making

handle the water. Gas is gathered and transported to shore by pipelines,

whereas oil may be either accumulated in storage tanks for subsequent
transport by tanker or transferred directly from separators and treaters into
the tanker. If an oil pipeline has been constructed, the oil may be run from
treating equipment directly into the pipeline.
Offshore pipelines are laid by pipe-laying barges. The pipeline is
continuously welded together and laid along the floor bed. On softer and
shallower bottoms, the pipeline is buried. Some pipe-laying barges are
semisubmersible to minimize the effects of wind and waves in rough
water. In recent years, flexible pipeline laid by reel barges has been
developed.
REMOVAL AND RESTORATION
As discussed in Chapter Seventeen, a major cost of offshore operations
is incurred after oil and gas production has ceased. This is the cost of
removing the equipment and platform and cleaning up the ocean bed. The
exact nature of reclamation requirements varies from one part of the world
to another, but almost invariably the costs are very high, often much more
than the original cost of the platform and facilities, particularly when oil
storage facilities are a part of the structure.
Offshore platforms are often an oasis for marine life, as they offer small
fish protection in the shallower, sunlit water depths. Offshore platforms,
particularly in the Gulf of Mexico, are a popular destination for sport
fishermen. Recognizing this benefit, government authorities sometimes
allow offshore platforms to be removed from the seabed, towed to
designated areas outside of shipping lanes, and sunk, forming artificial
reefs. In rare instances, operators may be allowed to cut off the top of
platforms to a certain water depth (perhaps 40 meters) and leave the
substructure in place.
ACCOUNTING PROBLEMS RELATED TO OFFSHORE ACTIVITIES
The unique aspects of offshore physical activities and the extremely
high costs of property acquisition, exploration, drilling, development,
production, and reclamation, although not necessarily creating unique
accounting problems, do compound and make more difficult some of the
problems encountered in accounting for onshore operations. These
complications are recognized in Oi5 and Reg. S-X Rule 4-10