which he had received from Total. He reiterated his view that continued oil production was economically viable and questioning how it could have been possible for Total to claim that the defendant was supportive since March 2023. He reiterated his contention that as Total had decided not to ensure MER, the Strategy placed an obligation upon them to facilitate the claimant, Apache and TAQA to seek to maximise the value of economically recoverable petroleum by divesting themselves of the Gryphon area licences and infrastructure. He drew attention to the financial picture of the claimant presented in their latest accounts which he had previously furnished, and also to the operational experience of the claimant in other oil fields. He concluded his email in the following terms:

“Obviously I could go on in greater detail and continue to send letters back and forth with TotalEnergies but that is not going to move the situation forward. We are a financially robust, technically competent licensee willing to invest in drilling the Dunnottar well who can deliver MER for the UK, Apache and TAQA and my request of the NSTA at this point is that TotalEnergies is instructed to comply with its obligations under paragraph 26 of the OGA Strategy to engage in good faith to work out the details for how production is to continue following their exit.”

114. On 17 May 2024 Ms Innes circulated a draft of her minded to decision on alternatives to decommissioning for the Gryphon FPSO to Mr Thomas, Ms Wyllie and Mr Sadeghi. Ms Wyllie added her comments and in particular noted that she considered the paper should be strengthened in relation to the claimant’s proposal not amounting to them speaking for TAQA and Apache: she contended that there was nothing in the way of an agreement or draft agreement between those parties. She pointed out that it was not just Total that the claimant needed to achieve agreement with but also TAQA and Apache.

115. On 20 May 2024 Mr Pogson wrote to Ms Innes and Mr Sadeghi in the following terms:

“As you know I’d like to discuss the latest responses from TotalEnergies with you as soon as possible please. However, I would also like to address the point Nicolas makes about decommissioning cost risk in the attached letter. Once again this is a matter that is easily addressed if we were simply to actually get in a room together and negotiate in good faith. We would propose that TotalEnergies pays the estimated cost of the flushing, disconnect and sail away work that the market has just bid to them and we would pay any cost overrun at the point the decommissioning takes places. We would also retain any monies should this come in under budget of course. However, I’m not about to continue negotiating piecemeal by e-mail and letter. So please facilitate a serious negotiation so we can reach agreement and move this forward.”

116. It appears that on 20 May 2024 there was a meeting of the Q9GP project following which Mr Pogson wrote to Mr Sadeghi and Ms Innes as follows:

“I’d appreciate the opportunity to update you on gas project developments at the meeting today. Specifically TotalEnergies desire to “buy out” TAQA, Apache and Nobel from any future gas project. We’ll do that deal but the consideration for our equity interest in the gas project will be continued oil production until at least end 2027. I have not yet communicated this to TotalEnergies yet.”

117. On 21 May Mr Brotherton was engaged in a conversation on Teams with his colleague Mr Knight. He observed as follows:

“Brenda seemed a little frustrated yesterday, but I think this was more around the ongoing bad behaviours in that JV. Nothing changes to be fair and trust was eroded a long time ago. It seems the plan is to isolate Nobel then throw the book at them, but not sure that book is as heavy as we think. Again, a chat tomorrow.”

118. It seems that Ms Innes was nonplussed by what Mr Pogson was referring to in his email of 20 May 2024 in respect of the gas project developments. She enquired of Ms Wyllie as to what this referred to and Ms Wyllie responded in the following terms:

“There was a Quad 9 meeting on Monday but in essence there is a transaction whereby TAQA will recoup past cost in exchange for going to 0% interest in the gas project. It is not new information that Total are willing to enter into a transaction, they have said this many times over the years. TAQA have now moved to enter into a transaction.

The deal Nobel set out below will most likely not be palatable to TEPUK. It is another embryonic and ill thought through plan from Nobel.

Apache is likely to follow TAQA’s deal, so Nobel will be alone in blocking movement on Quad 9.”

119. On 23 May 2024 Mr Pogson wrote again on behalf of the claimant to Ms Innes reiterating the claimant’s proposal to continue oil production using the Gryphon FPSO. He reiterated the financial and technical competence of the claimant, drawing attention to the expertise of their directors. Mr Pogson also explained his view that whilst there was a repeated reference to the vulnerability of the Gryphon FPSO, it was not unique in respect of its age and this issue could be addressed by the execution of appropriate maintenance regimes. On 29 May 2024 Ms Innes wrote to representatives of all of the partners in the Gryphon field noting that there were differing views between some of the licensees in the tie back fields and the Gryphon FPSO operator. The defendant had therefore decided to provide an opportunity for both sides to have a “sensible discussion” and she offered to facilitate a meeting on 6 June 2024 at the defendant’s offices in Aberdeen.

120. It seems that in parallel to this on 28 May 2024 Mr Knight had had a telephone conversation with Mr Pogson in which amongst other matters Mr Pogson explained the claimant’s position that it was willing to do an exit deal in relation to the gas project but only on condition that the claimant could continue to operate the Gryphon FPSO. Mr Knight recorded, in an email to Ms Wyllie, Mr Brotherton and Mr Sadeghi advising them of the conversation, that he had told Mr Pogson that a transfer of operatorship “is really hard up against it before the end of 2024 planned CoP”. He also indicated to Mr Pogson that Total would not support that transfer for previously discussed reasons. Mr Knight indicated that if all other participants exited then that would be satisfactory but if the claimant were the only remaining participant “then we would need to move fast to try and convince [Total] to plough on anyway”. Mr Sadeghi responded observing that in his view “Nobel in their present form, do not have the technical capability of managing say a Petrofac duty holder contract for Gryphon.” He said that he had already advised Mr Pogson of that. He noted that in theory if the claimant had the appropriate staff in place and applied for operatorship and demonstrated competence, which he described as a “big leap”, then that would be evaluated on its merits. He however noted that the claimant had made several approaches to Total to buy the FPSO, use it and return it, all of which had failed to get traction with Total.

121. An agenda for the meeting on 6 June 2024 was circulated by Ms Innes on 3 June 2024. Also on 3 June 2024 Mr Pogson had emailed Ms Innes in the following terms:

“In preparation for our meeting this Thursday I wanted to make it clear that I will come to that meeting with a mandate to negotiate with TotalEnergies to deliver a solution under paragraph 26 of the OGA Strategy to allow those parties in the Gryphon area that wish to continue economic oil production well beyond end-2024. To the extent that you are able I’d be grateful if you would set that same expectation with TotalEnergies that they should come with a mandate to negotiate a solution consistent with paragraph 26 to allow oil production to continue.”

122. On 4 June 2024 Mr Knight chased Mr Pogson about the progress of discussions with Total in relation to the Q9GP project. Mr Pogson responded by saying that he would see Mr Parra on 6 June 2024 and make enquiries. Mr Knight responded by asking why the claimant and Total had not “got round the table yet for discussion”, to which Mr Pogson replied that neither of them had contacted the other in relation to that subject.

123. It appears from Teams messages between Mr Sadeghi and Mr Adam Bradley at the defendant that Ms Wyllie had, in another meeting, queried the substance of the meeting which Ms Innes had convened for that afternoon. Mr Sadeghi explained to Ms Wyllie in a follow-up email that the meeting was a Decommission and Supply Chain directorate-led meeting concerning Gryphon FPSO decommissioning or reuse and not a Q9GP meeting although, as he put it, it involved “the same cast of characters”. Ms Wyllie thanked Mr Sadeghi for the update and alluded to her involvement in the draft decision about which she had not heard much after her contribution had been made. She indicated that she would now engage with the Maclure and Ballindalloch owners to get them “to put in place a mechanism to step aside from the Quad 9 gas project to allow the Phase B to begin” by means of a managing director level meeting in the near future.

124. A note of the meeting of 6 June 2024 was prepared after it had concluded. Total are recorded as setting out the rationale for the decision to proceed to CoP at the end of 2024 on the basis that has already been recorded in correspondence set out above. Similarly, for reasons explained in correspondence which has already been rehearsed, the claimant resisted Total’s position and reinforced that if a licensee was not seeking MER then, in accordance with the Strategy, they should be required to allow others to do so. Apache expressed the view that Total had not provided sufficient background to their justification to enable them to do due diligence on the decision. TAQA took a similar stance and indicated their belief that the Gryphon FPSO could continue to 2027: there were mechanisms whereby contractual arrangements could be renegotiated to assist the Gryphon FPSO’s economics. With reference to the claimant’s proposal to operate the Gryphon FPSO, TAQA noted that there would need to be a transaction between Total and the claimant which would require willing parties to make it a possibility. Sojitz were recorded as saying that they fully supported Total’s decision.

125. The summary of the outcome of the meeting was set out in the following terms:

“5. Summary of positions and next steps

5.1 Total confirmed that they will not continue with the FPSO.

5.2 All agreed Total [Gryphon owners] had met their contractual obligations in terms of TPA providing notice termination in a timely fashion.

5.3 Nobel had made an offer for the FPSO, but Total had not substantially engaged with the offer. However, in this meeting Total reiterated not seeing Noble proposal a suitable proposition and unwilling to enter into any negotiations.

5.4 The shipper field licensees (Taqa, Apache, Noble) were still looking for a more detailed rationale for CoP.

5.5 The NSTA confirmed that Total had met their obligations under the FDP and licence.

5.6 On decommissioning, it was pointed out that, in line with the Petroleum Act 1998, the NSTA must be consulted on alternatives to decommissioning and the possible reductions in decommissioning costs.”

126. On the evening of the meeting Mr Pogson emailed Ms Innes and Mr Sadeghi setting out first of all that “I want to thank you for organising the discussion and managing it so that we can each put our points of view”. He reiterated the failure of Total to engage with the claimant to provide the opportunity to continue with production so as not to shut in much remaining value. He further reiterated the arguments which he had previously made in respect of paragraph 26 of the Strategy requiring Total to engage and facilitate continued production. He believed that a deal could be structured which gave both Total and Sojitz a high degree of certainty over the decommissioning costs and that the claimant had demonstrated financial and operational capability to enable this to be agreed. At around the same time after the meeting on 6 June 2024 Ms Innes emailed the representatives of Total at the meeting as “I wanted to check if there’s anything that was heard at today’s meeting that has made [Total] reconsider its position in relation to the Gryphon FPSO, or whether I continue to work on the basis that your preferred pathway remains decommissioning?” In response, Mr Payer confirmed that Total’s position remained the same and their preferred pathway remained to decommission the Gryphon FPSO in 2025.

127. As a result of this exchange, shortly after Mr Payer’s email Ms Innes provided Mr Payer with a letter in respect of the requirements of section 29(2A) of the 1998 Act. The material content of that letter was as follows:

“The NSTA is satisfied that TEPUK has fulfilled its obligations under section 29(2A) of the Act, and under paragraph 15 of OGA Strategy, on the general basis that:

• TEPUK has demonstrated it has assessed viable alternatives to decommissioning including:

◦ Re-purposing – using the same infrastructure, in the same location for a non-oil and gas purpose. TEPUK reviewed options using the NSTA repurposing screening tool, concluding there are no repurposing opportunities,

◦ Re-use – using the existing infrastructure elsewhere for oil and gas purposes. TEPUK has attempted to market the FPSO but failed to attract an offer,

◦ Continued use – continuing to use the infrastructure, for the same purpose in the same location. TEPUK has considered but declined an offer from Nobel Oil E&P North Sea Limited (Nobel) on the basis of unacceptable risk including, reputational risk from transferring to an operator with no experience, liability for decommissioning remaining with TEPUK but the asset not being in TEPUK control and concern over the technical capability of Nobel.

• TEPUK has outlined a decommissioning strategy where work is staggered but progressed in parallel demonstrating the programme is being framed so the cost of carrying it out is kept to the minimum that is reasonably practicable. TEPUK is also progressing its contracting and delivery strategy, including the development of a Supply Chain Action Plan in accordance with the NSTA’s Stewardship Expectations (Asset Stewardship Expectations (nstauthority.co.uk)).”

128. The following day, Ms Innes advised OPRED of the decision which they had reached in respect of section 29(2A) of the 1998 Act. She also emailed Ms Wyllie and Mr Wheeler to let them know that she had advised Total the previous day that the defendant had concluded its engagement with them in relation to the obligations under section 29(2A) of the 1998 Act. Her email went on to make the observation that the engagement with Total on the topic raised questions in her mind as to how Total and others with an interest in the Gryphon field had collaborated, and she suggested that there should be a review to assess how Total were performing in the sense of their collaboration with other partners. Ms Innes indicated that she accepted the experiences with Gryphon “were not solely the responsibility of Total” but nonetheless she was not convinced that their approach fitted the spirit of the Strategy or the defendant’s stewardship expectations for decommissioning. Within the email she thanked Ms Wyllie for reviewing the draft minded to decision but stated that “however, following legal advice I took a different approach which ultimately didn’t involve seeking comments from LT”. She nonetheless thanked Ms Wyllie for her support and advice.

129. On 10 June 2024 Mr Pogson wrote to Mr Sadeghi asking to speak to him on the basis that he had learnt that shortly after the meeting on 6 June 2024 the defendant had informed Total that they supported Total’s decommissioning plan. He sought to understand what exactly, if anything, had been provided by the defendant and the rationale for any approval that may have been given. He stated that as a licensee in the area he expected that the defendant would have informed the claimant in writing of any decision. Mr Sadeghi responded by email stating that since the claimant was not part of the Gryphon licence he could not discuss anything pertaining to that licence with him. He suggested that he approached Total directly. Mr Pogson responded that the meeting had included all of the licensees and the discussion was in relation to CoP of all the fields including satellite field infrastructure. He could not understand why the conclusions of that meeting could not be shared.

130. On 12 June 2024 Mr Pogson wrote to Mr Tim Eggar at the defendant indicating that the claimant was instructing its legal advisers to prepare a case seeking judicial review of the decision taken by the defendant and proposing a meeting between Mr Eggar and Mr Bates. On the same date Mr Bates wrote to Ms Innes expressing his “surprise, disappointment and immense frustration” that the claimant had learnt that the defendant had informed Total that it had fulfilled its obligations under section 29(2A) of the 1998 Act. He sought confirmation in relation to whether the defendant had concluded consideration required by section 29(2B) and what decisions the defendant had reached together with the reasons for those decisions. Separately, Mr Bates alleged that if the defendant had communicated its decision to Total on 6 June 2024, it would appear that the representatives of the defendant were at best acting disingenuously and at worst behaving in bad faith.

131. On 13 June 2024 Mr Pogson contacted Ms Ledingham at OPRED seeking a meeting for himself and his CEO with her. She explained that this would not be possible until after the general election which was then ongoing. In response on 18 June 2024 Mr Pogson requested information in respect of the defendant’s assessment of the alternatives to decommissioning and whether or not its advice was that decommissioning was MER compliant. Ms Ledingham responded advising that the defendant had confirmed that they were satisfied that the operator had fulfilled its obligations under section 29(2A) of the 1998 Act. Also on 18 June 2024 Mr Bates chased a reply to his letter of 12 June and was dissatisfied when Ms Innes indicated that she would not be able to respond immediately. Mr Bates, in a follow-up email, indicated that he proposed to send a joint presentation by the claimant and Petrofac to illustrate the viability of their proposal. He reiterated his threat of potential legal action against the defendant.

132. On 19 June 2024 Mr Pogson asked Ms Ledingham for a copy of the advice which had been received by OPRED from the defendant. On 24 June 2024 Mr Pogson sent Ms Innes and Mr Sadeghi a joint presentation and letter of support from the claimant and Petrofac including a letter from Petrofac dated 21 June 2024 confirming their intent to support and collaborate with the claimant in relation to the operation of the Gryphon FPSO. On 25 June 2024 there was a further meeting of the PDC in relation to the Q9GP project. On the agenda was an update from Apache and the claimant. Apache confirmed that like TAQA they were prepared to pursue a route to exit from the project based on past costs. Mr Pogson advised that the claimant would be happy to exit only on the basis of past costs but contingent upon something else happening, which Mr Pogson clarified was a contingency in relation to oil, in particular, Gryphon oil. The minutes indicate that it was related to a proposal that had been communicated to Total on 24 June and indicated that no timeline could be given at that time. The meeting went on to discuss the potential preparation of an asset purchase agreement for the purpose of progressing the project.

133. On 26 June 2024 Ms Ledingham on behalf of OPRED responded to Mr Pogson’s inquiries about the defendant’s assessment and indicated to him that any questions about the defendant’s assessment should be directed to the defendant. She also advised that the only decommissioning plan work that had been paused during the pre-election period were public consultations and decisions to approve or reject the plan. On 4 July 2024 OPRED wrote to Total sending them Schedule II to the notices which had already been provided in relation to the installations and pipelines in the Gryphon field, setting out in the Schedule the persons with whom Total were required to carry out consultations prior to the submission of their decommissioning programme. The persons to be consulted were Sojitz, Total and Rock Rose and the organisations to be consulted were organisations concerned with fishing and Global Marine Systems Limited.

134. On 8 July 2024 a meeting occurred between OPRED and Total at which Total made a presentation in relation to the Gryphon FPSO. This presentation emphasised that the first phase of the project was time critical, and that production would cease at the end of 2024. The presentation went on to address decommissioning of the remainder of the infrastructure and pipelines as well as the assessment of the environmental impacts which would occur, along with a description of the contracts which were being placed for the decommissioning process. The representatives of OPRED were recorded in the notes of the meeting as understanding that one of the partners of the tie back fields was not in agreement with Gryphon FPSO decommissioning and that they may raise concerns and objections. The representative “went on to state that OPRED are confident due process has been followed” but wish to make Total aware that this could lead to delays in issuing a decision.

135. On 2 July 2024 Mr Knight on behalf of the defendant contacted Mr Pogson to ask for a discussion on the Q9GP project and a sole risk provision. Mr Pogson replied indicating that it was premature to be discussing sole risk provisions for the Q9GP project and setting out again the proposals that the claimant had made and which he contended that Total had rejected without any substantive engagement. Mr Pogson continued by setting out his contention that ever since the announcement on 2 March 2023 by Total the claimant had maintained that their proposals could not be MER compliant, and that the defendant had failed to properly answer the inquiry raised of Mr Wheeler on 9 March 2023 as to how Total’s proposals could be MER compliant. In the circumstances therefore the claimant was not willing to enter into discussions about sole risk provisions for the project. Mr Pogson pointed out that the claimant’s proposal was supported by TAQA and Apache.

136. Mr Knight sought clarification on 8 July 2024 that Mr Pogson was referring to Apache and TAQA supporting a proposal to exit the project under an SPA. He went on to observe as follows:

“We did cover the CoP piece in the meeting you and I had with Brenda some weeks/months ago. We confirmed the NSTA does not request or review a formal CoP document anymore as we did some years ago. Instead, NSTA is a consultee to OPRED’s Decommissioning Programme requirement of operators. Our direct engagement with operators is through discussion around stewardship expectations.

To try and give some response to your query below it is my opinion (not guidance or policy) that the NSTA’s asset stewardship approach (Stewardship Expectations) with operators/hubs serves the OGA Strategy and supports the Central Obligation of MER and in doing so take appropriate steps to assist the Secretary of State in meeting the net zero target. The OGA Strategy covers all the basis and makes clear that maximum volume (barrels) is not the only consideration. There is asset integrity to consider and I believe that has been a factor in the CoP timing of Gryphon. HSE will of course have far more insight into this than us and it is my assumption that they too are consultees into the Decommissioning Programme review process.

From the NSTA guidance on decommissioning strategy you can see that MER UK is very much focussed on cost effective decommissioning (see below).

The above is not a response to the Nobel email/letter you reference sent to Tom Wheeler but just my view and one which I’m sharing to try and understand the Nobel perspective, especially given the advanced nature of the Gryphon engagement with OPRED on the decommissioning programme and planned CoP date for end of 2024. Brenda and I have made it very clear to Q9 gas participants the potential risk to petroleum licences with zero production. You make it clear that Total Energies have not supported the Nobel proposal regarding transfer of Gryphon operatorship but neither has Nobel presented to NSTA anything (to my knowledge) on this proposal either. In that same meeting referenced above with Brenda I emphasised how lengthy the transfer of operatorship process can be just form an NSTA transaction approvals aspect (I have been a consultee for NSTA Ops a few times) and yet we are still no further advanced but closer still to the planned CoP date.

It is my view that by linking the Q9 Gas SPA with a deal on Gryphon operatorship there will not be a successful SPA (“All for one and one for all” as you said in one of the meetings) for the Quad 9 gas project as the operatorship piece is separate and appears to have no traction/support. I would urge Nobel to give the side letter from Total Energies on sole risk provision consideration so that the Quad 9 gas project can still progress (or invest of course) and Nobel has the opportunity to come back in if it wishes (Total Energies appeared comfortable with a X1 multiplier in the last Q9 special meeting held).”

137. Mr Pogson replied to Mr Knight setting out that he was referring to Apache and TAQA supporting the claimant’s proposal to continue economic oil production well beyond the end of 2024. He complained that when the claimant had asked for written justification of the defendant’s support for CoP being MER compliant, including an economic analysis, nothing had been forthcoming and nor had Total been able to produce this analysis. The claimant was the only person to have produced an economic analysis which showed that oil production was economic until at least the end of 2027. He went on to reiterate that there was nothing unusual about the integrity of the Gryphon FPSO as distinct from any other 30-year-old asset in the UKCS. He pointed out that the defendant’s responsibilities with respect to MER compliance arose earlier in the regulatory process prior to OPRED considering a decommissioning programme. He reiterated the claimant’s proposals to employ a duty holder in the form of Petrofac and again reiterated his contention that discussion of a sole risk agreement for the Q9GP project was inappropriately premature.

138. On 9 July Mr Knight forwarded these emails to Ms Wyllie, Mr Brotherton and Mr Sadeghi confirming that Ms Reid at Total had confirmed that on another call she had with Mr Pogson that the claimant was “not budging an inch now on the disagreement on CoP timing/transfer of operatorship”, whilst referring to the letter the claimant wrote to Mr Wheeler sometime previously which had not been replied to. Mr Knight noted that it would be necessary to approach the matter now from a Disputes and Sanctions angle and that they were moving towards an approach on the Q9GP project which would involve having licences back after zero production for the relevant period, but “this is not helping our security of supply dilemma (gas shortages late 20s)”. Mr Sadeghi responded:

“Thank you for the below. I agree that Tom could respond to licensee letter in a timely fashion (whatever content he sees fit).

NOBLE is the only party pushing the continuation of production subject. Others like Taqa and Apache remain sitting spectators.

Happy to discuss tactics going forward amongst us and suggest a f2f.”

139. Mr Brotherton then responded in the following terms:

“Wow, this certainly seems to be hard work and I applaud your ongoing efforts and patience.

Do we have a good feeling for the carbon story from now until late 2024 (COP) and from now until late 2027.

It would be good to understand the total story wrt. production, total carbon and carbon intensity.

You certainly allude to the need to consider both MER and NZ, although Nobel conveniently anchor to just MER.

I suspect these relatively small late life volumes come at a significant carbon price (CI).

Our story is not just one of MER, but MER and NZ.

However, also cognisant we now have a live legal angle to this so thus our need to stay aligned.”

140. On 15 July 2024 Ms McKenzie shared an analysis of the Gryphon field with extended production and opex profiles to assist in the assessment of the appropriate time for CoP. Mr Knight responded to her work on 16 July identifying “it’s only Gryphon as hosts that is not MPV positive under the mid case scenario” and going on to observe that as a result if the Gryphon FPSO were to continue past 2024 then the POSA between it and adjacent fields would need to be renegotiated.

141. On 16 July 2024 Ms Innes replied to Mr Bates’ letter of 12 June 2024 and, having set out the various meetings which had occurred in relation to the issues and the position taken in the discussions by the claimant, Ms Innes addressed the specific questions raised by Mr Bates in the following terms:

“With regard to the three specific questions in your letter; in summary, your letter asks whether the NSTA has concluded its consideration of the proposed abandonment as required under s29(2B) of the Petroleum Act 1998, and if so what decisions if any were reached and the reasons for those decisions.

In Nobel’s capacity as a licensee in the Maclure and Ballindalloch fields, I can respond to your questions as they relate to the fields’ associated pipelines and infrastructure, including wells. The NSTA has written to TEPUK in its capacity as operator, confirming its view that the NSTA is satisfied that TEPUK has fulfilled its obligations under section 29(2A) of the Act, and under paragraph 15 of OGA Strategy.

In expressing this view, the NSTA considers that TEPUK has demonstrated it has assessed viable alternatives to decommissioning including for re-purposing, re-use or sale and continued use – where no appropriate opportunities were identified.

On continued use, the NSTA noted that Gryphon FPSO owners plan to cease production on 31 December 2024 ending production for Maclure and Ballindalloch unless an alternative export route can be found. TEPUK has rejected an offer from Nobel to buy the FPSO and there is currently no alternative evacuation route for the tie-backs.

Further, as TEPUK has outlined a decommissioning strategy where work is staggered but progressed in parallel demonstrating how the programme is being framed, the NSTA is satisfied that TEPUK is planning to ensure the cost of carrying it out is kept to the minimum that is reasonably practicable.

In accordance with the decommissioning glidepath set out in Stewardship Expectation 10 - Cost-Effective Decommissioning, the NSTA is engaging with TEPUK on its proposals to decommission the relevant infrastructure, including well plugging and abandonment. This includes an expectation that TEPUK acting as operator, will engage with tie-back fields owners on how decommissioning related activities impact their pipelines and infrastructure.

Therefore, for the purposes of sections 29 (2A) and (2B) of the Act, and the requirement that a person submitting an abandonment programme must first consult with the NSTA, and that the NSTA must consider and advise, the NSTA considers that this has been done. Of course, it is for the Secretary of State as set out in section 32 of the Act to either approve or reject the abandonment programme.”

142. On 20 July 2024 Ms Wyllie emailed Mr Hollis requesting advice in relation to potential enforcement action. She commenced the email by noting that in Mr Pogson’s email of 9 July 2024 the claimant had requested that the defendant instruct Total to step aside so that the claimant, Apache and TAQA could maximise the economic recovery of oil consistent with the Strategy. Ms Wyllie noted that the request came after many meetings where TAQA and Apache had set out their intent to exit the Q9GP project and Total had stated they required all parties to exit, otherwise Nobel at 0.88 per cent of the project continued to hold a blocking vote. Her email continued:

“It appears to me that TAQA and Apache have set a fair market value, which they are both willing to accept, to exit the Q9 Gas Project. Nobel on the other hand are suggesting that in order to exit the Q9 Gas Project they require the continued operation of the Gryphon FPSO. It is my view that this may be counter to para 29 (b) of the OGA Strategy.

There are many other elements in Nobels email below that could be drawn out:

1. There is no commercial relationship specifically between TAQA, Apache and Nobel which would describe how this new JV would operate the Gryphon FPSO. No Heads of Terms have been exchanged between the parties.

2. No Open Book Economics has been shared between the participants exploring a business case to support this new JV’s approach.

3. Nobel’s current company structure, as we understand it, would fall short in many aspects of gaining Production Operatorship, in order to operate the Gryphon FPSO.

4. There are significant integrity issues with the Gryphon FPSO:https://www.energyvoice.com/oilandgas/north-sea/419754/hse-slams-totalenergies-over-fire-and-explosion-risk-on-gryphon-fpso/

These points are important as they help to set the scene that Nobel’s suggestion of taking operatorship and appointing Petrofrac is embryonic in nature and has not been supported by TAQA and Apache entering into any commercial agreements on this proposal. Indeed TAQA have stated to me that Nobel are not representing them.

I would appreciate it if D&S could look into this matter. The usual next step would be for Operations to send an Enhanced Facilitation letter to Nobel seeking them to set out their position. Nobel have already, in many forums with the NSTA, set out their position. Nobel not exiting the Q9 Gas Project is holding up transaction that would see Totalenergies stand up a project team and continue into Phase B of Concept Select (in short this means they would continue to establish if they have an economic project). The transaction has momentum, and Nobel are holding it up when a fair market value is in play.”

143. On 24 July 2024 Mr Hollis responded indicating that he was currently finalising a recommendation to open an investigation and passing Ms Wyllie and Mr Knight a document in respect of that decision for them to check.

144. On 25 July 2024 Mr Knight responded to Mr Pogson thanking him for clarifying that Apache and TAQA were supportive of continued oil field operation but not necessarily a change of installation operator. Mr Knight pointed out that in respect of Gryphon satellite fields, the defendant’s stewardship engagement is always direct with the field operator who represents the interests of the other joint venturers. So far as the integrity issues were concerned in relation to the Gryphon FPSO, those were not within the defendant’s remit as the HSE made that assessment, although Mr Knight pointed out that the evidence suggested there was an increasing maintenance backlog building up on the Gryphon FPSO. His email continued as follows:

“On the topic of whether Gryphon CoP is MER compliant I revert to Pauline Innes’ 16 July 2024 letter stating:

“NSTA is satisfied that TEPUK has fulfilled its obligations under section 29(2A) of the Act, and under paragraph 15 of OGA Strategy.

In expressing this view, the NSTA considers that TEPUK has demonstrated it has assessed viable alternatives to decommissioning including for re-purposing, re-use or sale and continued use – where no appropriate opportunities were identified.”

Paragraph 15 of OGA Strategy states “all viable options for that infrastructure’s continued use”… “have been suitably explored”. From an asset stewardship perspective this would include assessment of whether the development has delivered against the FDP expectations and has various touch points in the OGA Strategy.

Regarding correspondence with Tom Wheeler, I do not have sight of the 9th March 2023 letter from Nobel but I have seen the December letter, which Pauline Innes responded to on Tom’s behalf.

Pauline Innes responded 8th December 2023 to Nobel letter to Tom Wheeler dated 30th 2023 November which included the following statement:

“NSTA uses asset stewardship throughout the life of a field to optimise efficiency and ensure economic recovery, enabling the principal objective of maximising the economic recovery of UK petroleum to be met. The obligations in the OGA Strategy enables that objective to be met. We also hold licensees to account for delivering their licence obligations and meeting our published stewardship expectations.””

145. On 29 July 2024 Total issued a consultation draft version of the Gryphon FPSO decommissioning programme. On 1 August 2024 Mr Hollis presented to Ms Oxley his paper recommending opening an investigation in respect of the claimant for breaches of the Strategy. Ms Oxley agreed with the recommendation together with the need to progress the matter at pace on 2 August 2024. On the same date the claimant’s solicitors sent a letter before claim to the defendant in relation to the section 29 advice. Also on 2 August 2024 Ms Thomson of OPRED confirmed that, having received Total’s decommissioning programme, they were content for it to be the subject of public consultation commencing on 6 August 2024. On 5 August 2024, however, the consultation was delayed as a result of the receipt by OPRED of the letter before claim issued by the claimant’s solicitors. On 7 August 2024 the defendant wrote to Mr Pogson advising him of their decision to open an investigation into the claimant for the potential breach of the Strategy. The purpose of the investigation was to consider whether the claimant had acted in accordance with the Strategy by demanding the compensation for which it was to exit the Q9GP project, and how it had collaborated or cooperated with other licensees in the promotion of the project. A request for information was contained within the letter.

146. Discussions continued in relation to the decommissioning programme for the Gryphon FPSO between Total and the defendant as well as Total and OPRED. On 27 August 2024 Mr Pogson responded to Mr Hollis in relation to the opening of the investigation disputing that the action of the defendant was justifiable. It appears that on 29 August 2024 there was a meeting between the defendant and representatives of Total to discuss the draft decommissioning programme for the Gryphon FPSO. Also on 29 August 2024 the FPSO decommissioning programme was put out for a consultation period of 30 days between 30 August 2024 and 30 September 2024. Mr Pogson was provided with this information and also a statement regarding pipeline flushing, cleaning and isolation or disconnection as part of the decommissioning strategy. Ms Claire Hepworth, a Decommissioning Stewardship Engineer at the defendant, was appointed to the role of Lead Reviewer on their behalf. She was responsible for collating the information and forming the section 32 advice which the defendant subsequently submitted to OPRED. Ms Hepworth had prior to this been involved in discussions both internally and with Total in relation to their decommissioning proposals. On 2 September 2024, having been provided with the Decommissioning Programme by OPRED for the purposes of consulting with the defendant Ms Hepworth sought further cost information associated with the Programme’s proposals.

147. On 25 September 2024 in response to an email from the defendant, OPRED extended the consultation period on the decommissioning programme to 20 October 2024. This internal consultation within the defendant continued, in particular led by Ms Claire Hepworth of the decommissioning team who was taking up the task of preparing the section 32 advice. Further enquiries were being pursued and considered in relation to alternatives and cost minimisation. On 9 October 2024 Ms Hepworth contacted Ms Wyllie as part of her review of the Gryphon FPSO decommissioning programme. She posed a sequence of questions to Ms Wyllie as follows:

“I have received some up-to-date information from Ian on the question of repurposing (CCS / Hydrogen), but in order for me to give a full response to the DP in consideration of alternative to decommissioning, can you (or someone in your team) please respond to the following questions:

2. In considering the alternatives to decommissioning, does the NSTA consider that the decision to CoP the FPSO is consistent with the Central Obligation?

3. In particular, in considering the alternatives to decommissioning, does the NSTA consider that the decision to CoP the FPSO is consistent with paragraphs 10 – 12, and 26 – 30 of the Strategy?

4. Does the NSTA consider that Nobel’s proposal, set out in its letters of 26 February 2024 and 14 May 2024 (attached) directly to Total and subsequent correspondence, to continue to use the FPSO is feasible, taking into account commercial, financial, operational, technical and any other relevant factors or not?

5. Does the NSTA consider that Nobel’s proposal to continue to use the FPSO is consistent with the Central Obligation?”

148. These questions initiated a number of internal enquiries leading to the need for a further delay in the defendant responding to OPRED’s consultation on the decommissioning plan. In particular, on 17 October 2024 the defendant wrote to Total, the claimant, Sojitz, TAQA and Apache confirming that it was their intention to consult with them all prior to submitting the advice pursuant to section 32 of the 1998 Act to OPRED. In the meantime, in order to inform the defendant’s consideration of these matters, further information was sought in schedule A to the letter from the claimant and in schedule B from Total. The material in schedule A related to the claimant’s proposal to assume Total’s interest in the licence for the Gryphon area and operate the Gryphon FPSO by contracting a duty holder. The information in schedule B was in respect of whether or not there might be a different outcome to a marketing exercise in respect of the Gryphon FPSO. Total contended that schedule B should not be disclosed to the other owners as it was a matter only for the owners of the Gryphon FPSO, namely Total and Sojitz. Ms Wyllie sought clarity as to why Total considered that schedule B was confidential. Total responded that the existence of the market review was highly sensitive confidential information, the disclosure of which could be financially damaging to the owners of the Gryphon FPSO. In any event, Total submitted that any answer to schedule B would be highly likely to be confidential as a result of commercial sensitivity or contractual confidentiality and therefore there was no reason to circulate a question, the answer to which would not or ought not to be disclosed to other parties. Ultimately, however, on 21 October 2024 a note was provided in strict confidence to the defendant setting out an answer to the question posed under schedule B.

149. On 18 October 2024 Ms Wyllie contacted Mr Knight for assistance in dealing with the questions which had been raised with her. She asked for him to compile a brief dossier of meetings in which the claimant had set out that their main aim was to continue to produce oil from the Maclure and Ballindalloch fields via the Gryphon FPSO. Her request continued as follows:

“I suspect that the proposal to purchase the Gryphon FPSO which has no substance nor support is a stalling tactic to push Total to continue production. What evidence can we rely on that this is in fact true? I know you will be keen to review emails following annual leave, but this is an urgent request and if you could possibly dedicate time on Monday I would really appreciate it.”

150. On 21 October 2024 Sojitz confirmed information that they had provided a few days earlier that they had not received and were unaware of a heads of terms proposal from the claimant to Total, nor had they received any offer from the claimant to acquire their interest in the Gryphon field. They were unaware of how any future relationship between themselves and the claimant might work and that as they had said previously they were extremely concerned about the financial, safety and technical risk of remaining a participant in the Gryphon field if Total were to sell their interest to the claimant.

151. On 22 October 2024 Total agreed a form of words which could be disclosed to others in relation to the content of schedule B. This was circulated to the parties on 23 October 2024.

152. On 23 October 2024 Mr Pogson responded to the defendant’s letter of 17 October 2024 on behalf of the claimant. He again stressed that no economic analysis had been shared with the claimant in relation to Total’s decision to cease production and decommission the Gryphon FPSO. As had been previously stated, the claimant provided economic analysis to demonstrate the continued viability of oil production. Mr Pogson set out the claimant’s view that if the Gryphon area licensees did not wish to continue production, they should divest and allow their licences to be used by others to maximise economic recovery. Mr Pogson again set out the terms of their proposal to allow continued economic production. The terms required Total to transfer its interests in the oil phase of the fields served by the Gryphon FPSO from 31 December 2024. Upon economic cessation of oil production, the claimant would transfer back the interests in the fields served by the Gryphon FPSO to allow future development of the Q9GP project. Each party’s share of decommissioning liability for the oil phase would remain at its current level but be deferred until the economic oil production had ceased. The claimant would contract with Petrofac to be the operator of the fields served by the Gryphon FPSO as well as the Gryphon FPSO itself. Petrofac would assume the roles of pipeline operator, well operator and installation operator, and the claimant would take the role of licence operator. Deploying Petrofac’s expertise, the claimant would assume management of the decommissioning work as described in the decommissioning programme. The letter continued to set out the new agreements that were necessary to deliver the proposal and explained that the transition planning which was required would take six to nine months from the signature of a SPA. Further detail was provided of the financial wherewithal of the claimant.

153. On 24 October 2024 Ms Wyllie provided a document to Ms Hepworth answering the questions which had been raised with her and attaching correspondence to illustrate the observations which she made.

154. In response to this document, on 29 October 2024, Ms Hepworth raised some further questions. The questions, and the responses to them, were as follows:

“On production figures, in the email of 23 May ‘23 from Stewart Brotherton that was included in the attachments (attached), Stewart sets out that Ops considered the production delta between COP dates 2024 (new, earliest) and 2027 (original) to be ~3-3.5 MMbbls gross. To check, is that still Ops view and is that the figure for Gryphon plus satellite fields? [response] This was a high level view at the time of the email of 23 May 2023 and the data has not been reviewed or updated since that time as there has been no requirement to do so. The observations made are in the context of Gryphon as a hub and include tie-back fields.

If that is the case, have we expressed a view of the materiality (or otherwise) of the recoverable volumes remaining and that would not be recovered if the decommissioning proposals are implemented:

• as a proportion of the recovered volumes to date; or

• as a proportion of projected production for the whole UKCS over the (2024-27) period?

[response] The relative immateriality of the remaining recoverable Gryphon hub resources is implied from the email of 23 May 2023 through illustration of the Gryphon hub remaining resource being <10 million barrels, which is at the very low end of the scale in comparison with other NNS and WoS assets. For example, many of the longer life NNS and WOS assets typically have a remaining recoverable resource range significantly larger than 10 million barrels, with several assets in the 100s of million barrels range and one asset with potentially ~1 billion barrels recoverable resource remaining.”

155. On 30 October 2024 Mr Anthony Moulds, the defendant’s Head of Economics, circulated economic modelling to examine appropriate estimates of CoP dates using inputs which had been derived from operator data, along with the defendant’s standard assumptions and other variables, for instance in relation to carbon cost assumptions. On 31 October 2024 further analysis in relation to the Gryphon fields and CoP were sent to Ms Wyllie. Additionally, Mr Will, a Senior Reservoir Engineer with the defendant, sent Ms Wyllie a collection of files in relation to the various fields which he had prepared in July 2024 for the purpose of checking CoP in the Gryphon fields. In Teams messages from 31 October 2024 Ms Wyllie explained that she had worked with Mr Moulds to review the economic analysis which had previously been provided to her team and had clarified that the standard economic templates (“SET”) had been provided using previous UKSS entries, and that the opex split was as per previous years and not run on a cost share basis. The SETs did not include additional opex for the integrity issues and used typical up time assumptions. She went on to note that the “analysis provided was indicative and a sense check to understand CoP timings, given the very low materiality of the remaining reserves a highly detailed check was not completed”. She further noted that the assessment broadly indicated that the Gryphon owners were not making any positive returns on the operation but that the satellite fields had a different result as their proportion of opex was very low and not proportionate to their throughput.

156. Ms Wyllie and Mr Moulds engaged with other colleagues to try to understand where the opex data used in the analysis had come from. Ms Wyllie’s concern was that on her understanding of the analysis, the claimant, TAQA and Apache made money, but Total did not. On 1 November 2024 Ms Wyllie emailed Mr Desindes of Total explaining that the defendant was considering its response to OPRED pursuant to section 32(7) of the 1998 Act. In that connection, she was seeking from Total documents in relation to the information used in deciding that not to continue use of the FPSO beyond the end of 2024 was aligned with the central obligation of the Strategy, as well as economic summary materials setting out the case for the Gryphon FPSO CoP. In a further email on 6 November 2024 Ms Wyllie sought additional information from Total bearing upon the issues associated with the Gryphon FPSO.

157. On 8 November 2024 Total provided a confidential note to the defendant responding to the questions raised by Ms Wyllie. In summary, the note recorded that previous economic analysis provided to the defendant (supplied as an appendix to the note) demonstrated that the Tullich field would begin to have a negative cashflow in 2023, and a substantial negative cashflow in 2024, leading to the CoP of the Tullich field and the transfer of the costs related to the Gryphon FPSO operation to the remaining fields. This transfer led to a negative cashflow for the Gryphon hub from 2025 onwards, demonstrating that further petroleum recovery was not economic and justifying the planning of CoP of the Gryphon FPSO by the end of 2024 compliant with the Strategy. The note records the need, in accordance with the definition of petroleum covering both oil and gas, for the consideration of the central obligation under the Strategy to take account of the future opportunity to exploit the gas resources once oil production has ceased. The note went on to record the difficulties and problems with the Gryphon FPSO both in terms of its age and also its carbon emissions. The note recorded the work which Total did in relation to finding viable alternative options and also Total’s reasons for rejecting the proposal from the claimant. The note reiterated Total’s work on ensuring decommissioning was cost effective. The note also disputed that paragraphs 26 to 28 of the Strategy applied in circumstances where there had been no decision on the part of Total not to ensure MER. The paragraphs were, therefore, simply not engaged, but even if they were no realistic proposal had been received by Total which would provide for divestiture on reasonable terms to another financially and technically competent person who could achieve MER.

158. Prior to this on 4 November 2024 Mr Moulds recorded in an email his updated combined summary of the review of the economic data relating to CoP. This records as follows:

“▪ Estimated CoP dates differ between Operator and Societal perspectives due to the difference in the appropriate carbon cost assumptions; the former uses UK ETS market carbon price projections and the latter, societal carbon values. As societal carbon values are higher than UK ETS prices, the resulting CoP dates will generally be earlier under the societal perspective compared to the operator perspective.

▪ As reported in the “Outputs” sheet, estimated CoP dates:

• Operator perspective: 2029 under central hydrocarbon prices, in the range 2025 to 2030 (low to high prices)

• Societal perspective: 2026 under central hydrocarbon prices, in the range 2024 to 2030 (low to high prices)

• It should be noted that the Net Present Value (NPV) estimates reported include estimated decommissioning costs (default model outputs). Analysis was not undertaken excluding decom costs which would show all assets / area have positive

BTCF and NPVs until end 2029 (Operator) and 2026 (Societal).

▪ As a result, the societal NPV estimate (cell Q8, Outputs sheet) is particularly indicative and treated with high degree of caution in this analysis. Further information and analysis would be required to assess the extent to which decommissioning expenditure could be accelerated due to earlier CoP and the resulting impact on NPVs.”

159. Also at around this time on 7 November 2024 the defendant wrote to the claimant in the following terms:

“2. As the NSTA indicated in its letter (from Brenda Wyllie, Northern North Sea and West of Shetland Area Manager) of 17 October 2024 to Nobel and TotalEnergies, and in its Summary Grounds, the NSTA intends to consult Nobel and the other recipients of that letter on its proposed section 32 advice to OPRED. The NSTA’s intention is to provide those parties with a copy of the proposed advice to OPRED (subject to redactions for confidentiality where appropriate) to offer the parties an opportunity to make representations on it before it is finalised, should they wish to do so. The NSTA will contact the parties about that shortly.”

160. On 18 November 2024 Ms Wyllie contacted Mr Desindes at Total in response to their note. On 20 November 2024 Mr Desindes of Total responded to Ms Wyllie with economic information to address the questions which she had raised in her email of 18 November 2024. Ms Wyllie forwarded this information to Mr Moulds who indicated that he proposed to get moving on the analysis and keep her updated. On 21 November 2024 Mr Moulds wrote himself some notes following his review of the material. The notes which he made in relation to the economic analysis provided by Total were as follows:

“Economic Recovery from Field Vs Hub Overall

Tullich CF negative in 2025 so COP in 2024

Tullich goes cash flow negative in 2025. So on it’s own no longer economic

So take offline end 2024

Transfers share of FPSO costs to remaining producing fields

All fields bar McClure become pre-tax cashflow negative from 2025, hub generating losses overall.

Are we saying Tullich just makes a minor CF negative loss in 2024, but share of costs is much bigger which tips hub negative in 2025?

B/C we don’t have offsetting revenues from Tullich but all of FPSO costs

2/3 cost share for Tullich – big production.

1. Assessment

The conclusion in 2023 to COP Tullich at end 2024 was necessary as the economics show that there is no longer economic recovery of petroleum from that field after 2024. It then follows that the hub becomes cashflow negative and uneconomic as the estimated cost of extraction exceeds the estimated value of the recoverable resources. This supports the conclusion made by the Gryphon Owners to COP Gryphon FPSO from end 2024.

Is it normal, reasonable for them to take Tullich offline?

What about societal costs?

If we included them would it all CoP at end 2024

But hub as a whole CF positive to 2027? MER single owner approach.”

161. On 26 November 2024 the defendant’s Ops team provided their response (dated 25November 2024) to the questions which had been posed earlier by the decommissioning team in the email from Ms Hepworth. The key elements of the response report, after having set out the questions which Ms Hepworth raised and which are set out above, were as follows:

“5. The NSTA has reviewed the relevant economics information submitted by TEPUK on 8th November 2024 (‘Note to NSTA’ and ‘Appendix A’) and on 20 November 2024 (economic model and corresponding datasets). The information relates to the economic assessment conducted by TEPUK in late 2022 through to early 2023, which concluded that the appropriate Cessation of Production (‘CoP’) date for the Gryphon FPSO and by extension all user fields, should be end -2024.

6. In assessing the information and data provided in a manner consistent with the definition of ‘economically recoverable’ in the OGA Strategy, the NSTA is of the view that it is reasonable to conclude that the Gryphon hub area could reach economic CoP by end -2024. Economic assessments are subject to uncertainty around forecasts of both cost and revenue drivers and consequently it is considered possible that the hub area could remain economically viable for around one additional year under higher hydrocarbon price assumptions i.e. to end -2025. However, it is recognised that the cost and production forecasts did not include provision for unplanned costs or outages. Given these downside risks from continued production, a CoP date of end -2024 would on balance appear reasonable and consistent with the Central Obligation.

9. In terms of assisting the Secretary of State in meeting the net zero target and asset performance, when reviewing the Emissions Monitoring Dashboard 2024 , it is noted that for 2023 the Gryphon Alpha FPSO holds the worst performance for floating assets in the UK, flaring 0.87bcf of gas. This poor performance is generally considered by the NSTA to be related to the age and design of the FPSO. This view is formed from the NSTA’s flare and vent benchmarking. This is a general observation that older facilities have poorer performance. The high flare volume has required detailed oversight by the NSTA during times such as, but not limited to, the Annual Consenting Exercise.”

162. On 2 December 2024 Mr Moulds provided an updated version of the response by the Ops team to reflect his work on the economic analysis. In particular, within that update he noted that “economic assessments are subject to considerable uncertainty around forecasts of both cost and revenue drivers” and noted that the defendant’s economic assessment had been prepared on the basis of three different price assumptions. This was provided to Ms Hepworth by Ms Wyllie as part of an update to the Ops Team response to her enquiries. The overarching conclusion was expressed in the following terms (which did not differ substantially from the conclusion reached in the response which had been circulated earlier):

“10. Based on the range of scenarios and uncertainty, the NSTA is of the view that it is reasonable to conclude that the Gryphon hub area could reach economic CoP by end-2024 or remain economically viable for around one additional year under higher hydrocarbon price assumptions i.e. to end-2025. The later estimated date of end-2025 (scenarios b and c) largely reflects higher oil price assumptions for the period assessed compared to scenario a. However, it is recognised that the cost and production forecasts provided by TE did not include provision for unplanned costs or outages. Given these downside risks from continued production, a planned CoP date of end-2024 would on balance appear reasonable and consistent with the Central Obligation.”

163. On Wednesday 4 December 2024 the defendant circulated to the various field owners, including the claimant, their draft advice to OPRED pursuant to section 32(7) of the 1998 Act. They required a response by way of any representations on the advice by 5pm on Monday 9 December 2024. The timescale for the response to the draft advice to OPRED was extended by the defendant to 11 December 2024. On 10 December 2024 Ms Edgeler emailed Mr Pogson pointing out that she was still awaiting a response to her inquiries in relation to the claimant’s governance, the original enquiry having been raised on 18 October 2024.

164. On 11 December 2024 the solicitors acting on behalf of Total responded to the defendant in relation to the draft advice. They made three points related, firstly, to the economic analysis, secondly, to the cost of the decommissioning works and, thirdly, in relation to the costs involved in terminating the decommissioning project. On 12 December 2024 solicitors on behalf of Sojitz responded to the defendant welcoming the draft advice and its contents. In parallel with the consultation process the defendant had been seeking the permission of Total to disclose the economic data provided by Total which was scrutinised by the defendant in order to arrive at their draft advice, including the data upon which the analysis was based. Total responded to this request on 12 December 2024 indicating that if the defendant insisted upon the release of that material to the claimant then it would be necessary for the claimant (and any other parties receiving it) to provide an undertaking to keep the information disclosed secret and confidential, and not to use or exploit it for any purpose other than providing a response to the defendant on its draft advice or, if necessary, in respect of any judicial review proceedings in respect of that advice. There was then a relatively extensive debate about the appropriate form of undertakings in respect of the use of the material which culminated in a form of undertakings being agreed between the parties leading to the disclosure of the information by the defendant on 22 December 2024. As a consequence of the delays which had been involved in securing the disclosure of the information, the defendant agreed that any observations should be received by them by 2pm on 6 January 2025.

165. On 3 January 2025 Total wrote to advise that oil production at the Gryphon field had ceased permanently on 31 December 2024. This was in line with the terms of the POSAs and the termination notice which had been given under those agreements on 14 July 2023.

166. The claimant presented a lengthy response to the consultation on the defendant’s draft advice. That response firstly complained about the time scales and process of the consultation and, notwithstanding Total having instigated CoP, the need for the defendant to properly evaluate the submissions in relation to their draft advice. The consultation response went on to criticise the soundness of the economic evaluation which had been undertaken by the defendant and point out that the claimant’s own evaluation of the economics showed that the Gryphon hub would be cash positive until at least the end of 2027. The claimant in particular criticised the use of an economic model which dated from late 2022/early 2023 and which was not based upon up to date information. The more recent production data provided a more positive basis for the modelling, and the 2022 production forecasts had proved either conservative or inadequate. The use of data and forecasts from 2022 rendered two of the scenarios modelled irrelevant from the claimant’s perspective. Further, the claimant complained that the analysis in the draft advice had failed to address the economic modelling that the claimant had provided with its letter of 30 November 2023. The claimant criticised the failure to undertake any economic analysis in detail prior to November 2024. The difficulties presented by the costs being required to be borne by the Tullich field, which in turn caused issues for the viability of the hub as a whole, could have been easily addressed by Total readjusting the contractual arrangements under its POSA with the other Gryphon owners.

167. The claimant pointed out their view that the defendant owed a duty to the other field operators when considering whether or not CoP should be authorised. The claimant further submitted that the evidence did not support that the potential sale or divestment of the Gryphon FPSO had been properly undertaken by Total, and the claimant criticised Total’s efforts in that connection. The claimant went on to reinforce the offer which they had made to Total on 23 October 2024 to ensure that, from their perspective, MER was achieved. The claimant criticised the treatment of that offer in the analysis contained within the draft advice, refuting again the three reasons why it was said that Total could not accept their offer. The claimant submitted that the defendant should take further steps to investigate the question of decommissioning cost minimisation and contended that the draft advice was deficient in its considerations of the requirements of section 8 of the Energy Act 2016. Further responses to the draft advice were received from the solicitors acting on behalf of Total on 6 January 2025 noting that CoP had in fact occurred on 31 December 2024 and that contracts had been arranged for the removal of the Gryphon FPSO and its recycling.

168. It appears that there was correspondence between the claimant and the Secretary of State on 6 January 2025 and enquiries were raised by the Secretary of State with the defendant. On 8 January 2025 solicitors on behalf of the claimant wrote to the defendant reiterating their concerns in relation to Total’s instigation of CoP and seeking action by the defendant to recommence oil production. Further correspondence was received by the defendant from the claimant’s solicitors on 15 January 2025, again reiterating concerns about CoP and expressing the further concern that the defendant may have approved of Total’s actions in that respect. In the meantime, it appears that during January the defendant’s analysts were undertaking work to examine the economic modelling that had been provided to them both by Total and also by the claimant. The economic analysis was undertaken by Mr Moulds and his colleagues with a view to testing the robustness of the modelling as well as seeking to identify the principal disagreements between the analysis undertaken by the claimant and Total.

169. On 30 January 2025 the defendant’s team of economic analysts provided a final paper for the purpose of informing the defendant’s decision-making process on the draft advice. The paper noted the submission of further economic information from the claimant which had been assessed and reviewed by the economics team. The economic team’s analysis took recent production performance and cost data sources into account and reached the following conclusions:

“14. The OPEX profile used in reviewing and assessing the Team’s draft view was the TEPUK profile supplied in the UKSS 2022 which included years beyond 2025. This is higher than the profiles supplied by TEPUK and Nobel in their most recent responses. The higher OPEX is consistent with the NSTA’s observed performance of the Gryphon hub where necessary production pitstops and maintenance activities have been planned. The low OPEX presented by TEPUK is considered by the Operations Team to be related to the final year of production where maintenance is at a minimum and is, therefore, not considered an appropriate profile. Nobel appear to have assumed that this low OPEX year can be sustained without any explanation of how to achieve it.

15. With regard to emissions, the profile submitted by Nobel in the SET is markedly lower than the TEPUK profile supplied in UKSS 2022. Lower projected emissions and resulting carbon cost estimates would also improve the hub economics from Nobel’s perspective and suggest a later CoP date as does the combination of higher production and lower OPEX.

16. In summary, based on the range of scenarios and indicated range of modelling uncertainty, the Team remain of the view, as expressed in the draft advice that was provided to the interested parties, that it is appropriate to conclude that the Gryphon hub area could reach economic CoP by end-2024 or remain economically viable for around one additional year under higher hydrocarbon price assumptions i.e. to end-2025 from a societal perspective, again using economic assumptions consistent with scenario (c) above i.e. DESNZ October 2024 Fossil Fuel Price Assumptions and societal carbon values (central estimates).

17. The later estimated date of end-2025 (scenarios (b) and (c)) largely reflects higher oil price assumptions from a later date for the period assessed compared to scenario (a).”

170. On 30 January 2025 Ms Wyllie submitted her team’s update to the response report provided on 25 November 2024 in the light of the claimant’s comments in the consultation response dated 6 January 2025. The second section of that document is the part which is specifically devoted to responding to the claimant’s consultation response. It incorporated the work of the economics team in respect of the CoP date and concluded as follows:

“33. It is reasonable and appropriate for the Owners to have assessed a CoP date based on the TEPUK profile supplied in the UKSS 2022 and planned for CoP accordingly. This aligns with the NSTA Stewardship Expectation 10 on Cost Effective Decommissioning as a planned and orderly transition from late life operation through CoP into decommissioning that avoids reactive decommissioning, is a key consideration in delivering the Central Obligation. The Owners have realised some unexpected, unplanned outages and encountered significant integrity issues. This supports the NSTA having no objection to the planning for decommissioning given the likelihood of another event causing an unplanned COP event leading to reactive decommissioning activities.

34. The production profile submitted by Nobel in the SET is higher than the TEPUK profile supplied in the UKSS 2022. The rationale for the higher production in the Nobel SET may be linked to the actual volumes observed in 2024. This profile is considered by the NSTA to be a high case as the CoP date selected for end-2024 would likely have led to prior operational choices in reducing production pitstops and maintenance activities that would benefit production volumes in 2024. It is the NSTA’s view that the TEPUK profile supplied in the UKSS 2022 remains an appropriate production profile and is therefore appropriate to have been used when formulating the Team’s view.”

171. As a result of these observations the view remained that it was reasonable for Total to have chosen the end of 2024 as the CoP date for the Gryphon FPSO. The response went on to consider the issues in relation to divestment of interest, and noted that in respect of the claimant’s proposals there had been no application for them or others to be nominated the licence operator, field operator, well operator or installation operator, nor had any heads of terms been provided in respect of either the transaction with Total or with the remaining participants in the field. There were no details in respect of the technical services to support the proposal and it did not cover any unplanned events leading to reactive decommissioning in any detail. In consequence the response was, in effect, in similar terms to that which had been provided on 25 November 2024 on these issues.

172. On 5 February 2025 Mr Alasdair Thomas of the defendant delegated to Mr Andy Brooks, the defendant’s Director of New Ventures, the responsibility for being the accountable person for reviewing the Gryphon FPSO decommissioning programme on the basis that he and also the Head of Decommissioning and Director of Supply and Decommissioning had all been previously involved in the issue. On the same day Mr Brooks reviewed the draft advice and made some requests for clarification or correction of the document. Mr Brooks sought to have further clarifications in relation to the economic analysis and held a meeting with Mr Moulds in order to review matters. Following these discussions and inquiries, Mr Brooks concluded that he was in agreement with the draft advice that the decision taken by Total was reasonable. In particular, he concluded “that the range of scenarios analysed are not only appropriate but have been undertaken in a way that is consistent with the definitions stated”, and that “the offer to take over the FPSO show a level of immaturity that does not take into account the time required to negotiate and manage the handover of a facility … the complexities and challenging of operating an aging FPSO with higher than benchmark emissions or the impacts on the economics of an operational “trainwreck” which could easily drive earlier and unplanned CoP”. Mr Brooks also expressed himself content with the remainder of the draft advice and considered it appropriate for it to be submitted to OPRED on behalf of the defendant.

173. On 7 February 2024 the defendant sent their advice to OPRED pursuant to section 32(7) of the 1998 Act. In short, their advice was that no viable alternatives to decommissioning had been identified and that the decommissioning programme had been generally framed so as to ensure that its costs were kept to a minimum. The advice set out to examine whether the continued use of the Gryphon FPSO could be a potential alternative to decommissioning with regard to the central obligation in the Strategy. In respect of the consideration of MER, the advice introduced its approach in the following terms:

“2.7 It is recognised that, for their own internal purposes, companies may assess their economic and commercial decisions in a different manner to that set out here from the NSTA perspective with regard to the maximising economic recovery (‘MER’) objective, expressed in the Central Obligation above. In particular, companies are likely to consider the economics of investments and asset cessation of production (‘CoP’) timings with regard to the expected financial costs arising from the purchase of UK Emissions Trading System (‘UK ETS’) allowances, rather than the societal economic cost of GHG emissions as reflected in DESNZ (then BEIS) carbon (appraisal) values. In addition, some companies may assess the appropriate date of asset/field CoP on a sequential cashflow basis, rather than at the aggregate hub level, as considered appropriate by the NSTA in order to be consistent with the Strategy and MER objective.

2.8 The NSTA has carried out a number of analyses, using different sets of assumptions, as explained further below.”

174. The advice went on to explain that the economic information submitted by Total had been the subject of analysis by the defendant in a manner “consistent with the definition of “economically recoverable in the strategy””. The material parts of the advice in respect of economic analysis for present purposes were as follows:

“2.11 It is noted that the definition of “Economically recoverable” in the Strategy definition section provides that societal carbon costs will be taken into account in assessing MER and that UK government carbon appraisal values for all greenhouse gas emissions will be used.

2.12 From a societal/MER perspective, the analysis is used to estimate the year in which annual net economic value at hub level is expected to become negative, meaning that petroleum production is no longer economic and should cease.

2.13 It should be recognised that economic assessments are subject to considerable uncertainty around forecasts of both cost and revenue drivers. As such, and following the approach outlined above, the NSTA estimated CoP dates at hub level under three different sets of economic price assumptions and modelling start date scenarios:

a) Wood Mackenzie 2022 Q2 Valuation Assumptions (central prices) on a 2022 point forward basis: consistent with assumptions used by TEPUK at the time of their assessment. The results indicate that the overall hub would have only marginally positive net value in 2025, suggesting that CoP by end-2024 would be reasonable or by 2025 at the latest.

b) DESNZ (then BEIS) 2022 Fossil Fuel Price Assumptions (central prices) on a 2022 point forward basis: consistent with modelling assumptions used by the NSTA at the time of the TEPUK assessment.

The results indicate that at the overall hub would reach a negative net value position in 2026, suggesting that CoP by end-2025 would be reasonable.

c) DESNZ October 2024 Fossil Fuel Price Assumptions (central prices) on a 2024 point forward basis: consistent with modelling assumptions currently used by the NSTA.

The results indicate that at the overall hub would reach a negative net value position in 2026, also suggesting that CoP by end-2025 would be reasonable.

(Scenarios a, b, c)

2.14 Based on the range of scenarios and uncertainty, the NSTA is of the view that it is appropriate to conclude that the Gryphon hub area could reach economic CoP by end-2024 or remain economically viable for around one additional year under higher hydrocarbon price assumptions i.e. to end-2025. The later estimated date of end-2025 (scenarios b and c) largely reflects higher oil price assumptions for the period assessed compared to scenario a. Based on the data and assumptions used, an estimated CoP date of between end-2024 and end-2025 is therefore considered within the range of modelling uncertainty. It is also recognised that the cost and production forecasts provided by TEPUK did not include provision for unplanned costs or outages.

…

2.16 It is appropriate for the Owners to have assessed a CoP date based on the TEPUK data from late 2022 / early 2023 and planned for CoP accordingly. This aligns with the NSTA Stewardship Expectation 10 on Cost Effective Decommissioning as a planned and orderly transition, from late life operation through CoP into decommissioning, that avoids reactive decommissioning is a key consideration in delivering the Central Obligation.

2.17 Given the fact that, as set out above, economic assessments are subject to considerable uncertainty on both the costs and the revenue side, and that different dates fall within the range of modelling uncertainty; and the reference potential downside risks from continued production, a planned CoP date by TEPUK of end-2024 would on balance appear appropriate and consistent with the Central Obligation based on these analyses.

…

2.19 In considering continued use in the context of assisting the Secretary of State in meeting the net zero target and of asset performance, it is noted that for 2023, when reviewing the Emissions Monitoring Dashboard 2024, the Gryphon Alpha FPSO had the worst performance for floating assets in the UK, flaring 0.87bcf of gas. This poor performance is generally considered by the NSTA to be related to the age and design of the FPSO. This view is formed on the NSTA’s flare and vent benchmarking. This is a general observation that older facilities have poorer performance. The high flare volume has required detailed oversight by the NSTA during times such as, but not limited to, the Annual Consenting Exercise. This information is provided for context to illustrate that there are significant downside risks to continued operation of the FPSO which should be accounted for as unplanned outages or additional costs in forecasts. In the NSTA’s view, further significant investment may likely be required to achieve year-on-year emissions reduction. It is noted that emissions reduction costs are not specifically set out in either TEPUK or Nobel’s cost forecasts.

2.20 The NSTA has also considered the information provided by Nobel to the NSTA to date, including letters dated 30 November 2023, 23 October 2024 and 6 January 2025.

2.21 Nobel’s view, based on this information, is that overall the Gryphon hub area is expected to remain economic beyond end-2024 and to at least 2027. It also indicates that their cashflow assessment was undertaken at the aggregate hub level, rather than at sequential field level, using forecast costs (assumed by the NSTA to include UK ETS costs) and revenues.

2.22 The NSTA has also assessed and reviewed the accompanying data provided by Nobel in NSTA Standard Economic Template (‘SET’) format, as part of Nobel’s response of 6 January 2025, in a manner consistent with the definition of ‘economically recoverable’ in the Strategy as outlined above. The NSTA’s results using Nobel’s SET data from the response and using the same societal carbon value modelling approach as applied to TEPUK data (as above), also indicates end-2027 COP.

2.23 In response to Nobel’s comment in its 6 January 2025 letter that the NSTA had not used the latest data, the NSTA assessed and reviewed the data available via the NSTA UK Stewardship Survey (‘UKSS’) representations made to it, including the provided Nobel SET. When compared to the TEKUP profiles supplied in the UKSS 2022, Nobel’s current forecasts (which result in a modelled end-2027 CoP date) suggests substantially higher oil and gas production levels, substantially lower emissions and substantially lower OPEX, over the period modelled, which combine to improve the economics of the hub.

2.24 The TEPUK profiles supplied in the UKSS 2023 were not used in the NSTA’s review as this only included profiles for 2024.

2.25 The OPEX profile used in this further review was the TEPUK profile supplied in the UKSS 2022 which included years beyond 2025. This is higher than the profiles supplied by TEPUK and Nobel in their most recent responses. The higher OPEX is consistent with the NSTA’s observed performance of the Gryphon hub where necessary production pitstops and maintenance activities have been planned. The low OPEX presented by TEPUK and Nobel is related to the final year of production where maintenance is at a minimum and is, therefore, not considered an appropriate basis for extrapolation for additional years. Nobel appear to have assumed in the correspondence that this low OPEX year can be sustained without any explanation of how to achieve it.

2.26 With regard to emissions, the profile submitted by Nobel in the SET is markedly lower than the TEPUK profile supplied in UKSS 2022 and the observed historical performance. Lower projected emissions, without investment profiles to achieve those and resulting lower carbon cost estimates both serve to improve the hub economics from Nobel’s perspective. The NSTA does not accept the lower emission profile as there is no plan or investment profile set out to achieve this.

2.27 In summary, based on the range of scenarios and indicated range of modelling uncertainty, the NSTA remains of the view, as expressed in the Draft Advice that was provided to the interested parties, that it is appropriate to conclude that the Gryphon hub area could reach economic CoP by end-2024 or remain economically viable for around one additional year under higher hydrocarbon price assumptions i.e. to end-2025 from a societal perspective, again using economic assumptions consistent with scenarios (b) and (c) above.”

175. The advice went on to consider paragraphs 26 to 30 of the Strategy and conclude that on the basis that the planned CoP date of the end of 2024 was appropriate and consistent with the Strategy, these paragraphs were not engaged. However, even if the paragraphs were applicable the advice noted that Total had engaged in a divestment process for the Gryphon FPSO which had not identified any credible buyers. The advice recorded the offer made by the claimant in relation to the acquisition of the Gryphon FPSO and the concerns which Total had articulated in relation to it. In the light of the exchanges recorded between the claimant and Total, the advice concluded “that there is no likelihood for a commercial transaction to be agreed between Nobel and TEPUK for the purchase of the FPSO”. The advice also noted that no application had been made in relation to nominations for a licence operator, field operator, well operator or installation operator in respect of the claimant’s proposal, nor were there any agreements in place with the owners of the satellite fields specifically relating to the claimant’s proposal. Nor was there information covering an unplanned event leading to reactive decommissioning in any detail. In summary, the advice provided as follows:

“2.49 The NSTA noted in the Draft Advice that Nobel have no experience as a Field Operator in the UKCS. In its 6 January response, Nobel responded that they have an experienced Team. However, to be appointed as a field operator a company must demonstrate that it understands the development and environmental responsibilities of the operator and that it is competent, both financially and technically, to discharge these. It must also have a sound management structure staffed by an established group of experienced personnel. In an email from the NSTA to Nobel, dated 26 February 2024 guidance on how to apply for Field Operatorship was provided to Nobel. However, to date:

• No application has been made to the NSTA to consider Nobel as the Field Operator of Gryphon, Tullich, Ballindalloch or Maclure fields.

• Nobel have not presented any evidence that they are supported by TEPUK, Sojitz, TAQA or Apache in being appointed as Field Operator. This application would include information related to the technical expertise and the NSTA keep an open mind to review this application should it be made.

• Nobel has referenced a company that may be able to act as installation operator of the Gryphon Alpha FPSO on Nobel’s behalf, however no evidence has been provided to indicate that this is supported by the other parties.”

176. The advice went on to consider the question of whether or not Total had demonstrated minimisation of decommissioning costs. The concerns which were expressed by the claimant in their letter of 6 January 2025 were set out in the advice, but the defendant gave its view that appropriate cost minimisation had been achieved.

177. On 7 March 2025 Ms Samantha Hewson at OPRED raised a number of queries in relation to the terms of the draft advice including questions related to the detailed assumptions contained within the economic analysis. On 17 March 2025 a meeting was convened between representatives of OPRED and the defendant in order to discuss the additional questions which had been raised.

178. On 31 March 2025 Mr Pogson wrote to the defendant’s decommissioning team responding to observations in the draft advice relating to the claimant’s economic analysis. He pointed out that the claimant had included the cost of carbon dioxide emissions from the Gryphon FPSO in their operating costs profile at the same amount as Total for the years 2022-25. They had assumed that this remained similar through 2026 and 2027 but by contrast Total had assumed an increased level in 2026 and that in 2027 the level of emission would remain the same as 2026. Mr Pogson pointed out there was no explanation for this increase. In respect of the advice to OPRED Mr Pogson noted that it was incorrect for the defendant to have said that the emissions profile submitted by the claimant was markedly lower than Total for this reason. He disputed the notion that capital investment would be required to achieve a consistent emissions profile across the whole of 2022 to 2027. Mr Pogson also questioned the defendant’s observations that the opex profiles provided by Total and the claimant were lower than the defendant’s observed performance of the Gryphon hub. He pointed out that Nobel were well aware of the costs as they were paying them. He further observed that the claimant’s production forecasts were higher than those of Total because they better reflected recent actual performance of the fields and that was why they had been used in their analysis. This built upon earlier correspondence in which Mr Pogson had drawn attention to the fact that the claimant’s analysis incorporated up to date data in relation to production rather than the production data available at the time when the decision to CoP had been made by Total. At those production levels there was, he contended, significant economic value left in the four fields.

179. On 1 April 2025 the defendant wrote to Total advising that they were opening an investigation into them concerning their decision to CoP at the Gryphon field and cease the operations of the Gryphon FPSO. A range of information was sought by the letter in order to further the investigation.

180. On 10 April 2025 the defendant provided responses to the requests for clarification that had been raised by OPRED. This document provided a good deal of further detail in relation to the questions which OPRED had raised in respect of the underlying views and material which supported the opinion set out in the advice.

181. On 25 April 2025 the defendant wrote to the court and the parties explaining that they had identified an issue in relation to opex in the section 32 advice “in particular that paragraphs 2.23 and 2.25 may not reflect the actual position in relation to (i) whether there is a difference between the OPEX profile supplied in the UKSS 2022 and the OPEX profiles supplied by TEPUK and Nobel in their most recent responses; and (ii) if so, the reason for that difference”. The issue was further clarified in a letter of 29 April 2025 in which the defendant identified that following a consideration of the evidence lodged by Total in these proceedings, and their explanation of the way in which Total had submitted certain opex data to the defendant as part of the UKSS, there had been an overstatement of the Total opex for the Gryphon field and FPSO, the detail of which was set out in the correspondence. In essence, the way in which Total had completed their UKSS documentation incorporated an element of double counting relating to the payment by the Gryphon field itself for the services of the FPSO. The figure for opex provided was therefore inaccurately inflated by the double counting. The letter records that as a result of the data in the UKSS 2022 including an element of double counting, the comparison that the defendant had undertaken between that data and the Nobel January SET data and Total November SET data proceeded on a flawed basis. Thus there were factual inaccuracies in the analysis set out in paragraphs 2.23 and 2.25 of the section 32 advice related to the comparison between the Total OPEX figure in the UKSS 2022 and the OPEX profiles in Total’s November SET data and Nobel’s January SET data. As a consequence, the defendant indicated an intention for Ms Wyllie to provide further evidence on the issue and for Mr Brooks, who it will be recalled was the “accountable person” for approving the section 32 advice, to consider the advice afresh based on the correct OPEX data.

182. On 13 May 2025 Mr Brooks wrote to colleagues at the defendant and in particular Ms Hewson to document his review of the section 32 advice in the light of the error which had been identified in relation to the economic analysis. His conclusions were expressed as follows:

“With reference to “NOBEL (paragraphs 2.20 – 2.26)” and the review of the further information provided I have concluded that;

1. There were errors in the data used as the basis of the response in these paragraphs. Specifically in relation to the OPEX data provided by TEPUK in multiple responses to the UKSS over several years.

2. The explanation of the OPEX figures that is given in the letter of 29 April 2025 from NSTA to Dove J and the parties; and in Wyllie 3 paras 10-52 acknowledges the error in the UKSS 2022 data but critically states this was not used as part of the economic analysis as all these were done using the appropriate SET Data and I have confirmed this to be correct.

3. I can conclude that the “Total OPEX” data presented within the SET’s is broadly consistent between Nobel and TEPUK, however this is only one part of the inputs into the economic analysis. On both Emissions and Production, it is likely that TEPUK view is pessimistic whilst Nobels is optimistic, and reality lies somewhere in between.

4. Specifically on emissions. Nobel’s data suggest that emissions can be kept flat at ca. 100KtCOe per year between 2025 and 2027. TEPUK however, believe this is not attainable and instead suggest that emissions in 2026 and 2027 will increase to ca. 160KtCOe per year. There is no real detail from either party as to how these numbers can or will be achieved (i.e. investment to sustain it or issues that will cause it to increase). As stated above from my experience I would suggest that the actual number is likely to be somewhere in between unless there is a major operational “trainwreck” which would mean it could be significantly higher than TEPUK’s forecast.

5. On production I see that Nobel are forecasting higher production from all the fields compared to TEPUK. I agree with Ms Wyllie’s in paragraph 47 of her third witness statement which states that it would be inappropriate to use updated data (Nobel’s Forecast) as this will generally be higher in the last year or so before decommissioning. The actual forecast almost certainly lies somewhere in between the profiles presented by Nobel and TEPUK. However, both have been modelled as part of the original s.32 advice.

Taking all the above points in to account I remain of the view that production and emissions profiles presented by Nobel are “overly optimistic”. Whilst the error in the OPEX data reduces one “downside” uncertainty it does not reduce the downside uncertainty of both Emissions and production. This combined with the fact that there is no line of sight in any reasonable timeframe to a commercial construct that would allow Nobels optimistic view to even be possible only serves to continue to demonstrate that my previous view remains.

In conclusion, for the reasons set out above I am content for this information to be submitted to the Secretary of State.”