Regulator Analyzes Australia’s Decommissioning Challenge
Authors: Carpenter Chris 
Published: January 2023

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This article, written by JPT Technology Editor Chris Carpenter, contains highlights of paper SPE 208483, “Is Australia Prepared for the Decommissioning Challenge? A Regulator’s Perspective,” by David Christensen and Andrew Re, National Offshore Petroleum Safety and Environmental Management Authority. The paper has not been peer reviewed.

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The Australian offshore petroleum industry has been in operation since the early 1960s and at the time of writing has approximately 57 platforms, 11 floating facilities, 3500 km of pipelines, and 1,000 wells in operation. Many offshore facilities are now approaching the end of their operational lives. Modeling has estimated Australia’s combined offshore petroleum industry decommissioning liability (including wells, pipelines, subsea equipment, and facilities) to be $40.5 billion. The purpose of the complete paper is to highlight the importance and benefit of adopting best practices when planning for decommissioning throughout the life cycle of a petroleum project.

Introduction

Australia’s offshore petroleum decommissioning challenge is significant given its remote location, limited availability of specialist services, and the relative infancy of its offshore industry in undertaking large-scale decommissioning projects. Recent events in Australia have shown that the industry is, broadly speaking, unprepared for decommissioning.

Australian Regulatory Approach

The Offshore Petroleum and Greenhouse Gas Storage (OPGGS) Act of 2006 and associated regulations provide the legal framework for the exploration and recovery of petroleum and greenhouse gas activities in Australian Commonwealth waters (those areas that are more than 3 nautical miles from the territorial sea baseline). The key principle underpinning the OPGGS Act and regulations is that responsibility for ensuring the health and safety of workers and the protection of the environment lies with those who create the risks. An objective-based regulatory regime sets requirements that must be achieved but does not prescribe how those requirements must be met.

The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) has been established and appointed under the OPGGS Act as regulator for health and safety, structural (well) integrity, and environmental management of petroleum activities in Australian waters (3–200 nautical miles offshore) and in coastal waters (0–3 nautical miles offshore) where regulatory powers and functions have been conferred.

Section 572, Maintenance and Removal of Property.

Section 572 of the OPGGS Act establishes requirements for maintenance and removal of property by the titleholders, along with exemptions and obligation provisions. Section 572(2) of the OPGGS Act provides that a titleholder must maintain in good condition and repair all structures that are, and all equipment and other property that is, in the title area and used in connection with operations. Section 572(3) of the OPGGS Act provides that a titleholder must remove from the title area all structures that are, and all equipment and other property that is, neither used nor to be used in connection with the operations in which the titleholder is or will be engaged.