Decommissioning of upstream oil and gas facilities

5.3 Other international regulations

There are a number of other international law regulations relevant to offshore
decommissioning, such as the Convention on the Prevention of Marine Dumping of
Wastes and Other Matter 1972 (the London Dumping Convention), amended by its
1996 Protocol, and the OECD Decision on the Control of Transboundary Movements
of Wastes Destined for Recovery Operations 2001, as amended in 2004. Among the
limited number of decommissioning projects executed in the North Sea to date,
there have been instances of disused installations removed from the continental
shelf of the United Kingdom and taken away to Norway for recovery and scrapping.
The OECD Decision closely regulates the movement of waste (including disused
installations and their components) from the area of an exporting state to that of an
importing state. Also relevant to decommissioning within the North East Atlantic
Area is OSPAR Recommendation 2006/5 on a Management Regime for Offshore
Cuttings Piles, which became effective on June 30 2006.29 The Recommendation
introduced a management regime for offshore drill cuttings piles, accumulations of
which are typically to be encountered under or near offshore platforms and therefore
forming part of materials to be handled or disposed of at decommissioning.
While the regulations discussed above are mainly applicable to North East
Atlantic states, it is likely that they will have some influence in the establishment of
decommissioning regulations in other regions of the world.

6. Decommissioning in national legislation and upstream agreements

National legislation on decommissioning in jurisdictions across the world is
evolving. While some jurisdictions have well established and relevant laws or
regulations in place, many others either have not yet established such laws or are still
in the process of discussing what to adopt.30 We are still a long way from having
decommissioning properly provided for in national or regional regulation in all oil
and gas producing countries.
For companies in the upstream offshore oil and gas industry, decommissioning
obligations may arise out of national legislation (or regulation), a contractual
framework or both. Aside from regulatory requirements, parties may commit to
certain arrangements and obligations in anticipation of future decommissioning and
related costs. Early oil and gas agreements (whether concession or other types) did
not usually provide for decommissioning. Although references to well abandonment
provisions are commonly found in early contracts, it is only in later agreements that
decommissioning began to be specifically provided for.31

29 www.ospar.org.
30 In the North Sea area for example, the United Kingdom, Norway, the Netherlands, Germany, Ireland and
Spain have specific legislation in place. Denmark has no specific national regulation but is signatory to
most international conventions. In any event, under the relevant international regulations, all
installations offshore from Denmark will have to be completely removed.
31 Bruce M Kramer and Gary B Conine, Joint Development and Operations, p 646, in International
Petroleum Transactions, Second Edition (Rocky Mt Min L Fdn, 2000): Although some abandonment
requirements, such as well plugging, have been in effect for many decades, widespread recognition of
the environmental damage and health and safety hazards resulting from unreclaimed energy projects
and the need to plan in advance for field abandonment did not occur until the 1970s and 1980s. For
example, Norway did not enact special legislation dealing with abandonment of offshore facilities until
1985; Britain followed suit two years later.

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