Securing end state approvals

As the decommissioning of offshore oil and gas facilities continues to become a more prominent concern for titleholders, the question of complete removal versus in situ abandonment is arising more regularly.

NOPSEMA maintains that the complete removal of infrastructure and the plugging and abandonment of wells is the default decommissioning requirement under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act). The full removal base case is the conservative and pragmatic approach as it removes any future risks and resolves issues of future liabilities. 

As outlined in the Department of Science, Industry, Energy and Resource’s Offshore Petroleum Decommissioning Guideline, deviations to the base case can be considered, however, the titleholder must demonstrate that the alternative approach complies with all other legislative and regulatory requirements, that environmental impacts are acceptable and risks to the environment have been reduced to as low as reasonably practicable (ALARP). If all of these requirements have been met the titleholder must also demonstrate that the alternative arrangement delivers equal or better environmental, safety and well integrity outcomes compared to full removal. 

The UNCLOS III framework, IMO Resolution A.672.16 and the London Protocol are globally recognised as guiding principles for managing the removal or disposal of offshore structures and installations. Australia is a signatory to UNCLOS, the London Protocol, and member of the IMO, and therefore any decision on decommissioning outcomes must be consistent with these requirements.

To comply with international conventions and the current legislative framework, titleholders must demonstrate that the property or equipment has been removed or is appropriate for leaving in-situ, that it will not interfere with other marine users and will not create unacceptable risks in the future.

As outlined in the IMO Resolution A.672(16), the regulator can make a determination that a deviation from full removal will be considered and the evaluation should consider matters including navigation, deterioration of the material and its present and possible future effect on the marine environment, the risk that the material will shift from its position, and the technical feasibility of the proposed solution. The guidelines and standards outlined in the IMO Resolution A.672(16) should be addressed when preparing an environment plan, NOPSEMA has published a table on its decommissioning page providing a description of the types of impacts and risks that need to be addressed.

In order for a titleholder to surrender their title under section 270 of the OPGGS Act they must seek approval from the joint authority. Joint authority approval is subject to NOPSEMA being satisfied that a number of conditions have been met including that all wells, equipment and property have been suitably decommissioned. Securing certainty on these matters is best achieved through end states being described and accepted by NOPSEMA in an environment plan and a well operations management plan prior to application for surrender.

The Environment Regulations require an environment plan to be in force for any petroleum activity including decommissioning activities. The regulations are objective-based and consider each activity on its merits, and as a result, there is not a prescriptive set of conditions and circumstances in which NOPSEMA may accept an alternative to full removal.

For an environment plan to be accepted by NOPSEMA, it must meet the Environment Regulations acceptance criteria, which require the impacts and risks of the activity to be reduced to ALARP and to be of an acceptable level. The regulations also require the activity to be consistent with the principles of ecologically sustainable development as defined in the Environment Protection and Biodiversity Conservation Act 1999. This includes a requirement that decisions integrate long term and short-term considerations.

NOPSEMA has observed titleholders using a multi criteria analysis tool to demonstrate equal or better outcomes in environment plans. This analysis determines a set of criteria to be evaluated and ranks and weights these to select a preferred decommissioning end state. This method prioritises some criteria over others and does not always address all of the impacts and risks from the activity. All impacts and risks must be addressed, and the environment plan needs to demonstrate that each of these will be reduced to ALARP and be of an acceptable level.

To learn more about NOPSEMA’s expectations see our decommissioning page.