Petroleum Act 1998
What this means for your business
- Enforced by
- NSTA
- Applies to
- United Kingdom
- On this page
- 19 compliance obligations, 1 practical guide
What you must do
19 compliance obligations under this legislation — 3 can result in imprisonment.
Management duties 7
Apply to pipeline owner before seeking OGA permission
If your business wants to transport oil or gas through a controlled petroleum pipeline that you donāt own, you must first ask the pipelineās owner for permission. You need to give the owner a written notice stating what you want to transport and how much, and if you canāt reach an agreement you can then apply to the Oil and Gas Authority (OGA) following a set timeframe.
Carry out approved abandonment programmes
If your business submits an oil or gas abandonment plan and the Secretary of State approves it, you must make sure the plan is actually carried out and that you follow any conditions attached to the approval. In practice this means organising, overseeing and documenting the deācommissioning work to meet the approved schedule and requirements.
Comply with OGA determination on Norwegianābased pipeline terms
If your business owns a controlled petroleum pipeline that falls under the UKāNorway framework agreement, you must respond to any application made by a nonāowner to the Oil and Gas Authority (OGA). When the OGA decides you have breached the Norwegianādetermined terms, you must take the actions it orders (or stop the prohibited actions) to bring the pipeline back into compliance.
Comply with Petroleum Act regulations to prevent civil liability
If you run a petroleum operation, you must follow the rules set out in the Petroleum Act. A breach of those rules can only be sued against you when personal injury occurs, so the Act makes it clear you can be sued if you slip up and someone gets hurt.
Follow the current petroleum strategy when planning and carrying out activities
If your business holds a petroleum licence, operates under one, commissions upstream petroleum infrastructure, or owns an offshore installation or upstream infrastructure, you must make sure all your planning and work line up with the regulatorās latest petroleum strategy. In practice this means checking the current strategy before you start a project and keeping evidence that your activities follow it.
Minimise costs and consult OGA when amending abandonment programmes
If your business wants to change an abandonment or deācommissioning plan that has already been approved by the Secretary of State, you must design the change so that the cost of carrying out the programme is kept as low as reasonably practicable. Before you make the amendment you must consult the Oil and Gas Authority (OGA), which will check that you have considered cheaper alternatives and that you have met the costāminimisation requirement. Anyone who later approves the amendment must also take the cost impact into account.
Publish conditions and manage rights for offshore gas storage
If your business owns an offshore gas storage facility covered by this Act, you must each year publish the main commercial terms for anyone who wants to store gas there, update those terms as soon as they change, and make sure the terms are not discriminatory. You also have to deal with requests for storage rights, negotiate in good faith, and if you cannot reach an agreement the applicant can apply to the Director.
Other requirements 2
Comply with notices and duties under the Petroleum Act
If your business receives a notice under the Petroleum Act (for example, about the operation or safety of a petroleum pipeline), you must follow the notice and meet the related statutory duties. Failure to do so can lead to civil action by anyone harmed, so you need to act promptly and keep proof of what you have done.
Obtain OGA authorisation before building or using pipelines in controlled waters
Unlimited fineYou must not carry out any works to build a pipeline, or use a pipeline, that lies in, under or over UK territorial seas or other designated waters unless you have written permission from the Office of Gas and Electricity Markets (OGA). In practice this means you need to apply for and receive an OGA authorisation before any construction starts or the pipeline is put into service.
Offences and prohibitions 8
Abandon offshore installation or pipeline without approved programme
2 years imprisonmentIf you receive a notice under sectionāÆ29(1) about an offshore installation or submarine pipeline, you must not abandon, start, or continue deācommissioning it unless the Secretary of State has approved an abandonment programme for that asset. Doing so without a reasonable excuse is a criminal offence that can lead to prosecution.
Fail to comply with an abandonment notice
If you have been given a written notice by the Secretary of State ordering you to take remedial action on an approved oilāfield abandonment programme and you do not carry out that action (or cannot prove you took all reasonable steps to do so), you commit a criminal offence. A court can then order you to pay the costs incurred by the Secretary of State, plus interest, and may impose further penalties such as a fine or imprisonment.
Fail to comply with a notice to provide programme information
If the Secretary of State sends you a written notice asking you to give the name and address of every other person you believe should be involved in an abandonment programme for an offshore installation or submarine pipeline, and you do not provide that information without a reasonable excuse, you commit a criminal offence. Conviction can result in a fine and/or imprisonment, although the exact penalties are set elsewhere in the legislation.
Fail to comply with information notice for abandonment programme
Unlimited fineIf you receive a written notice from the Secretary of State requiring you to supply records, drawings or other information for an abandonment programme and you do not do so without a reasonable excuse, you commit a criminal offence. A conviction can lead to a fine, a custodial sentence or both, at the discretion of the court.
Fail to comply with notice to plug or abandon well
2 years imprisonmentIf you have drilled or started drilling a well under a petroleum licence and the regulator serves you with a notice ā either to provide financial information or to carry out the plugging and abandoning of the well ā you must obey it. Failing to supply the information or to take the required action (unless you can show you took all reasonable steps to avoid the failure) is a criminal offence. On conviction you face an unlimited fine and, on indictment, up to two yearsā imprisonment, and the case can be tried in either the magistratesā court or the Crown Court.
Fail to comply with notice to reduce abandonment programme costs
If the Secretary of State sends you a written notice telling you to change, delay or otherwise adjust actions in an approved oilā or gasāfield abandonment programme, and you do not follow it without a reasonable excuse, you commit a criminal offence. The Secretary can then carry out the required action himself and recover any costs (plus interest) from you.
Fail to comply with or give false information under a financial notice
Unlimited fineIf the Secretary of State serves you a notice asking for details of your financial affairs or the costs of abandoning an oil or gas installation, you must supply the information and documents you are asked for, accurately and within the time limit. Failing to do so, or providing information you know is false (or are reckless about its truth), is a criminal offence. Conviction can lead to an unlimited fine and, in the Crown Court, a term of imprisonment.
Unauthorised disclosure of licence transfer information
2 years imprisonmentIf you reveal information about a petroleum licence transfer that HMRC has supplied to another authority, without the required consent, a court order, or the agreement of the people the information concerns, you commit a criminal offence. On conviction you can be fined an unlimited amount and face up to two years in prison (or a shorter term if dealt with in a magistratesā court).
Record keeping 1
Keep accounting records and provide info when the Director requests it
If you own a gasāstorage facility you must keep accounting records for those storage activities, set up so you can supply the Director with financial details and the main commercial terms of any significant transactions when asked. When the Director serves a notice you must provide the requested information within the timeframe set in that notice.
Reporting and filing 1
Provide information to the OGA and do not assign pipeline rights
If you apply for a right to use a petroleum pipeline that crosses the Northern Ireland territorial sea and a foreign continental shelf, the Oil and Gas Authority can ask you for detailed information, especially financial data. You must supply this information by the deadline it sets, let the OGA consult the other countryās authorities, and you cannot sell or give away the right once it is granted.
Penalties for non-compliance
10 penalties under this legislation. 3 can result in imprisonment. 6 carry an unlimited fine.
Commit offence under sections 28A, 30, 33, 36A, 37 or 38
Unlimited fine and/or 2 years imprisonment
Fail to comply with notice to plug or abandon well
Unlimited fine and/or 2 years imprisonment
Unauthorised disclosure of licence transfer information
Unlimited fine and/or 2 years imprisonment
Breach pipeline authorisation or give false information to OGA
Unlimited fine
Fail to comply with information notice for abandonment programme
Unlimited fine
Fail to comply with or give false information under a financial notice
Unlimited fine
Abandon offshore installation or pipeline without approved programme
Penalty applies
Fail to comply with an abandonment notice
Penalty applies
Fail to comply with a notice to provide programme information
Penalty applies
Fail to comply with notice to reduce abandonment programme costs
Penalty applies
Practical guidance
Our guides explain how to comply with the requirements above.
Sections and provisions
90 classified provisions from this legislation.
Duties 14
- s.9BA Exercise of certain functions of the Secretary of State
- s.9F Producing and revising a strategy
- s.9C Carrying out of certain petroleum industry activities
- s.9B Exercise of certain functions of the OGA
- s.14 Construction and use of pipelines.
- s.17GA Controlled petroleum pipeline subject to Norwegian access system
- s.17D Provisions relating to certain offshore gas storage facilities.
- s.17E Section 17D: supplemental. reference in this section
- s.17F Acquisition of rights to use controlled petroleum pipelines. The OGA
- s.17H Enforcement of certain duties in sections 17B, 17D and 17E. Enforcement of duty in section 17GA
- s.17G Section 17F: supplemental. The OGA
- s.23 Civil liability for breach of statutory duty.
- s.34A Amendment of programmes
- s.36 Duty to carry out programmes. of the persons
Offences and penalties 15
- s.5B Information
- s.5C Offences under section 5B: supplemental
- s.10 Application of criminal law etc.
- s.21 Enforcement.
- s.22 Criminal proceedings.
- s.25 Orders and regulations.
- s.28A Restriction on abandonment
- s.30 Persons who may be required to submit programmes.
- s.33 Failure to submit programmes.
- s.36A Reduction of costs of carrying out programmes
- s.37 Default in carrying out programmes.
- s.38 Financial resources.
- s.40 Offences: penalties.
- s.41 Offences: general.
- s.45A Abandoned wells
Powers 23
- s.3 Licences to search and bore for and get petroleum.
- s.4A Onshore hydraulic fracturing: safeguards
- s.4B Section 4A: supplementary provision
- s.4 Licences: further provisions.
- s.5D OGAās power to require information about change in control of licensee
- s.6 Repayments for development.
- s.8 Power to inspect plans of mines.
- s.9G Procedure for producing and revising a strategy
- s.11 Application of civil law.
- s.16 Compulsory modifications of pipelines.
- s.17GB Section 17GA: supplemental
- s.20 Inspectors etc.
- s.24 Application of Part III.
- s.26 Meaning of āpipelineā.
- s.29 Preparation of programmes.
- s.32 Approval of programmes.
- s.34 Revision of programmes.
- s.35 Withdrawal of approval.
- s.38C Charges in connection with exercise of functions under Part 4
- s.38B Directions to provide information about protected assets
- ... and 3 more powers
Definitions 15
- s.1 Meaning of āpetroleumā.
- s.7 Ancillary rights.
- s.8A Interpretation of Part 1 appropriate authority appropriate Minister
- s.9 Supplementary.
- s.9H āUpstream petroleum infrastructureā and its owners upstream petroleum infrastructure
- s.9HA āRelevant offshore installationsā and their owners
- s.9A The principal objective and the strategy
- s.9I Other interpretation operator under a petroleum licence petroleum licence relevant UK waters
- s.13 Interpretation of Part II. foreign sector of the continental shelf
- s.27 Meaning of āownerā.
- s.28 Interpretation of Part III. authorisation carbon dioxide storage site controlled carbon dioxide pipeline
- s.44 Meaning of āoffshore installationā. offshore installation relevant waters gas
- s.45 Interpretation of Part IV. submarine pipeline abandonment programme foreign sector of the continental shelf
- s.48 Interpretation. foreign sector of the continental shelf the OGA
- Table of Derivations Table of Derivations
Exemptions 7
- Schedule 2 Authorisations under section 14
- s.9E OGA's security and resilience functions
- s.12 Prosecutions.
- s.15 Authorisations.
- s.17C Application of section 17D to certain offshore gas storage facilities.
- s.17 Acquisition of rights to use pipelines.
- s.31 Section 29 notices: supplementary provisions.