Ensuring responsible decommissioning
While the decommissioning of offshore oil and gas facilities has been a legal obligation in Australia since the late 1960s, only a handful of facilities have been decommissioned in that time. Now, more than half of the facilities regulated by NOPSEMA are more than 20 years old, some more than 50 years, and at least 13 have ceased production. Many of these facilities will need to be decommissioned over the next five to ten years.
Responsible decommissioning, that is safe and cost-efficient, is challenged when duty holders leave their planning for decommissioning to the end of a facilities life.
“Responsible decommissioning means planning for safe decommissioning right from the design stage, and well before facilities have been installed” said NOPSEMA’s Head of Environment and Decommissioning, Cameron Grebe.
In 2019, the Minister for Resources and Northern Australia issued a Statement of Expectations to NOPSEMA in which he highlighted the need for heightened oversight of duty holder compliance with their decommissioning obligations. NOPSEMA subsequently increased its promotion and advice, compliance monitoring, and enforcement activities for decommissioning.
To assist duty holders in understanding and complying with their decommissioning obligations NOPSEMA has published several guidance documents. This included a Section 572 Maintenance and removal of property regulatory policy in 2020 that outlined all of the pre-existing decommissioning requirements and NOPSEMA’s expectations on how they should be met.
Recently, NOPSEMA published a five-year Decommissioning Compliance Strategy to communicate how it would work with duty holders to ensure timely and responsible planning and implementation of decommissioning activities.
"Our goal is to have decommissioning plans in place by 2023 for all facilities where property and equipment is no longer in use, and by 2025, property and equipment should be removed within five years of not being used and wells permanently abandoned within three years of ceasing production" said NOPSEMA’s Decommissioning Manager, David Christensen.
In support of the strategy, NOPSEMA has also published a Decommissioning Compliance Plan. The plan identifies the types of compliance actions duty holders can expect NOPSEMA to consider depending on several factors. This includes the length of time a field has been in permanent state of nonproduction, the level of planning and preparation for decommissioning in current, or under revision, permissioning documents, and the level of integrity issues likely to limit options for decommissioning.
At NOPSEMA, we recognise the increasing pressure placed on duty holders to reduce costs as production declines, however, it remains a legal requirement for duty holders to maintain all property and equipment in good condition and repair. It is unacceptable for duty holders to allow their disused property and equipment to degrade to a point where it becomes too dangerous to remove or otherwise safely decommission.
Recently, NOPSEMA has found several cases of corrosion and other structural damage, particularly at ageing assets. Cases such as this challenge a duty holders’ ability to decommission responsibly. Moving forward, NOPSEMA will be closely monitoring duty holders to ensure they are carrying out the required inspection, monitoring, maintenance, and repair processes.
NOPSEMA has already issued directions for Eni’s Woollybutt field and Woodside’s Enfield, and to Exxon Mobil (Esso) for multiple nonproducing facilities in the Bass Strait.
The directions set clear timeframes for plugging and abandoning wells, removing property and equipment, protecting natural resources, and making good any damage to the seabed. The directions also require property and equipment to be maintained in good condition and repair so that it may be safely removed or, where NOPSEMA approves an alternative solution such as repurposing, remain on location.
“In taking appropriate and proportionate compliance action, NOPSEMA seeks to further clarify to duty holders their decommissioning obligations and NOPSEMA’s expectations,” said Mr Christensen.
Over the next year, NOPSEMA will engage with the duty holders we have identified as requiring a higher or moderate level of regulatory oversight to discuss their compliance with their decommissioning obligations. In most cases, duty holders should expect lower-level compliance action to be taken, for example NOPSEMA requesting revisions to accepted permissioning documents.
“Each case will be unique with a range of circumstances and considerations that we will need to take into account before taking any type of compliance action,” said Mr Christensen.
To learn more about NOPSEMA’s expectations and how to comply with your decommissioning obligations please visit our decommissioning page.