Is Australia Prepared for the Decommissioning Challenge? A Regulator's Perspective

Abstract

Abstract The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) is Australia's independent expert regulator for health and safety, structural (well) integrity and environmental management for all offshore oil and gas operations and greenhouse gas storage activities in Australian waters, and in coastal waters where regulatory powers and functions have been conferred. The Australian offshore petroleum industry has been in operation since the early 1960s and currently has approximately 57 platforms, 11 floating facilities, 3,500km of pipelines and 1000 wells in operation. Many offshore facilities are now approaching the end of their operational lives and it is estimated that over the next 50 years decommissioning of this infrastructure will cost more than US$40.5 billion. Decommissioning is a normal and inevitable stage in the lifetime of an offshore petroleum project that should be planned from the outset and matured throughout the life of operations. While only a few facilities have been decommissioned in Australian waters, most of Australia's offshore infrastructure is now more than 20 years old and entering a phase where they require extra attention and close maintenance prior to decommissioning. When the NOGA group of companies entered liquidation in 2020 and the Australian Government took control of decommissioning the Laminaria and Corallina field development it became evident that there were some fundamental gaps in relation to decommissioning in the Australian offshore petroleum industry. There are two key focus areas that require attention. Firstly, regulatory reform including policy change and modification to regulatory practice. Secondly, the development of visible and robust decommissioning plans by Industry titleholders. The purpose of this paper is to highlight the importance and benefit of adopting good practice when planning for decommissioning throughout the life cycle of a petroleum project. Whilst not insurmountable, the closing of these gaps will ensure that Australia is well placed to deal with the decommissioning challenge facing the industry in the next 50 years.