Abandonment (Field Decommissioning): The Legal Requirements

Abstract

Abstract The main areas to be considered in relation to the abandonment of offshore installations are:-the legal requirements to be imposed in relation to abandonment. This will include consideration of English, Norwegian and Dutch law as well as international law;how licensees may protect themselves against joint and several liability for performance of their legal obligations in relation to abandonment by the provision of security; andconsideration of practical examples of abandonment such as the abandonment of the Piper Alpha platform on the UK continental shelf and the K13-D platform on the Dutch continental shelf. This paper considers only abandonment of offshore installations as very different considerations apply onshore and applies only to Europe, though the international treaties will also apply elsewhere. Introduction It has been estimated that on the UK continental shelf alone there are over 150 fixed platforms and some 3,000 miles of major submarine pipeline. The estimated cost of abandonment of these offshore installations was estimated by the Member Companies of the United Kingdom Offshore Operators Association ("UKOOA") in 1988 to be £4.4 billion (US$ 6.6 billion) in the case of complete removal and £2.9 billion (US$ 4.5 billion) in the case of partial removal of the installations (estimated on the basis of a 55 metre clearance in the southern and central North Sea and 75 metres in the northern North Sea). As these figures indicate, abandonment of offshore installations will be a very expensive business and one which is going to become more important as the decade progresses with more fields moving towards the end of their productive lives. Legal obligations in relation to abandonment English Law Before the enactment of the Petroleum Act 1987, the question of abandonment was governed by the Coast Protection Act 1949, the Petroleum and Submarine Pipe-lines Act 1975andtheModelC1auses incorporated into production licences. Broadly speaking, all platforms and pipelines require consent for their emplacement from the Secretary of State for Transport under the Coast Protection Act 1949 and this consent is given subject to the site being cleared to the satisfaction of the Secretary of State when the platform or pipeline is abandoned or disused. With regard to submarine pipelines, the standard form of works authorisation issued under the Petroleum and Submarine Pipe-lines Act 1975 provides that the Secretary of State may, under the terms of the standard form of works authorisation, require the holders of the authorisation to take whatever measures are necessary to prevent the pipeline from being or becoming a hazard to navigation or fishing or a source of pollution. Such measures may include the removal the pipeline or, if any part of the pipeline is left in place, the sealing or cleaning of the pipeline. In addition, Model Clause 19 of the Petroleum (Production) (Seaward Areas)Regulations 1988 which is one of the Model Clauses incorporated into production licences, requires the Secretary of State's consent to the abandonment of any well and allows him to impose any conditions in relation to that abandonment. It has been argued(1) that this power might extend to the removal of platforms in addition to the well itself.