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

NSTA time and cost, including but not limited to

What cost will the proposed course of action impose on the NSTA (including the opportunity cost of not progressing other important cases/projects)?

Is the potential cost proportionate to the proposed course of action?

Are there adequate responses to carry out the action in a timely manner?

What are the comparative benefits to the Strategy of using those resources in other ways?”

The defendant points out that its supervision of operators is undertaken in aggregate and across all relevant UK waters. In circumstances such as these there is authority to support the proposition that where a regulator has a power, and a discretion as to the exercise of that power, a margin of appreciation will be applied by a court to the exercise of that judgment or discretion when considering whether or not the regulator has acted unlawfully. This reflects the approach taken, for instance, in respect of police resources in R v Chief Constable of Sussex ex Parte International Traders Ferry Ltd [1999] 2 AC 418. It is also reflected in the decision of the Court of Appeal in R (SSE Generation Ltd) v CMA [2022] EWCA Civ 1472; [2022] 4 WLR 115 in the judgment of Green LJ at paragraphs 64 and 65. This approach was adopted by this court in R (on the Application of River Action UK) v Environment Agency and Others [2024] EWHC 1279 at paragraph 126. It follows from this that in determining how to exercise its supervisory jurisdiction the defendant had a discretion and was entitled to exercise that discretion to prioritise resources and deploy them proportionately. Whilst the claimant seeks to draw a distinction between the use of sanctions and the undertaking of regulatory action, the reality is that these activities form part of a continuum and that it was perfectly reasonable for the defendant to take account of its policy in prioritising the supervision of the operators for whom it had responsibility. The judgment which the defendant reached was that the residual oil in the Gryphon area fields were not a priority for proactive supervision, or more specifically the examination of detailed economic modelling to seek to resolve any dispute concerning the modelling produced by the claimant. The evidence which was relied upon by the defendant appears in the narrative of events at several points, where the relatively low volumes of oil remaining to be extracted from the field were observed, underlining the observation by Mr Wheeler that this field was not a priority. Whilst the claimant points out that in email correspondence Mr Brotherton leaves the Tullich oil field out of account, and underestimates the quantities of remaining oil production in the Gryphon area fields as a whole, the evidence from the defendant overall is that they concluded, and continue to be of the view, that in relative terms the volumes of oil in the Gryphon area fields did not justify it being prioritised. This is a conclusion which was clearly open to them on the material before the court.

Applying the relevant approach from the authorities it was a matter for the defendant to determine whether, in the light of the issues it was considering, it was necessary to carry out its own detailed economic modelling relating to when it was appropriate for CoP to be planned. In making that decision the defendant was entitled to take account of the consistently expressed view of various members of staff that as a result of the relatively low potential volumes of oil at stake the field was not a regulatory priority. They were also entitled to take account of the inherent potential for uncertainty in any modelling exercise. In the light of the evidence it is not possible to conclude that the defendant could not rationally reach a conclusion in respect of the section 29 advice without having undertaken detailed economic modelling. They were entitled at this stage of the process to provide advice based upon their view, amongst all circumstances, of the extent of the remaining resource, the attitude of the field operator, their evaluation of the realism of the claimant being able to take over the operation of the Gryphon FPSO and the costs of the decommissioning plan with which they had been presented. There was no illegality in the approach which they took to formulating the advice and the enquiries which they made were lawful in their extent.

The claimant’s further submission is that in exercising its supervisory judgment the defendant misdirected itself as to the requirements of section 9A of the 1998 Act and the Strategy. It must be accepted that both the approach set out by Holgate J in Greenpeace, and also the defendant’s understanding that when considering whether a party has complied with paragraph 2 of the Strategy they must have regard to whether that person has, in taking the steps necessary to secure the maximum value of economically recoverable petroleum, taken appropriate steps to assist in meeting the net zero target, are central to this submission. As Holgate J put it, “the obligation to assist the Secretary of State to meet the net zero target applies in the context of complying with the “principal objective” in section 9A, the MER”. The passages to which the claimant has referred when read in context as pieces of correspondence, and placed in the context of the correspondence read as a whole, do not demonstrate a departure from the approach taken by Holgate J in Greenpeace or an illegitimate prioritisation of the net zero target over and above the requirements of MER. They illustrate simply that the defendant was conscious that the assessment was not solely and exclusively an examination of MER but whether, whilst achieving MER, appropriate steps were being taken to assist the Secretary of State in meeting the net zero target, for instance by seeking to reduce as far as reasonable in the circumstances greenhouse gas emissions from sources such as flaring. As the defendant observes, the question of net zero considerations was undoubtedly relevant to their decision and properly read in context the passages on which the claimant relies show the defendant reflecting the materiality of net zero but not illegitimately treating it as competing with MER in their deliberations.

In short, no error of law can be detected in the decision of the defendant to prioritise its resources in declining to embark upon a detailed modelling exercise in circumstances where they have concluded for clearly articulated reasons that the limited remainder of production from the field was not a priority bearing in mind all of the other calls on their resources. A margin of appreciation needs to be afforded to the defendant exercising its regulatory functions and prioritising the finite resources which it has. The claimant’s suggestion that the defendant failed to understand the requirements of the 1998 Act or the Strategy are not well founded and there was no misdirection in the defendant’s operation of its supervisory powers or its approach to the giving of the section 29 advice. Ground three of JR1 cannot be sustained.

Ground Four: Failure to Consider Material Considerations

The claimant’s more limited submission in relation to ground four is that the section 29 advice makes no reference to MER, and that where MER is referenced in some of the defendant’s internal correspondence, as already noted in respect of ground three, the references impermissibly suggest that net zero is a competing consideration to MER. This ground can be dealt with shortly.

The absence of any reference to MER is by no means dispositive of whether or not the defendant failed to have regard to MER as a material consideration in the section 29 process. The narrative of events which has been set out extensively in the Annex to this judgmentclearly demonstrates that the defendant was frequently engaged in considerations related to forming judgments about MER and expressly identifying that they were seeking to reach conclusions in respect of MER. None of this background can be overlooked in considering the section 29 advice process, and the wider context demonstrates that the defendant was fully alive to MER as a material consideration. The question of the correspondence referred to under ground three has already been addressed and for the reasons given this material does not show any misdirection.

Ground Five: Breach of Tameside Duty

The claimant’s submission is that even if the defendant’s failure to carry out economic analysis of Total’s proposals was not a breach of statutory duty, it was certainly a failure to make suitable and appropriate enquiries in breach of the Tameside duty on the defendant. The relevant principles which can be gleaned from the authorities in respect of the Tameside duty were set out in paragraph 100 of the decision of the Divisional Court in R (on the Application of Plantagenet Alliance Ltd) v Secretary of State for Justice and Others [2014] EWHC 1662 as follows:

The following principles can be gleaned from the authorities:

The obligation upon the decision-maker is only to take such steps to inform himself as are reasonable.

Subject to a Wednesbury challenge, it is for the public body, and not the court to decide upon the manner and intensity of inquiry to be undertaken (R (Khatun) v Newham LBC [2005] QB 37 at paragraph [35], per Laws LJ).

The court should not intervene merely because it considers that further inquiries would have been sensible or desirable. It should intervene only if no reasonable authority could have been satisfied on the basis of the inquiries made that it possessed the information necessary for its decision (per Neill LJ in R (Bayani) v. Kensington and Chelsea Royal LBC (1990) 22 HLR 406).

The court should establish what material was before the authority and should only strike down a decision by the authority not to make further inquiries if no reasonable council possessed of that material could suppose that the inquiries they had made were sufficient (per Schiemann J in R (Costello) v Nottingham City Council (1989) 21 HLR 301; cited with approval by Laws LJ in (R (Khatun) v Newham LBC (supra) at paragraph [35]).

The principle that the decision-maker must call his own attention to considerations relevant to his decision, a duty which in practice may require him to consult outside bodies with a particular knowledge or involvement in the case, does not spring from a duty of procedural fairness to the applicant, but from the Secretary of State’s duty so to inform himself as to arrive at a rational conclusion (per Laws LJ in (R (London Borough of Southwark) v Secretary of State for Education (supra) at page 323D).

The wider the discretion conferred on the Secretary of State, the more important it must be that he has all relevant material to enable him properly to exercise it (R (Venables) v Secretary of State for the Home Department [1998] AC 407 at 466G).”

The claimant’s case is that the Tameside duty required the defendant to undertake an economic analysis of the viability of continued production from the Gryphon FPSO in the light of the dispute which had emerged as to whether or not operations should continue to the end of 2027.

The reality is that the conclusions in relation to grounds three and four also impact upon the viability of ground five. For the reasons which have already been given, the conclusion has been reached that the defendant was not required to undertake that economic analysis in order to properly discharge the statutory requirements of section 29 of the 1998 Act and the other duties which were engaged as a result of the 1998 Act. For those reasons paragraphs 100(2) and (3) of Plantagenet Alliance undermine the claimant’s position in relation to this ground. Given the findings which have been set out above in respect of ground three and four it is not possible to conclude that it was irrational for the defendant to fail to undertake this further economic analysis, or that no reasonable authority in place of the defendant could have been satisfied that it had the information necessary to provide the section 29 advice. As set out above, it is clear from the narrative of events that the view taken by the defendant on the basis of evidence before them was that the Gryphon hub was not a priority and the resources which would have needed to have been deployed to undertake this analysis could not be justified. It was for the defendant to determine the manner and intensity of the enquiry which was required and it is clear from the documentation that an evaluation of whether the economic analysis was required was made and the decision which was reached was one which was rationally open to the defendant. Ground five must therefore be rejected.

Ground Six: Failure to Give Legally Adequate Reasons

The claimant submits that in providing the section 29 advice the defendant, having rejected the submissions by the claimant and preferred those of Total on a number of important matters related to the consistency of decommissioning with MER and the appropriateness of Total’s rejection of the claimant’s offer to operate the Gryphon FPSO, failed to provide adequate reasons which explained to the claimant why those contentions had been rejected and Total’s position preferred. Furthermore the defendant gave different reasons to the affected parties for giving the section 29 advice in the form in which it emerged. In particular, the claimant draws attention to the letter written by Ms Innes to Mr Bates on 16 July 2024 in which she responded to questions which had been raised by Mr Bates in his letter of 12 June 2024 following the issuing of the section 29 advice. In response to these submissions the defendant contends that the reasons which were provided by the defendant to the claimant on 16 July 2024 were both intelligible and adequate and explained to the claimant why the defendant had reached the conclusions which it had. Furthermore the defendant contends that in substance there is no material distinction between the letter which was written to Total setting out the section 29 advice on 6 June 2024 and that which was sent on 16 July 2024.

The duty to give reasons was definitively formulated by Lord Brown in South Bucks DC v Porter (No 2) [2004] 1 WLR 1953 at paragraph 36 and it is unnecessary to set that paragraph out here. It is trite that where reasons are volunteered they must be intelligible and adequate. The reasons set out in the defendant’s letter of 16 July 2024 set out the basis for the conclusions in the section 29 advice in a manner which was clear and legally adequate. The letter explained that the defendant considered Total had demonstrated that it had assessed, but been unable to identify, viable alternatives to decommissioning. In respect of continued use, the letter noted that Total had rejected the claimant’s offer to buy the Gryphon FPSO. The work plan set out in the decommissioning strategy was noted to ensure that the cost of conducting decommissioning would be kept to the minimum reasonably practicable. The reasons given in the letter enabled the claimant to understand why the defendant had given section 29 advice in the form that they had. The defendant did not provide the claimant with the section 29 advice decision at or shortly after the time that it had been issued. However, that does not in and of itself directly impact on the adequacy of the reasoning provided by way of the letter of 16 July 2024. Moreover, whilst in relation to Total’s rejection of the claimant’s offer to purchase the Gryphon FPSO a little more detail is provided in the section 29 advice decision, two points need to be observed. Firstly, it was not necessary for the defendant to give reasons for its reasons and, secondly, that is especially the case in circumstances where Total’s letter of 16 May 2024 had comprehensively set out for the claimant all of the reasons for Total rejecting the offer which they had tabled, which the defendant had obviously accepted was a reasonable stance. In the circumstances it is not possible to conclude that the defendant failed to give adequate reasons for its decision under section 29 or, more pertinently, that the reasons given to the claimant were not legally adequate.

For all of the reasons which have been set out above, each of the grounds on which JR1 has been advanced must be rejected and the application for judicial review in JR1 is without merit.

JR2

Ground One: Section 32 Advice Based on Unlawful Section 29 Advice

The claimant’s contention in relation to ground one of JR2 is that, on the basis that the section 29 advice provided by the defendant was unlawful, this illegality vitiated the section 32 advice which the defendant furnished to OPRED. The conclusion has already been reached that there is no basis to impeach the lawfulness of the section 29 advice, and it follows from this that the foundation for ground one in JR2 has not been established. On this basis the contentions in relation to ground one of JR2 must be rejected.

Ground Two: Predetermination and/or Bias

In support of this ground the claimant relies upon the factors set out in respect of ground one of JR1, and in particular the continued involvement in the process of Ms Wyllie. In addition the claimant relies upon four examples of suggested predetermination and bias. The first involves reference to the defendant’s internal email from Mr Sadeghi to Mr Knight, Ms Wyllie and Mr Brotherton on 9 July 2024 and his reference to being happy “to discuss tactics going forward amongst us”. The claimant contends that, firstly, this illustrates that the defendant was undertaking a concerted effort to thwart the claimant’s desired outcome of continued oil production and, secondly, illustrates the continued heavy involvement of Ms Wyllie in the section 32 process. Secondly, the claimant relies upon the fact that the defendant informed them on 7 November 2024 that it would be sharing a draft of its advice with the claimant “shortly” at a time when it had not even received the necessary economic information. This reference and the evidence generally suggest that significant work on the section 32 advice had already been carried out and that the defendant had already reached a predetermined conclusion without any formal economic analysis.

Thirdly, the claimant relies upon what it characterises as the frequent imposition of entirely unreasonable deadlines for the claimant to input into the section 32 advice and the attempt to exclude the claimant from remedies and protect Total from any claims. For instance, on 17 October 2024 Ms Wyllie set the claimant a deadline of 21 October to provide its detailed information about their proposal. There was no need for this short time frame as OPRED frequently extended the deadline for the response from the defendant. In addition, Total favoured the claimant being given a short deadline for responses. Fourthly, the defendant made further enquiries with Total to clarify elements of the economic analysis but made no such enquiries of the claimant. For instance, the defendant contacted Total to see whether the claimant’s strong production forecast was due to fewer maintenance shutdowns occurring in 2024 which Total incorrectly affirmed and the defendant accepted. No contact in respect of this issue was made with the claimant.

The defendant responds to these submissions by firstly emphasising the independence that was brought to bear on the provision of the section 32 advice. Firstly, Ms Hepworth, who had had minimal involvement in the preparation of the section 29 advice, was commissioned as the lead reviewer responsible for preparing the section 32 advice. She engaged in an iterative process drawing together material from the relevant specialists within the defendant’s various teams. Mr Brooks was identified as the accountable person on the basis that he had not been involved in any stage in the decommissioning of the Gryphon FPSO and so could therefore review the matter afresh. Mr Brooks set aside time to independently review the section 32 advice and took his own soundings, for instance from Mr Moulds on 6 February 2024. The defendant submits that this process would inevitably lead the fair minded and well-informed observer to conclude that there was no risk of apparent predetermination or bias in the process which the defendant adopted. Furthermore, the defendant accepts that Ms Wyllie was involved at various stages of the process addressing questions raised by Ms Hepworth and drawing together responses from, for instance, the economics team and commissioning her team to review and stress test economic analysis from the claimant. She coordinated communication with the claimant, Total and other interested parties during the time when the section 32 advice was prepared. However, the defendant emphasises all of this input was supervised by Ms Hepworth and subject to the independent review by Mr Brooks.

Turning to the four examples relied upon by the claimant, the defendant observes that when placed in context the email of 9 July 2024 from Mr Sadeghi mentioning discussing “tactics going forward” arose in relation to the exchange of emails between Mr Pogson and Mr Knight concerning an exchange of emails which had occurred on 2 July 2024, and the absence of dialogue between the claimant and Total. This email arose in the context of the defendant exercising its stewardship functions over the life cycle of the oil and gas field. In any event, it was perfectly sensible for the defendant to review available tactics in circumstances where they were, as Mr Knight described, in a “bind”.

So far as the second point is concerned, in fact when read in context the reference to contacting the parties “shortly” was in respect of the process for seeking the claimant’s observations on the draft section 32 advice and how the consultation process would work. Moreover, the defendant points out that no complaint was raised by the claimant’s solicitors in respect of the use of this language at the time. The defendant submits in relation to the third example provided by the claimant that, whilst the deadline was set on the basis explained by Ms Wyllie that all of the information being sought should have been available to the claimant, nevertheless the claimant requested and was granted an extension. At no point was the claimant ever refused an extension to a deadline when it asked for one. So far as the final example is concerned, the defendant submits that the reality of the situation was that the defendant was seeking to balance Total’s entitlement to sustaining commercial confidentiality in respect of sensitive information with the need for the claimant to make effective representations on the draft section 32 advice. This is what led to an extensive negotiation about undertakings resulting in an agreement as to their appropriate form.

Having considered these matters, and reviewed the totality of the material and in particular the documentary record, the contention that there is evidence upon which a well-informed and fair minded observer would form the conclusion that the defendant was even apparently reaching a decision which was the subject of predetermination or bias is unsustainable. The reasons for rejecting the claimant’s contentions in respect of JR1 have already been fully set out and need not be repeated. It cannot be accepted that Ms Wyllie was apparently biased in her dealings with the claimant, or that the evidence of her involvement in the section 29 advice process showed apparent predetermination or bias. Her involvement in the 32 advisory process reflects the same professionalism which she brought to bear in supporting the section 29 advisory process.

It is also of significance, as the defendant observes, that entirely different and independent personnel were commissioned with the task of reviewing and preparing the section 32 advice in the form of Ms Hepworth and Mr Brooks, who brought an entirely fresh pair of eyes to bear upon the issue. It cannot be accepted that any of the four examples referred to by the claimant provide any material support to their case. The observations of Mr Sadeghi in his email of 9 July 2024 have to be placed in their proper context, namely that there was a stewardship issue raised by a potential breach of the Strategy arising from the claimant’s request for compensation in excess of a fair market value to exit from the Q9GP project in the form of making it a condition of their exit that the Gryphon FPSO continue in production, and the stalling of any progress which this development had given rise to as recorded in the exchange of emails between Mr Pogson and Mr Knight. In that context it was unsurprising that the defendant was seeking to examine the tactics that they might employ in order to attempt to move matters forward in the interests of their long-term stewardship of the oil and gas field. This email, whether taken in isolation or in the context of the wider narrative, is simply incapable of supporting a credible allegation that the defendant was approaching their task in respect of the section 32 advice from a position of apparent predetermination or bias.

The second example, the use of the word “shortly” in the letter of 7 November 2024, takes that word entirely out of the context in which it was written. As the defendant observes, this adverb related to providing the claimant with information in relation to the consultation process and was not a suggestion that some predetermined outcome for the section 32 advice had been reached. Similarly, the third example is without merit. Whatever may have been the wisdom of setting the deadline which the claimant relies upon, it was not pursued and the claimant was granted an extension and thus it is farfetched to suggest when viewed in the context of the narrative of events that the setting of this deadline bespeaks apparent predetermination or bias by the defendant. The final example, similarly, is of no assistance to the claimant. There plainly needed to be discussion as to the appropriate terms upon which Total’s confidential information could be released to enable the claimant to be fully engaged in the section 32 process. Those negotiations were fruitful and agreed by the claimant. Nothing turns on the defendant seeking further information from Total about Total’s economic analysis nor would the well-informed and fair minded observer be concerned that the making of those enquiries showed that the defendant had apparently already made up their mind or were biased against the claimant.

In addition to these specific examples, consideration has been given to the additional issues raised in paragraph 89 of the claimant’s statement of facts and grounds in JR2 insofar as it is suggested that the retirement of the CoP process in favour of the stewardship procedure demonstrates apparent bias or predetermination. That is a submission which is entirely without merit. The decision reached by the defendant to retire the CoP process for the reasons set out in the narrative of events is a decision which was not challenged at the time and has been carefully explained. Having scrutinised the specific allegations made in paragraph 89 and also at the hearing against the backdrop of the totality of the narrative of events and the specific instances relied upon by the claimant, the contention that in reaching the decision on the section 32 advice the defendant exhibited apparent predetermination or bias is not sustainable.

Ground Three: Flaws in Assessment of Continued Use

Within this ground the claimant relies upon several distinct arguments that there were legal errors in the assessment made by the defendant of the issue of continued use of the Gryphon FPSO within the section 32 advice. It is convenient to deal with each of these separate arguments in turn.

The first contention is that the defendant’s reliance upon societal carbon values in paragraphs 2.11 and 2.12 of the section 32 advice was illegitimate. Societal carbon values are set to reflect the social and economic cost of greenhouse gas emissions to the UK and are different from, for instance, the cost of purchasing a carbon credit in a relevant carbon capping scheme. The claimant observes that the incorporation of the societal cost of carbon values increased the costs of production and therefore accelerated the time for CoP. The claimant contends, firstly, that the definition of “economically recoverable” in the Strategy does not suggest that societal carbon costs will be taken into account in assessing MER but rather that such costs will be taken into account “where relevant”. The claimant notes that the explanatory evidence of Mr Moulds seeks to contend that not only were societal carbon values relevant to his economic analysis in this case, but also that they would be relevant “in any analysis of economic recovery of petroleum undertaken by the economics team”. This suggests an undisclosed policy that contrary to the Strategy consideration of societal carbon values were always required in any economic assessment. This further gives rise to a fettering of discretion by the defendant. The defendant’s reliance upon an explanatory note on the Valuation of Greenhouse Gasses is also misplaced because whilst it states that the societal costs of emissions are an integral component of expected economic value estimates for activities undertaken in the UKCS, this explanatory note is incapable of changing the meaning of the Strategy. Moreover, the approach again exhibits the same misunderstanding of MER by effectively suggesting that the achievement of net zero is an additional and competing objective to MER. Furthermore, the claimant contends that it was irrational for the defendant to include societal carbon values in undertaking this economic evaluation because they are not relevant to when production of petroleum will become uneconomical for a particular individual operator. That is the specific question posed by paragraphs 26 to 28 of the Strategy. The defendant fails to explain why the defendant took the approach which it did.

In response to these submissions the defendant places reliance upon the evidence of Mr Moulds who was responsible for this aspect of the section 32 advice. He deals with the issue of societal carbon values in his witness statement in the following terms:

Given the nature of the economic analysis that the Economics Team is currently requested to undertake (see paragraph 12 above), and in line with my understanding of the NSTA’s obligations as set by the OGA Strategy (as amended in 2021 as described above), it will be relevant in any analysis of economic recoverability of petroleum undertaken by the Economics Team to take into account an estimate of the societal impact of the carbon emissions (not just the UK ETS carbon cost that I explain in paragraph 25 below). This is because the recovery of petroleum has carbon emissions implications, which in turn has societal costs, so those societal costs of carbon emissions are inherently relevant to any economic analysis of the recovery of petroleum. I cannot think of a situation or specific example in which it would not be relevant for the Economics Team to take the societal impact of any change in carbon emissions into account in its analysis of economic recoverability.

This is consistent with HM Treasury Guidance on Appraisal and Evaluation in Central Government (the “Green Book”), which (among other things) requires Government (and by extension therefore the NSTA) to take full account of the impacts of climate change on society in appraising projects and activities [ACM2/018-182]. It is relevant to calculate the societal value of emissions in this way where there are expected to be quantifiable, non-zero changes (increases or reductions) in the volume of emissions as a result of a proposed project or activity. I am not aware of any explicit definition or guidance produced by the NSTA on the use of this term or its application to activities undertaken by relevant persons. In my view that is because it is intended to be interpreted as described here, in that the societal carbon costs will always be considered relevant where there are changes in the volume of emissions. Failure to include these societal carbon costs in economic appraisals would therefore not provide a robust assessment of the full impact of production related activities, which could in turn lead to incorrect conclusions on the net societal economic value of projects or options therein. To explain what I mean by the societal impact or societal costs of carbon emissions, I refer to the OGA Plan to reduce UKCS10 greenhouse gas emissions, which was published on 27 March 2024 (the “OGA Plan”) [ACM2/183-196], and to which I also referred in paragraph 8 of my First Witness Statement. The OGA Plan explains, at paragraph 7, that “It is important that industry recognises that the full societal costs of emissions are markedly larger than those that they incur directly through market-based carbon prices. In preserving their social licence to operate, relevant persons should therefore also consider as one factor the societal costs of emissions in their overall decision making.””

The defendant relies upon this evidence to demonstrate that Mr Moulds had a clear justification for the approach which he took to this issue on the basis that, as he explains, if an activity involved a change in carbon emissions it would generally be relevant to assess the value of that activity from a UK-wide perspective and for the UK. If another approach were taken those costs would simply be left out of account, resulting in the overvaluation of the petroleum examined. The defendant submits that it did not do anything with regard to societal carbon values to suggest that it considered net zero to be an additional or competing objective to MER. By taking account of the societal costs of carbon the defendant produced a fuller and more accurate assessment of the value to the UK of extracting the petroleum and in doing so assisted the Secretary of State to achieve net zero “because an emission-generating activity, the full societal cost of which outweighed its benefits, i.e., which was a net negative value proposition for the UK, would not continue”. It was not irrational for the defendant to consider societal carbon values because the task was to assess whether the extraction of petroleum was uneconomic from a UK-wide perspective, and if it was there would be no question of the operator having decided not to maximise the economic recovery of petroleum and the question of divestment pursuant to paragraphs 26 to 30 of the defendant’s strategy would not arise.

Prior to reaching a conclusion on these arguments it is important to emphasise the legal context in which these and the other sub-grounds under ground three arise. They are, in essence, allegations made pursuant to Wednesbury principles, including allegations related to the Tameside duty. Thus, subject to the Tameside duty, it was for the defendant to determine what was relevant information and the manner and intensity of the enquiry to be undertaken in reaching its conclusions on the advice: see R (Pharmaceutical Services Negotiating Committee) v Secretary of State for Health [2018] EWCA Civ 1925 at paragraphs 55 to 57. The case of R (Mott) v Environment Agency [2016] WLR 4338 was concerned with questions relating to the adequacy of a model which was being used to evaluate the extent to which salmon caught in the Severn Estuary Fisheries included salmon which had originated in the River Wye, with consequential impacts on the spawning targets for the Wye fishery. Arguments were raised in relation to the rationality of the modelling underpinning the Environment Agency’s decision. In respect of these arguments, Beatson LJ observed as follows at paragraphs 77 and 78 of his judgment:

“77 More broadly, in the Abolition of Vivisection case May LJ stated at para 1 that scientific analysis “is not immune from lawyers’ analysis” but a reviewing court must be “careful not to substitute its own inexpert view of the science for a tenable expert opinion”. A reviewing court should be very slow to conclude that the expert and experienced decision-maker assigned the task by statute has reached a perverse scientific conclusion. May LJ also stated at para 15 that the assessment of the effect on animals of tests which were part of research into the functioning of the human brain made when a project is licenced is a predictive assessment. The dividing lines between the different categories of effect “are more a matter of scientific judgment than legal analysis”. So too, in my judgment is the adequacy of a model used to estimate percentages of fish originating from a given river or whether a fishery exploits “predominantly mixed stocks”.

78 In the present case the decisions were based on three principal factors. First, the agency s assessment on the basis of the shortfall in egg deposition that the salmon fishery in the Wye is at risk of becoming unsustainable, which was not challenged. Secondly, the views of the researchers and the agency, reflecting a broad scientific consensus, that salmon return to their rivers of origin to spawn. Thirdly, the genetic data gathered from the 55 fish taken from the estuary and the ONCOR, GeneClass2 and cBayes models used in the Exeter report to estimate their rivers of origin. The decisions were thus made against an unchallenged assessment as to the risk to the Wye and a background assumption on which there is scientific consensus that salmon return to their river of origin to spawn. The decisions were then the result of an amalgam of assessments which are in part factual and in part predictive in nature. They also involved consideration of other factors, such as how to balance the interests of those primarily affected with the wider public interest, and how factors such as the “heritage installation” aspect should be factored into the decision and are in this sense “polycentric”. I respectfully agree with the statement of Lightman J in Ex p Cellcom Ltd [1999] ECC 314, para 26 that “if . . . the court should be very slow to impugn decisions of fact made by an expert and experienced decision-maker, it must surely be even slower to impugn his educated prophecies and predictions for the future”.”

With these principles in mind it is clear that there is no legal error in the approach which was taken by the defendant in respect of societal carbon values. Whilst the claimant seeks to suggest that the defendant, through Mr Moulds, failed to properly understand that there was a discretion as to whether or not such costs were relevant in the economic analysis, the defendant is entitled to rely upon the evidence of Mr Moulds which explains and justifies why they were in fact relevant to the exercise which he was undertaking. The discretion was exercised to take them into account for the reasons Mr Moulds gives. Mr Moulds’ evidence provides a clear and adequate justification for the approach the defendant took in respect of the inclusion of this consideration. This is not evidence of an undisclosed policy but rather evidence which identifies why, applying the definition provided by the Strategy for “economically recoverable”, there was a sound basis for including these costs in an assessment which, pursuant to the Strategy, was relevant to the assessment of the value of the activity to the UK as a whole. This context dispenses with the claimant’s argument that the exercise should have been focused on what was uneconomical for a particular operator: the defendant was seeking to assess the issue from a UK-wide perspective. For the reasons set out by the defendant, the approach which was being taken in this case properly reflected the role of achieving net zero within the context of assessing MER and without regarding net zero as some additional or competing objective. In any event, akin to the case of Mott, the defendant was an expert authority assigned by statute with the task of making this assessment and in doing so they were entitled to rely upon the expertise and independence of Mr Moulds. The claimant’s suggestion that they had taken into account a wholly erroneous consideration in undertaking the economic assessment is entirely unpersuasive.

The second aspect of ground three is the contention that the defendant failed to properly analyse Total’s economic information. In particular, the claimant contends that the section 32 advice contained the legal error that it relied upon production forecasts from 2022 which were out of date, especially since the defendant now has actual data for the Gryphon area fields from 2022 through to 2024. It was therefore illogical and irrational to use the figures from the 2022 forecast. The claimant contends the problem is compounded on the basis that the 2022 forecast was used on the advice of Ms Wyllie who assumed that the 2022 data was more representative because operators nearing CoP typically reduced maintenance and therefore maintenance pitstops. As a consequence there would be increased oil production. These assumptions are said to be irrational as they would have ignored the possibility that increased production could be as a result of better than expected performance or optimised reservoir management. Furthermore, the claimant relies upon the fact that, of the three scenarios modelled by the defendant in the section 32 advice, all three indicated that CoP by the end of 2025 would be reasonable and only scenario A supported CoP at the end of 2024.

The defendant responds to these submissions by observing that the defendant’s obligation is to act in accordance with the Strategy and the central obligation which required that “relevant persons” (that is Total) should maximise the economic recovery of petroleum. Total had estimated the CoP date in late-2022/early-2023 and the conclusion that the defendant had reached was that it was appropriate for Total to have done so bearing in mind the data available to it at that time and thus to have planned for CoP accordingly. This was particularly the case since, as observed in paragraph 2.16 of the section 32 advice, the decision Total reached aligned with the stewardship expectations to plan for an orderly transition from late-life operation of infrastructure through CoP into decommissioning to avoid reactive decommissioning. This is a key consideration in delivering the central obligation. This conclusion, the defendant submits, cannot be sensibly challenged on the basis of the material before the defendant. Furthermore, the defendant contends that the effect of the claimant’s approach would be that a relevant person would have to continuously review and potentially reverse a decision to CoP dependent on an iterative examination of the available data and that that is not a reasonable approach to the stewardship of the oil fields for which the defendant is the expert regulator.

It follows from the defendant’s contentions that Ms Wyllie’s position was not the only reason why the defendant considered it appropriate to use data from late-2022/early-2023, albeit that her concerns were legitimate and provided a further reason why it was appropriate to consider the forecasts produced at the time when Total made their assessment. In relation to the outputs of the modelling the defendant observes that scenario A, which replicated Total’s assessment at the time of its decision, was the most material to the defendant’s judgment and supported the conclusion which Total had reached. As to scenario B, that suggested that the hub would only have a “marginally positive net value in 2025 (approximately £12 million)” and Mr Moulds explains in his evidence that it is reasonable for an operator to cease production before the year in which the net economic value of the hub would become marginal to avoid the risk of carrying out loss-making activity. The most favourable scenario from the claimant’s perspective, scenario C, only predicted a net value in 2025 of £29 million and was in any event based on price data from 2024 which was not available to Total at the time of making their assessment. In the light of inherent uncertainty in respect of any modelling, the defendant’s conclusion was reasonable.

In evaluating these submissions it is once again necessary to have regard to the principles set out in Pharmaceutical Services Negotiating Committee and Mott. This ground is centrally dependent upon the choice of inputs which was made by the defendant for the purposes of the various modelled scenarios and relates to a modelling exercise undertaken by an expert economic analyst. The explanation provided by the defendant founded upon paragraph 2.16 of the section 32 advice fully explains the propriety of taking the forecasts from late-2022/early-2023 as the basis of the undertaking of the modelling of the question of whether or not it was appropriate for Total to make the decision to CoP at the time when that conclusion was reached. Again, the approach to the exercise, taking account of the circumstances at the time when the decision to CoP was reached, was undoubtedly a reasonable approach to the defendant’s exercise of its stewardship responsibilities for the oil fields in the basin. As the expert regulator, the defendant was entitled to assess the question of Total’s compliance with the central obligation by asking whether or not the decision to cease production and decommission the FPSO was reasonable on the data available to it at the time when the decision was made. Further, the submission that the claimant’s suggestion of revisiting and reevaluating the decision to CoP after it had been made would create unnecessary uncertainty in a decision-making process which is lengthy, complex and requires investment is obviously reasonable and appropriate. On this basis as the defendant observes, the opinions of Ms Wyllie as to the possibility that production might be higher in recent times was far from the only reason why the defendant used the data from late late-2022/early-2023. It was not the justification for the use of that data but, as the defendant observes, her assessment was a further reason for the decision which was taken in respect of the data to be used.

The claimant’s final submissions in relation to the scenarios face the difficulty that for the reasons given, for instance in paragraphs 2.17 and 2.27 of the section 32 advice, what the claimant was engaged with was undertaking a judgment upon the conclusion of a range of modelling exercises which were themselves assessments subject to inherent modelling uncertainties. Based on the outcomes of the modelling exercise it is simply not possible for the claimant to demonstrate that the judgments which the defendant reached in this inevitably complex assessment were the subject of legal error as suggested.

The third issue raised under ground three by the claimant is that the defendant’s treatment of future integrity issues to the Gryphon FPSO was unlawful. The claimant draws attention to paragraph 2.19 of the section 32 advice which has been set out above. The claimant complains, firstly, that the defendant’s view of possible integrity issues was based on nothing more than an assumption from Ms Wyllie that as an asset comes to the end of its life it can experience significant incidents or outages. This is an assumption which was not based on any attempt to quantify the potential costs of any issues or their frequency in circumstances where Ms Wyllie accepts she would not normally be reviewing the operation and performance of individual FPSOs on a regular basis. Secondly, it was wrong for the defendant to rely upon notices served by the Health and Safety Executive in paragraph 2.18 of the section 32 advice since the claimant had observed that these were due to the shortcomings in Total’s operating procedures and maintenance practices, and not due to issues with the Gryphon FPSO’s integrity in circumstances where it had been recently certified for continued use until November 2027. Thirdly, the comparison between the Gryphon FPSO’s emissions with other floating assets was misconceived since there were other UKCS fields with significantly higher emissions. Fourthly, the analysis produced by the defendant appears to have proceeded on the assumption that the Strategy requires operators to achieve emissions reductions which is incorrect. There is no mandatory requirement for investment in emissions reductions within the Strategy or elsewhere, thus this was a misinterpretation of the Strategy or irrational. The Gryphon FPSO had the relevant emissions consents in place to operate successfully throughout 2024 and 2025.

In response to these submissions the defendant observes that Ms Wyllie’s judgment was based on her experience that as an asset came to the end of its life it could experience significant incidents or outages. This was a view also endorsed by Mr Brooks who took the same view based on his own experience. The defendant submits that this part of the section 32 advice related to outages and costs which were bound to be, of their very nature, unpredictable and that the defendant was reasonably entitled to observe, based on its regulatory experience, that were such risks to materialise they would have an adverse impact on the economic evaluation. The reference to the Health and Safety Executive improvement notices simply illustrated that unplanned works resulting from the notices was the type of risk that the advice was concerned with. There was no need for the defendant to attempt to quantify these risks and the claimant provides no mechanism whereby they might have done so. It was further reasonable for the defendant to take into account the expectation that the operator of the Gryphon FPSO would be expected to take steps to reduce the relatively high emissions to which it was giving rise. This intervention would require significant investment and was a further element of unaccounted for cost which it was reasonable for the defendant to take into account. The criticism made by the claimant that reduction of emissions is not a mandatory requirement misunderstands the tenor of the section 32 advice. It is accepted that there is no explicit requirement to reduce emissions but the defendant would expect relevant persons in compliance with the central obligation to be seeking to make reductions in emissions in order to assist the Secretary of State achieve net zero within the context of MER. Finally, it was not irrational for the defendant to observe and take account of the fact that the Gryphon FPSO was the worst performing floating asset in terms of emissions.

The conclusions in respect of these submission are as follows. There could be no doubt, based on uncontradicted factual material, that the Gryphon FPSO was an ageing asset. It was not irrational for the defendant to have taken this into account. In assessing the claimant’s submissions the overarching principles that have already been set out above need again to be carefully observed. The views expressed by Ms Wyllie were, in context, an exercise of judgment based upon her regulatory experience. They were views which it is apparent were shared by Mr Brooks. He sets out in his evidence that in reviewing the draft section 32 advice combined with his experience of late-life assets he “understood the operational downside risks that can occur with an older asset such as the Gryphon FPSO”. The claimant’s assertion that this is a pessimistic assumption which is not quantified in terms of costs or the kinds of issues involved is a long way from demonstrating that the court should conclude that the judgment of the extremely experienced officials engaged by the defendant were so erroneous or misconceived or based upon irrelevant considerations that the court should intervene to condemn their judgment and the section 32 advice as irrational. In a similar way, the reference to the improvement notices, read in the context of the section 32 advice, was clearly identifying that unplanned works had been a feature of the operation of the Gryphon FPSO. The failure to attempt to quantify either the risks, or the nature of the works that might arise or their cost was a product of the defendant exercising its own judgment as to what was necessary for the purposes of the task which they were considering in giving the section 32 advice. It was not unlawful for them to offer the views which they did without undertaking some kind of quantification exercise.

The claimant’s point in relation to their alleged flawed comparison between the Gryphon FPSO and other floating assets in terms of its emission performance is of no assistance. Within paragraph 2.19 of the section 32 advice the defendant was simply making a relevant comparison between the Gryphon FPSO and other floating assets which was pertinent to supporting the view that they had taken as to the cause of this and the likely risks of future costs arising. Within his evidence Mr Pogson counters this comparison by contending that if UKCS assets are considered as a whole, the Gryphon FPSO only contributed 4.4 per cent of the total central and northern North Sea emissions and is nowhere near the top of the analysis of all flaring assets. However, again, that is not the comparison that the defendant was making to illustrate the concern that of assets of its type, as a result of its age, it was potentially prone to future incidents, giving rise to costs. Taking account of that was entirely legitimate.

The claimant’s suggestion that the section 32 advice illegitimately sought to suggest that there was a mandatory requirement for an operator to achieve year on year emissions reduction is to misread and misunderstand the section 32 advice which does not suggest that there is any such explicit requirement. The point that was being made was that any kind of works to assist the central obligation and coincidentally assist the Secretary of State in achieving net zero was a further cost not specifically provided for in either Total or the claimant’s costs forecasts. In summary, therefore, there is no substance in the complaints raised by the claimant in relation to this issue.

The fourth element of the claimant’s ground three is their concern in relation to the defendant’s treatment of the claimant’s economic analysis submitted in the context of the section 32 advisory process. Three issues are relied upon. Firstly, the defendant rejected Nobel’s production profiles on the basis that, as set out above, Total’s 2022 forecasts should be preferred for the reasons already articulated in respect of the second element of ground three. This approach should be rejected. Secondly, as is now clear from the narrative set out in the Annex, the defendant’s assessment of opex in the section 32 advice was flawed. It appears that Ms Wyllie accepted the stewardship survey information provided by Total without question, leading to her applying pessimistic assumptions and inappropriate opex information being deployed in the modelling exercises. Thirdly, in relation to emissions, the profile relied upon by the claimant was rejected on the basis that it was markedly lower than the Total profile supplied in the UKSS 2022 and observed historical performance. The defendant did not accept the lower emission profile as there was no plan or investment profile to enable it to be achieved. The claimant complains that there is no explanation as to why Total’s profiles are to be preferred and why the claimant’s emissions profiles should not be deployed.

In response to these submissions the defendant relies upon its earlier contentions in respect of the second theme of ground three to the effect that it was reasonable for the defendant, when exercising its regulatory judgment, to prefer the data which was current at the time when the assessment of CoP was made and unaffected by any reduced maintenance strategy. Whilst the claimant relies upon evidence by Mr Phillip Harries, who is a consultant engaged by the claimant to provide technical studies and services in relation to, amongst other matters, field performance evaluation and reservoir management advice, the defendant points out that his evidence does not suggest that the claimant’s more favourable production profile was not influenced by the confounding factor of reduced maintenance in the period following a decision to CoP.

Turning to the question of opex the defendant accepts that the analysis which was set out in paragraphs 2.23 and 2.25 of the section 32 advice was flawed and Ms Wyllie was wrong to conclude that the opex data relied upon by the claimant and Total was artificially low because of reduced maintenance associated with imminent CoP. She had been misled by the manner in which Total had completed its 2022 stewardship survey. In any event, having conceded that a mistake had been made, the defendant addressed this in particular by the review and reassessment of the section 32 advice and its verification by Mr Brooks leading to the further advice to OPRED dated 13 May 2025. Thus, although an error had been made it was, in the defendant’s submission, immaterial. Firstly because it was appropriate to evaluate Total’s assessment of the CoP date by reference to the data available to it when that assessment was made rather than data produced with hindsight. Secondly because in any event the advice has been conscientiously reconsidered and reissued leading to no material difference in the advice to OPRED as to the question of whether or not CoP by the end of 2024 was a reasonable decision. Finally in respect of emissions the defendant contends that the conclusion which it reached in paragraph 2.26 as to the difference between the emissions profile submitted by the claimant and that supplied by Total in the UKSS 2022 is adequately reasoned and set out in the decision and represents a rational expert regulatory judgment.

Having evaluated these submissions the conclusion must be that the claimant’s submissions cannot succeed. The issues raised by the claimant in respect of the first issue, namely whether the defendant was correct to use the 2022 production forecasts, has already been largely engaged with above. For the reasons already given, the approach of the defendant was one which was reasonable and appropriate. The conclusions formed by the defendant in relation to the economic analysis preferred an approach based upon the data which was available to Total at the time when they reached their decision to CoP at the end of 2024. This was a judgment which was open to them in exercising their supervisory jurisdiction. Whilst the evidence of Mr Harries has been noted above, it is important to point out that the judicial review procedure is simply not capable of resolving a detailed scientific dispute as to the correct production forecasts to be used in a modelling exercise for this resource. Within these proceedings there was no scope (nor, correctly, any application) for oral evidence and cross examination, and the issue of the accuracy of production forecasts and which production forecasts should be favoured is one about which no doubt suitably qualified experts can reasonably disagree. These circumstances illustrate the importance of the public law principles set out, for instance, in the case of Mott. Technical disputes of this kind will be difficult to turn into genuine public law errors, in particular when the case concerns the conclusions of a specialist regulator with access to its own expert advice.

Turning to the second criticism in relation to the opex data, the error which arose in the defendant’s advice has been accepted and corrected. This was a responsible stance to take which has led to a further reconsideration of the basis upon which the advice to OPRED was provided. It has, however, not led to any change in the substance of the advice to OPRED, and so whilst there was undoubtedly a mistake in the first issue of the advice, that mistake has been re-examined and resolved in the further decision of 13 May 2025. Finally, so far as emissions are concerned, this is another example of the presentation of alternative sets of scientific or engineering forecasts where a regulator has had to exercise its expert judgment as to which is the data set that provides the sounder basis for reaching a decision. The defendant’s reasons for using the emissions profiles which they did are provided in paragraph 2.26 of the section 32 advice, and it was reasonable for the defendant to observe that there was no planned investment which might lead to lower cost carbon estimates in the analysis. The claimant has failed to demonstrate in respect of any of the criticisms of the economic analysis that it has put forward that the defendant has behaved irrationally or unlawfully.

The fifth element of the claimant’s case in relation to ground three is the contention that the defendant erred in law in relying upon Total’s purported compliance with its stewardship obligation. This contention is founded upon paragraph 2.16 of the section 32 advice which is set out above and provides as follows:

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.”

The claimant contends that it must be assumed from the fact that the defendant saw fit to mention Total’s stewardship obligations that the defendant was reliant upon the assumption that those stewardship obligations had been fulfilled. The claimant submits such an assumption would be incorrect and unlawful because the stewardship obligation in SE10 requires operators to plan for a six-year glide path to CoP which has not occurred. Insofar as the defendant suggests that the statement simply explains why it was reasonable for Total to have planned for CoP based on 2022 data, this does not excuse the defendant from being required to undertake its own assessment based on accurate and up to date data. This point further illustrates how the defendant’s premature support for CoP has become, in the claimant’s submissions, a self-fulfilling prophecy.

In response to these submissions the defendant observes that the claimant has misinterpreted paragraph 2.16 of the section 32 advice which was simply expressing the view that it was appropriate for Total to use the data available to it in late-2022/early-2023 when making its assessments because of the need for a planned and orderly transition “from late life operation through CoP into decommissioning”. The approach was, therefore, “aligned” with stewardship expectations. The defendant submits that it was not asserting in this paragraph that it had accepted Total had complied with SE10 and nor was it purporting to rely upon any such suggested compliance.

When paragraph 2.16 is read in the context of the section 32 advice as a whole, and approached bearing in mind the nature of this document, it is obvious that the defendant’s submissions are correct. The second sentence of the paragraph is merely making an observation that taking the data from late-2022/early-2023 and planning for CoP on that basis was aligned or consistent with SE10 given the encouragement that the stewardship expectation gives for a planned and orderly transition from late life operation via CoP and into decommissioning so as to avoid reactive decommissioning with its attendant costs and risks. The paragraph was not suggesting that the defendant accepted that Total had complied with the stewardship obligations, and so the premise of the claimant’s argument in respect of this point is not made out.

Having considered each of the ways in which the claimant has put its case in respect of ground three, the appropriate conclusion is that none of its arguments are made out nor do they demonstrate any error of law in the section 32 advice decision that the defendant reached.

Ground Four: Flaws in the Defendant’s Approach to Divestment under Paragraphs 26 to 30 of the Strategy

This ground focuses upon paragraphs 2.34 to 2.53 of the section 32 advice in which the defendant addressed the questions arising from the application of paragraphs 26 to 30 of the Strategy. The claimant disputes the defendant’s contention that the defendant was not obliged to provide OPRED with advice in connection with these issues. The claimant goes on to make a number of submissions about why the defendant’s approach was unlawful. Firstly, at paragraph 2.37 of the section 32 advice the defendant asserted that, under the claimant’s proposal, ownership of the Gryphon FPSO would revert back to Total after CoP for Total to decommission and further states that Total considered this to be unacceptable. The claimant contends that at paragraph 2.38 paragraph 6 of the claimant’s proposal, which is set out, provides an alternative proposal to ownership of the FPSO reverting back to Total and thus paragraph 2.37 contained a clear and material error of fact which was also an error of law. Secondly, at paragraph 2.41 the defendant records Total’s position that reputational and financial risks associated with transferring the Gryphon FPSO were unacceptable without having undertaken any testing or interrogation in respect of that position. The claimant contends this is a further illustration of a pre-determined and/or biased view being brought to bear by the defendant.

Thirdly, at paragraph 2.44 the defendant concluded that there was no likelihood for a commercial transaction to be agreed between Nobel and Total for the purchase of the Gryphon FPSO, but the claimant submits that this was not relevant since Total was under an obligation under the Strategy which required it to divest that asset where there was economically recoverable petroleum. Fourthly, the section 32 advice did not include any conclusion that the claimant was not a technically or financially competent person, and these are the only requirements specified in paragraphs 26 and 28 of the Strategy. The refusal of Total to enter into an agreement was irrelevant to paragraphs 26 and 28 of the Strategy and this approach by the defendant again betrayed their bias and predetermination. Finally, the suggestion at paragraph 2.49 of the section 32 advice that there was no specificity to the claimant’s proposal was disingenuous and further evidence of bias and predetermination in the light of the fact that Mr Pogson had explained that the claimant’s offer was as specific as it could be given Total’s point blank unwillingness to engage.

In response to these submissions the defendant observes that its primary task was to advise OPRED on “alternatives to abandoning or decommissioning the installation or pipeline, such as reusing or preserving it”, not to advise on whether Total had complied with paragraphs 26 to 28 of the Strategy which appears to be the focus of this ground. The defendant had already concluded that paragraphs 26 to 30 of the Strategy were not applicable on the basis that the relevant person, namely Total, had not decided not to ensure or pursue MER. Given that the defendant had concluded that a CoP at the end of 2024 was compliant with the central obligation in respect of MER, paragraphs 26 to 30 were not applicable. What the section 32 advice went on to undertake was an examination of the evidence in the counterfactual circumstance that paragraphs 26 to 30 were applicable.

In respect of the allegations concerning paragraph 2.37 of the section 32 advice, the defendant points out that reading that paragraph in the context of the other paragraphs, including paragraphs 2.38 to 2.44, all that the defendant was doing in that paragraph was to set out the earlier proposal which the claimant had made to Total, and thereafter set it in the context of subsequent proposals, and Total’s attitude to them. As for paragraph 2.41 of the section 32 advice all that the defendant was doing at that point in the document was identifying Total’s subjective position in relation to the offer. This was an observation which was made on the way to the defendant’s own conclusions in paragraph 2.44 of the section 32 advice. If the defendant had considered the claimant’s proposal to be realistic it would not have been discounted simply because it was rejected by Total. That issue did not arise because the defendant did not consider the claimant’s proposal to be realistic for the reasons that were set out in the advice. The claimant’s criticism of paragraph 2.44 is misplaced since in circumstances where paragraphs 26 to 30 of the Strategy did not apply, the sole issue to be engaged with was whether there were alternatives to abandonment or decommissioning and an unrealistic and non-viable proposal could not reasonably be regarded as such an alternative.

The defendant submits that the claimant’s comments upon the absence of any conclusion that they were not a technically or financially competent person is of no assistance to their arguments. Firstly, paragraphs 26 and 28 of the Strategy were not engaged. Even if they were, it is not open to the claimant to submit that Total was required to divest itself of the Gryphon FPSO to a technically and financially competent person on any terms that person proposed. Paragraph 29(a) of the Strategy makes clear that the relevant person in the circumstances is only entitled to demand “fair market value” and “reasonable terms and conditions”. For the reasons which are set out in the section 32 advice, Total did not consider the terms and conditions of the claimant’s proposal to be reasonable, and again for reasons which are set out, the defendant also concluded that Total’s position was reasonable. Finally, the defendant responds to the claimant’s criticism of the suggestion that there was no specificity in the claimant’s proposal by referring to the detail set out in the section 32 advice about the significant steps, both regulatory and commercial, that could have been taken by the claimant without Total’s cooperation to demonstrate that their proposals were realistic but which they failed to undertake.

The starting point for considering and forming conclusions about these rival submissions is to assess the question of the applicability of paragraphs 26 to 30 of the Strategy. Those paragraphs appear under the heading “Actions where relevant persons decide not to ensure Maximum Economic Recovery”. It is clear that the defendant had formed the conclusion following the analysis set out in both the section 32 advice and the narrative of events that Total were not a relevant person who had decided not to ensure MER. Indeed, the conclusion which they reached was that CoP at the end of 2024 was MER compliant and consistent with the central obligation. The defendant’s submission that paragraphs 26 to 30 were not applicable, and that as a consequence the principal focus of their advice to OPRED needed to be on the question of whether or not there were alternatives to abandoning or decommissioning the installation such as reuse or preservation, is correct.

The approach taken in paragraph 2.35 of the section 32 advice reflects a judgment which on the facts was clearly open to the defendant. The section 32 advice needs to be read, as has been already observed, in context and as a whole, in the light of the nature of the document which it comprises. When that is undertaken it is clear that it is a misreading of the document to suggest that paragraph 2.37 contains a material error of fact. All that paragraph is doing is setting out a particular stage in the discussion of the various offers made by the claimant to Total to take over the operation of the Gryphon FPSO. The point relies on a partial and unfair reading of the section 32 advice and is without merit. Again, as the defendant submits, paragraph 2.41 when read fairly and in context is simply recording Total’s position in response to the claimant’s offer. There is nothing in this paragraph to suggest that if, independently of Total’s view, the defendant had regarded the claimant’s proposal to be realistic it would not have concluded that this was the case. Whilst the claimant criticises paragraph 2.44 of the advice and its conclusion that there was no likelihood of a commercial transaction being agreed between the claimant and Total for the purchase of the Gryphon FPSO on the basis that this was an irrelevant conclusion as Total were required to divest under the OGA, this submission overlooks the conclusion that the defendant reached (reasoned in paragraphs 2.45 to 2.49 of the advice) that the claimant’s proposal was neither realistic nor viable.

Similar considerations apply to the claimant’s criticism in respect of the absence of any conclusion the claimant was not a technically or financially competent person. Leaving aside the fact that the defendant had concluded that paragraphs 26 to 30 did not apply, the defendant is entitled to draw attention to the fact that even were the claimant to be a technically and financially competent person, the Strategy does not require the relevant person to divest on any terms whatsoever. Paragraph 29(a) of the Strategy is clear that a relevant person in these circumstances is entitled to demand fair market value and reasonable terms and conditions. Again, in the paragraphs from 2.44 through to 2.49 the defendant made clear the reasons why Total’s position was reasonable. These were all conclusions reached as a matter of judgment on the basis of the material presented to the defendant which were reasonably open to the defendant.

Finally, in respect of the absence of specificity, it is very clear from the advice that there were a significant number of steps which the defendant considered the claimant could have taken in the absence of cooperation from Total which would have reinforced the conclusion that they were presenting a realistic proposal for the transfer of ownership and operation of the Gryphon FPSO. Paragraphs 2.45 and the first paragraph 2.46 address the absence of necessary commercial arrangements and agreements being in place; the second paragraph 2.46 and 2.47 deal with the absence of regulatory requirements; paragraph 2.49 sets out the requirements for field operatorship which would need to be satisfied but which had simply not been addressed. In all of these circumstances it was clearly open to the defendant to conclude that there was an absence of specificity in the claimant’s proposal irrespective of the extent to which Total may have engaged in promoting the transaction. Ground four is therefore to be dismissed.

Ground Five: Flaws in the Defendant’s Treatment of Decommissioning Cost Minimisation

The claimant relies upon section 32(7)(b) of the 1998 Act which requires the defendant to advise as to whether Total had complied with this obligation to frame its decommissioning programme so as to ensure that the cost of carrying it out was kept to a minimum. The claimant points out that Total decided to cease production at the Gryphon FPSO, and after that decision entered into contracts referred to in the section 32 advice in relation to the decommissioning process. These contracts were time-sensitive, including “regret” costs, and the contracts were entered into prior to approval of the draft decommissioning plan being obtained. The claimant adverts to evidence offered in JR1 that the cost of keeping the Gryphon FPSO on station after CoP and pending approval of the decommissioning plan are £4,161,616 per month excluding additional contractual losses which might arise by regulatory approval being further delayed. The defendant in its consideration of the issue of decommissioning costs in section 3 of the section 32 advice did not take account of the actual CoP costs which were being incurred principally as a result of CoP preceding any decommissioning approval. It is submitted by the claimant that this is irrational on the basis that the defendant’s own stewardship expectation requires consent to the decommissioning plan to be obtained at least two years prior to CoP, and states that binding contracts should not be entered into until relevant regulatory approvals have been obtained. The defendant’s submission that its only requirement is to consider whether costs are being kept to the minimum reasonably practicable in the circumstances which include the acceleration of CoP is perverse as it enabled Total to create a set of circumstances in which it would incur unnecessary costs, but which enable it to have the benefit of those circumstances when considering whether costs have been kept to a minimum.

The defendant responds to these submissions by pointing out that Ms Hepworth, who it will be recalled compiled the material for the section 32 advice, was not obliged to take account of the figure of £4,161,616 per month as she was assessing the framing of the draft decommissioning plan and, in any event, this figure as she explains in her evidence to the court is consistent with the post-CoP running cost figures which were included in the draft decommissioning plan. Secondly, the defendant observes that whilst it is the defendant’s general expectation that OPRED’s approval will be obtained before CoP it is recognised, for instance in Ms Hepworth’s evidence, that this may not always prove to be possible. In any event the stewardship expectation in SE10 does not require that binding contracts should not be entered into until relevant regulatory approvals have been obtained, but rather sets out a “high-level ambition” that the decommissioning plan should be reviewed and approved by OPRED two years prior to CoP during the early decommissioning planning phase, and that contracts be awarded in the two years prior to CoP during late decommissioning planning. However, compression of the timetable due to acceleration of a CoP date is not uncommon, and where it occurs the defendant works with the operator within that timescale. The reality is that a decommissioning plan can only be framed so as to ensure costs are kept to the minimum reasonably practicable in the circumstances in which they arise, and in this case the circumstances were that the CoP date had been brought forward, contracts entered into and production ended. Whether the costs of a decommissioning plan have been kept to the minimum reasonably practicable in the circumstances can only be assessed on the basis of the actual facts, not on the basis of a counterfactual in which circumstances giving rise to the relevant post-CoP running costs and regret costs would not exist.

Having received and considered these submissions, there does not appear to be any substance in the claimant’s contentions. So far as the complaint raised by the claimant in respect of the stewardship expectation, for the reasons which have been set out above, it has been adequately explained by the defendant that the stewardship expectation contains some flexibility in relation to circumstances where CoP has been brought forward. Further, there is logic in the defendant’s approach, which is that where CoP has been brought forward then the assessment has to be formulated on the basis of those facts, and the decommissioning plan framed accordingly, rather than on the basis of a counterfactual circumstance in which the costs might be different. Whilst the defendant properly accepts that Ms Hepworth did not have the figure of £4,161,616 before her when preparing the section 32 advice, as Ms Hepworth points out in her evidence she was assessing the post-CoP running costs set out in the decommissioning plan of £15,937,795 over four months. This figure is broadly equivalent to the figure which was provided by Total in the context of JR1.

The claimant attacks the reasoning provided in the section 32 advice at paragraph 3.13 which provides as follows:

Nobel has stated in its 6 January 2025 letter that, given the NSTA’s view on post-CoP running costs being considered high and the planned timetable as ambitious, the proper approach would be to postpone CoP to a point at which a sensibly timed decommissioning plan can be executed. The NSTA, in forming their position recognises that the costs are high, and this is due to maintaining the asset to the required Safety Case standards while still on-station and that the proposed plan is ambitious, however, the drive to achieve the ambitious timeline is to minimise the post-CoP running costs. Regardless of timing to the decommissioning programme, there is a risk of high post CoP running costs. It should also be recognised that delayed decommissioning would very likely result in higher overall decommissioning costs, such as increased rig rates for well decommissioning. The rig rates are increasing year-on-year and are likely to continue to do so as supply becomes scarcer (rigs being retired and / or going to other regions).”

The claimant contends that this reasoning defies logic on the basis that it is unsurprising that Total is ambitious to reduce post-CoP costs, but the reason why post-CoP costs have been incurred is because they decided to cease production early. This is a point akin to the claimant’s submissions that the analysis of decommissioning costs should have been undertaken on a different footing than grounded in the facts, on the basis that the stewardship expectation was that approval of the decommissioning plan should have been obtained prior to CoP. Again, as the defendant has observed, the stewardship expectation does not require this in every case and in cases like the present where in fact an earlier CoP is planned the nature of the assessment of decommissioning costs undertaken by Ms Hepworth is entirely appropriate. Paragraph 3.13 is clear and expresses a reasonable judgment open to the defendant and based upon the circumstances of the case being assessed. Thus, ground five does not give rise to any basis to conclude that the defendant’s decision was unlawful.

Ground Six: Article 1 of the First Protocol

The claimant contends that as a result of the defendant’s actions in giving the section 32 advice being incompatible with domestic law, there has been an interference with the claimant’s “possessions” (in the form of the licences in interests the claimant has in the Maclure and Ballindalloch oil fields) within the meaning of Article 1 Protocol 1 of the ECHR. That unlawful interference is a violation of Article 1 Protocol 1 of the ECHR and as such the claim gives rise to a claim for damages.

The difficulty for the claimant in relation to this ground is that as a result of the examination of each of the grounds raised by the claimant set out above there has been no unlawful conduct on the part of the defendant in respect of either the section 29 advice to Total or the section 32 advice to OPRED. In those circumstances there is not, therefore, any illegality which could give rise to any legally relevant interference with the claimant’s possessions. It is therefore unnecessary to examine the arguments raised by the defendant in relation to whether the claimant’s case is partially out of time, whether the claimant’s rights amount to a possession, or the question of whether an interference can be made out. In the absence of any finding of unlawful conduct on the part of the defendant it has not been suggested by the claimant that its advice was in any way a disproportionate interference with any possession of the claimant and in any event such an allegation would be bound to fail. There is therefore no substance in ground six.

Overall Conclusions

Having examined the merits of both JR1 and JR2, for the reasons which are set out above neither of these applications can properly succeed on the merits. It follows that there is, therefore, no need for final conclusions to be reached in relation to the procedural issues raised by the defendant, Total and OPRED as to whether or not either of the decisions under challenge in this case are properly susceptible to an application for judicial review. Even accepting the claimant’s arguments that none of these procedural objections are a bar to the claims, the claims themselves are incapable of justifying any grant of relief. In the light of these conclusions the application in JR1 must be dismissed and permission for JR2 to proceed must be refused. As a result of this both of the claimant’s applications for judicial review must fail.