Editor, UBM

November 26, 2015

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Shell UK sentenced over major oil release

Oil and gas production company Shell U.K. Limited, has been fined £22,500 after admitting failures that led to an oil leak in the North Sea. WWF Scotland said the incident was the worst North Sea spill in a decade.

It was heard in court how on 10 August 2011 a quantity of oil was spotted on the sea surface in the vicinity of Shell’s Gannet F field, 180 kilometres from Aberdeen. The initial reported surface area of oil as identified by the stand-by vessel was approximately 4.5 kilometres in length and 100 metres in width.

The oil release was subsequently observed to be emanating from a subsea relief valve attached to the Gannet F pipeline bundle, in the vicinity of the Gannet F towhead protection structure, about 300ft (91m) below the surface.

The oil release was secured on 19 August 2011 when the relief valves were manually isolated and closed by divers. Shell subsequently estimated to the Department for Energy and Climate Change (DECC) that a total of 218 tonnes of oil was released to sea during the incident.

The Health and Safety Executive (HSE) and DECC carried out a joint investigation into the incident which concluded that the 8” Gannet F oil production pipeline within the pipeline bundle had failed. As a result, crude oil entered the insulated area between the production pipeline and its sleeve and was ultimately released to sea through the relief valves. It concluded there was no significant environmental impact or any risk that anyone would be harmed.

HSE served two Improvement Notices (INs) relating to processes during the investigation following the pipeline failure, which Shell subsequently complied with.

Shell UK Limited admitted breaching the Regulation 3A of the Offshore Petroleum Activities (Oil Pollution Prevention & Control) Regulations 2005 and Regulation 13 of the Pipelines Safety Regulations 1996 and was fined a total of £22,500 at Aberdeen Sheriff Court.

Shell’s overall costs arising from this incident were estimated at about £45m, and the cost of replacing the pipeline was about £100m.

Paul Goodfellow, Shell’s upstream director for the UK and Ireland, said: “We deeply regret the Gannet spill and accept the fine which has been handed down to us.

“We know that no spill is acceptable. Safety is at the heart of our operations and following this incident, a comprehensive review of our North Sea pipeline system was conducted.

“We have learnt lessons from this review and have applied them across our UK upstream operations.”

WWF Scotland director Lang Banks said: “Despite being responsible for worst North Sea spill in a decade, the level of the fine is literally a drop in the ocean when compared to the billions earned by Shell annually.

“When it comes to protecting the marine environment and its own employees it’s absolutely right that oil companies are prosecuted for their mistakes and that lessons are also learned by the wider industry.

“It’s therefore disappointing that the fine was not much larger in this case.”

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8 years ago

Considering they spent 145 million fixing the problem it’s hard to see how a higher fine would have made that much difference to shell.

Mike Kelly
Mike Kelly
8 years ago

The £45 million appears to be post accident costs-clean up, fines, investigation, interrupted production, some compensation perhaps. etc.etc.
The £100 million for the upgraded pipeline a couple of years after the major oil release might represent cutting corners over the years since coming on stream in 1997 or so thus rewarding shareholders instead of carrying out maintenance. This is money which should have been spent wisely over the period.
The penalty is derisory although now we may? be able to look forward to significantly increased fines for such a huge company’s crimes.