Everything Must Go

Article published in the Regulator | Issue 1: 2020

The Australian Government is committed to the protection and preservation of the environment. It is for this reason that approval to explore and develop Australia’s offshore petroleum resources is subject to stringent environmental protection legislation.

In late 2019, the former federal Minister for Resources and Northern Australia issued NOPSEMA with a Statement of Expectations in which he made clear his expectation that NOPSEMA would heighten its focus on the existing legislative requirement for offshore petroleum companies to maintain and remove all property and equipment.

When any piece of property or equipment used in offshore operations is no longer required, it must be removed. Until it is removed, it must be maintained in good condition and repair.

NOPSEMA has always required petroleum companies to demonstrate how they will maintain and remove all property and equipment, and where an alternative to complete removal is proposed, how equal or better safety and environmental outcomes will be achieved. In response to the enduring Statement of Expectations, NOPSEMA will now increase its efforts in challenging the robustness of these plans, with timeliness a particular focus.

Petroleum companies will be required to improve their description of all property and equipment and keep an inventory and schedule for its maintenance and removal. The inventory and schedule must be justified in the relevant permissioning documents and on an ongoing basis during NOPSEMA inspections.

NOPSEMA will regulate the requirement to maintain property and equipment in ‘good condition and repair’ in line with the principle that it be fit-for-purpose to perform its intended function at all times and remains capable of being removed. Regular inspection, maintenance, monitoring, and repair should be undertaken until its removal.

In situations where production operations have been temporarily suspended, all property and equipment must continue to be maintained in good condition and repair. NOPSEMA will not allow property and equipment to be left to rust and degrade to a point where it becomes a risk to the safety of the workforce when it is used again and/or its removal becomes impossible.

It is NOPSEMA’s expectation that petroleum companies will not delay removal of disused property and equipment until the end of field life. A plan must be in place to remove, in a timely manner, all property and equipment when it will no longer be used. If removal is to be delayed, or full removal is not practicable, then alternative arrangements must be demonstrated to, and approved by, NOPSEMA to deliver equal or better environmental outcomes, and can be done safely.

If a petroleum company does not comply with the legislative requirement to maintain and remove property and equipment then it is an offence of strict liability and NOPSEMA may seek to prosecute and have civil or criminal penalties applied. Where necessary, NOPSEMA will take enforcement action including directing the responsible, or formerly responsible, petroleum company to remove all property and equipment.

To assist petroleum companies in achieving compliance with this legislative requirement, NOPSEMA will be releasing a draft Duty to remove equipment and property from the title area policy. Interested stakeholders are strongly encouraged to review the policy and provide feedback to be considered in its finalisation and subsequent use.