Trailing liability provisions now in effect

The Regulator 2022 - Issue 2

Provisions for enhanced remedial directions, commonly referred to as trailing liability provisions, have officially come into effect as of 2 March.

These provisions are designed to ensure that the costs and liabilities associated with decommissioning will be borne by the petroleum industry and do not become the responsibility of the government or the Australian community. The provisions do this by allowing the government to call back former titleholders, related corporate entities, or people related to current or former titleholders to undertake remedial work.

The Australian government has implemented changes to the offshore oil and gas decommissioning framework and the trailing liability provisions are a part of these changes. They are intended to be a last resort option and should only be employed when no other effective avenues for remediation by the current titleholder are available, or where there is no current titleholder.

Instances where these provisions may be used include where a current titleholder has failed to decommission in accordance with regulatory requirements, (such as the current titleholder entering liquidation) or if issues arise in relation to previously decommissioned property (such as previously plugged well begins leaking).

The trailing liability provisions apply to titles as they existed on or after 1 January 2021.

Guidelines for how these provisions apply to the decommissioning of offshore petroleum property have also been made available on the Department of Industry, Science, Energy and Resources website.