Decommissioning of upstream oil and gas facilities

technical challenges; and thirdly, finding ways to share learning across the industry
whilst safeguarding the necessary liquid and competitive contractor market.
The oil and gas industry in the United Kingdom together with the relevant
government departments have tried to address the challenges summarised above,
and a number of initiatives are under way. These include the development of a
standard decommissioning security agreement; common parameters for estimating
decommissioning/removal costs; and consideration of new securitisation tools for
decommissioning liability.
As this chapter was being written, the UK Parliament passed the Energy Act 2008.
This will bring about significant changes to the legislative regime for
decommissioning, by amending and supplementing the provisions of the Petroleum
Act 1998 (which provided a statutory regime for decommissioning of disused
offshore oil and gas installations). The Petroleum Act 1998 provides that the
government, through the secretary of state, can require field owners to submit an
abandonment programme setting out how they propose to deal with disused
installations. The obligation of the field owners properly to remove and/or
decommission disused installations in accordance with an approved programme is
joint and several. Under the provisions of the Petroleum Act 1998, the secretary of
state also has the power to require the parties to an approved decommissioning
programme to establish financial security where the secretary of state is concerned
about the ability of the parties to carry out the approved decommissioning
programme. The Energy Act 2008 extends the powers of the secretary of state such
that in future, he/she will be able to require financial security at any stage of field
life, and even before the submission and approval of a decommissioning programme.
The provisions of the new Energy Act 2008 will further enable the secretary of state
to widen the net of relevant parties liable to undertake decommissioning of a disused
installation. Furthermore, its provisions provide protection for funds set aside for
decommissioning, so that even if any of the parties who have contributed or
provided the security were to be become insolvent, the security will be protected
against a liquidator.
Whether the oil and gas industry-led initiatives and the UK governments
changes to the legislation on decommissioning as set out in the Energy Act 2008 and
the Guidance Notes published by the Offshore Decommissioning Unit of the
Department of Energy and Climate Change56 Bill will resolve the existing difficulties
in the United Kingdoms legal and regulatory regime on decommissioning remains
an open question.
11.

The unfinished business

The discussion in this chapter shows that the issues relating to offshore
decommissioning and the adequacy of international law treaty and regulatory
provisions as so sharply highlighted by the Brent Spar episode have now largely been
resolved. There is now a settled body of international law (as well as some regional
guidelines and regulations for example in the North-East Atlantic area) regulating

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https://www.og.berr.gov.uk/regulation/guidance/decommission.htm.

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