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Regulations in the North Sea for Offshore Decommissioning

Learn about the UK regulations for decommissioning offshore oil and gas installations, including industry facts, government obligations, international rules, and decommissioning programmes.

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Regulations in the North Sea for Offshore Decommissioning

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  1. Regulations in the North Sea Keith Mayo, Head of Offshore Decommissioning, DECC, UK Date 1/2 October 2009

  2. What is DECC? • Set up by the UK Prime Minister in October 2008 • Focus is on twin challenges of climate change and energy supply • DECC is responsible for UK meeting climate change targets • And for affordable, secure and sustainable energy supplies

  3. Affordable, secure and sustainable energy supplies means - • UK must make the most of its own oil and gas resources • That means encouraging companies to develop all possible reserves whilst discoveries get smaller • So decommissioning liabilities must be managed effectively and responsibly as part of the package of regulations for oil and gas developments

  4. UK industry - some facts • 8 installations with large concrete substructures • 31 with large steel jackets (> 10,000 tes) • 214 other steel jackets • 278 subsea production systems • 21 floating production systems • >15,000 km pipelines • <5,000 wells • <200 cuttings piles

  5. UK industry – decommissioned since 1988 • 3 installations with large concrete substructures • 3 with large steel jackets (> 10,000 tes) • 15 other steel jackets • 7 floating production systems • 2 subsea production systems • 16 pipelines • 10 other facilities (loading buoys, flares etc)

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  10. UK Government obligations • Meet international rules and public expectations • UN Law of the Sea • International Maritime Organisation • OSPAR Convention for the Protection of the Marine Environment of the North East Atlantic • Ensure the companies concerned can do the work • Don’t obstruct future developments and production unreasonably

  11. International Rules • UN Law of the Sea • International Maritime Organisation • OSPAR Convention for the Protection of the Marine Environment of the North East Atlantic

  12. OSPAR Decision 98/3 • Agreed by the 15 members after the Brent Spar incident • UK Government approved disposal of the Spar in a deep sea trench • Shell reversed its plans following Greenpeace campaign • Spar was removed and recycled as foundations for a quayside in Norway

  13. Decision 98/3 requirements • No dumping or leaving in place of installations in the marine environment • Should be brought ashore for re-use, recycling or final disposal • Possible exceptions for large concrete substructures, footings of jackets >10,000 tes, concrete anchor bases and damaged structures. • No requirements for pipelines, wells, subsea facilities

  14. UK Legislation • Petroleum Act 1998 enables DECC to make companies liable for decommissioning • Joint and several liability for all companies concerned • Liability maintained throughout field life; new owners will take liability; may be withdrawn from sellers • DECC can insist on financial security if concerned about ability to pay for decommissioning

  15. Decommissioning Programmes • Petroleum Act requires companies to prepare decommissioning programme • Other regulators and public consulted • Programmes approved after all comments considered • Decisions based on balance of impacts on safety, environment, other users of sea and economics

  16. Financial Security • Trend in North Sea is for smaller companies to develop new fields and take over old assets from majors • DECC can keep liability on original developers if concerned about strength of buyers • DECC can require financial security such as letters of credit • Basic test is whether decommissioning costs more than 50% of company’s shareholders funds

  17. UK Decommissioning Costs • £14 billion for installations • £5 billion for subsea systems • £4 billion for pipelines • £23-25 billion in total

  18. Issues for regulators • Pipelines – leave in place or remove? • Mattresses – leave in place or remove • Drill Cuttings Piles - cover, remove, leave to degrade naturally? • Wells – standards for plug and abandonment • Radioactive scale in pipes and vessels • Re-use of oil and gas facilities for hydrocarbon gas storage, CO2 sequestration • Low carbon decommissioning

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