Decommissioning

Decommissioning

Crane lifting ladder

DECC regulates decommissioning of offshore oil and gas installations and pipelines using legislation under the Petroleum Act 1998.

Under Section 29 of the Act the Secretary of State is empowered to serve notice on a wide range of persons.

In the first instance this would include parties to joint operating agreements for installations, and owners for pipelines.

The notice will either specify the date by which a decommissioning programme for each installation or pipeline is to be submitted or, as is more usual, provide for it to be submitted on or before such date as the Secretary of State may direct.

 

Decommissioning programmes

A decommissioning programme sets out the measures to decommission disused installations and/or pipelines, and will describe in detail the methods to undertake the work. In some cases this process can cover a wide range of activities such as radioactive material handling, removal of debris from the seabed and environmental monitoring of the area after removal of the installation. The department aims to be transparent in its consideration of decommissioning programmes. As a result, other government departments/agencies, non-governmental organisations, members of the public and other bodies are given the opportunity to comment on the proposals set out in a programme. 

A list of all installations on the UKCS and their current status is available from the publications section of the OSPAR website.

At the first ministerial meeting of the OSPAR Commission (Commission for the Protection of the Marine Environment of the North East Atlantic) in 1998, a binding decision was agreed that set rules for the disposal of offshore installations at sea. Under the decision the dumping and leaving wholly or partly in place of offshore installations is prohibited. Decision 98/3 recognises it may be difficult to remove the 'footings' of large steel jackets weighing more than 10,000 and concrete installations. As a result there are derogations for these categories of installations if the internationally agreed assessment and consultation process shows leaving them in place is justifiable. 

Further details on the decommissioning process, including the role and content of a decommissioning programme, are available in the Guidance notes for industry on the decommissioning of offshore installations and pipelines under the Petroleum Act 1998.

Cost recovery – DECC will now charge a fee in respect of offshore (oil and gas) installations and pipelines decommissioning programmes under the Petroleum Act 1998. Guidance, including the indicative fee structure, is available in: Guidance – charging a fee for offshore (oil and gas) installations and pipelines under the Petroleum Act 1998.

Recommendation 2006/05

Recommendation 2006/05 was adopted at the 2006 OSPAR Commission meeting, which introduces a management regime for offshore drill cuttings piles. Drill cuttings consist of rock fragments that have been contaminated in some instances with the drilling mud used to lubricate the drill bit in drilling operations. In some cases these cuttings have been discharged to the seabed, where they can accumulate around the base of installations and at remote subsea drilling locations to form what is known as drill cuttings piles. The management regime for drill cutting piles is based on the results of the work carried out under the UKOOA Joint Industry Project on drill cuttings between 1998 and 2004. The OSPAR recommendation, which the department implements through the provisions of the Petroleum Act 1998, introduces a two-stage approach to identify those cuttings piles that may require further investigation and to assess the best means of dealing with them. Further details, including a copy of the OSPAR recommendation, can be found in the Guidance notes for industry on the decommissioning of offshore installations and pipelines under the Petroleum Act 1998. 

In recent years there has been a significant and increasing number of UKCS licence assignments from large companies to smaller ones. The introduction of innovative licensing schemes has also brought a number of new companies to the UKCS. Ministers have agreed such activity should be encouraged and as well as new developments, there should be free trade in mature offshore oil and gas assets to extend field life and maximise economic recovery. At the same time, the Government has a duty to ensure the taxpayer is not exposed to an unacceptable risk of default in meeting the costs associated with decommissioning.

To enable these two goals to be achieved, a policy was developed to ensure adequate security for decommissioning costs is maintained on a field-by-field basis. The details of this policy, including the circumstances in which the Government may require the owners of offshore installations and pipelines to provide security or enter into a Decommissioning Security Agreement (DSA), are set out in annexes F and G of the Guidance notes for industry on the decommissioning of offshore installations and pipelines under the Petroleum Act 1998.

In 2009 the Offshore Decommissioning Unit presented at conferences in Bergen, Norway and Kuala Lumpur. 

 

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