AC-2024-LON-002888 - [2025] EWHC 2139 (Admin)

Background

The Gryphon FPSO is owned jointly by Total and Sojitz Energy Development Limited (“Sojitz”) and is operated by Total. In addition to the Gryphon Field (which is also jointly owned by Total and Sojitz), three other neighbouring fields have been tied back to the Gryphon FPSO for the purposes of oil production. These are the Tullich field, the Maclure field and the Ballindalloch field. The claimant has an interest in the Maclure and the Ballindalloch fields of around 8 per cent in each. Total owns the whole of the Tullich field and the remainder of the ownership of the Ballindalloch field. The Maclure field is owned jointly by Total, the claimant, TAQA and Apache.

The Gryphon FPSO was built in 1993 and refurbished following a major incident in 2012. It is permanently moored above an oil field and connected to sub-sea oil and gas infrastructure by flexible pipelines leading to oil and gas treatment equipment which is mounted on its deck. Oil was periodically offloaded having been stored in the FPSO’s cargo tanks. It is retained in position by anchors and mooring lines and is equipped with thrusters to enable it to be faced into the weather, reducing the load on the mooring lines.

The relationship between the owners of the Gryphon FPSO and the owners of the fields who receive the services provided by that infrastructure as a result of being tied back to the Gryphon FPSO is governed by Processing and Operational Services Agreements (“POSAs”) which amongst other issues address how the running costs of the Gryphon FPSO are to be distributed amongst those who use its facilities.

Around April 2021 the owners of the Gryphon FPSO approved a life extension project which involved works taking place to improve the integrity of the Gryphon FPSO and the renewal of its class certification to extend it until November 2027. Following a survey of the Gryphon FPSO, recertification was granted on 15 February 2023 to 15 November 2027.

The owners of the fields are party to a petroleum production licence which is issued by the defendant on behalf of the Crown and which allows the licensee to search for and extract petroleum in a specified area. To develop a field within a licence area the licensee must receive approval of a field development plan from the defendant addressing their proposals for extraction and the likely volumes of petroleum to be extracted.

The various fields identified above have all produced oil (and some gas) from the oil reservoirs that were being exploited. However, once oil production has ceased there is a gas “cap” overlying the oil reservoirs which can be developed as a project for extraction in its own right. A project has been formulated known as the Quad 9 Gas Project (“Q9GP”) for the gas extraction. When gas production commences the reservoir pressures will drop, preventing the extraction of any further oil. At present the ownership of the gas cap currently vests in the same owners as set out above but in different percentage interests. The infrastructure which would be required to produce gas from the gas cap has not been settled upon and in accordance with the current arrangements there would need to be unanimity between the owners on the appropriate configuration of the Q9GP project before it could be progressed.

The Regulatory Framework

Section 1 of the 1998 Act defines “petroleum” as including “any mineral oil or relative hydrocarbon and natural gas existing in its natural condition in strata”. Section 3 contains the power to grant licences to “search and bore for and get petroleum”. Section 9A of the 1998 Act contains what is described as the principal objective and the strategy of the 1998 Act, in particular the maximising of the economic recovery of oil (“MER”) which is described in the following terms: