NEO Energy, operator of the Buchan Horst license in the UK central North Sea, expects first oil from its Buchan Area redevelopment to be further delayed following a recent Supreme Court ruling.
Britain’s new Labour government plans a consultation on new environmental guidance for oil and gas E&P companies in light of the "Finch" ruling. This requires regulators to consider the impact of hydrocarbon combustion, Scope 3 emissions, in their environmental impact assessment for new projects. The government aims to conclude the consultation process by next spring.
The ruling follows a successful challenge by environmental groups against the development consent issued for the Jackdaw and Rosebank projects in the central North Sea and west of Shetland. The government said it would not challenge the judicial reviews to save taxpayers money.
In response to these developments, NEO and its owner HitecVision have agreed to slow down activities across all of NEO’s UK North Sea area development assets.
As for the Buchan Horst project, the company said it would wait for clarity around the UK regulatory and fiscal framework to assess the full impact. The timing of first oil will therefore be delayed beyond the previously estimated startup of late 2027.
NEO added that the joint venture, which includes Jersey Oil & Gas (JOG) and Serica Energy, would pursue a license extension to continue their technical evaluations, in light of the changes to tax and environmental consents.
JOG CEO Andrew Benitz said, "Whilst demand for hydrocarbons continues during the energy transition, home grown energy is the right solution. A project like Buchan has the potential to produce some of the lowest emission barrels of any project globally.
“Emissions arising from the combustion or use of those hydrocarbons will result in the same emissions as comparable barrels regardless of where they are produced. Home grown energy should always trump imports, creating domestic economic growth, jobs and valuable UK tax receipts."
