Communication from the Commission to the Council and the European Parliament on removal and disposal of disused offshore oil and gas installations
Date: 1998-02-18
Institutions: European Commission
Subjects: North Sea, environmental protection, marine pollution, offshore oil structure, oil industry

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  18.02.1998 
COM(1998) 49  final 

COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT 

on 
Removal and Disposal of 
Disused Offshore Oil and Gas Installations 

Introduction 

In Junc  1995, Ibllowing receipt of a permit from the UK Government Shell decided to 
dispose of the Brent Spar, a redundant oil storage buoy, by sinking it a deep water site 
in the North Atlantic. This reopened an extensive debate on the whole question of the 
disposal of redundant oil and gas installations in European waters, of which there are 
approximately  600. The decision coincided with the North  Sea Conference  and in the 
subsequent  Ministerial  Declaration  a majority  of the Ministers  present,  including  the 
Commissioner,  but  excluding  the  UX  and  Norwegian  Ministers  who  represent  the 
only  two  states  with  a significant  number of  large  installations  which  under  existing 
guidelines can be considered for sea disposal,  effectively  called for a complete ban on 
disposal at sea of all such installations, in order to protect the marine environment. 

The  Urcnt  Spar  'affair'  generated  considerable  public  interest  and  dcmonstrated  the 
diflicuities  of  implcmcnling  a disposal  policy  which  does not have sufficiently  broad 
support.  Eventually,  in the face of a concerted  campaign, which  included  a consumer 
boycott of Shell products in several Member States Shell reversed its decision and the 
Brent Spar was towed to a Norwegian fjord  pending a further  review of all the options 
for disposal. Following this detailed review in January  1998 Shell announced that they 
were now seeking approval from  the UK to scrap the topsides  onshore and  dismantle 
and reuse the hull as part of a quay extension in Norway. Since then the issue has been 
extensively  debated  within  OSPAR  and  the  discussion  on  disposal  of  such 
installations  continues  and  a  Decision  on  the  Prevention,  Reduction  and  Control  of 
Pollution  from  the  Disposal  of  Disused  Offshore  Installations  under  the  Convention 
for  the  Protection  of  the  Marine  Environment  of  the  North  East  Atlantic  (1992 
OSPAR'  Convention)  is  scheduled  for  adoption  by  a  Ministerial  Meeting  of  the 
Convention  to be hekl in Portugal  in July  1998. Major  differences  still exist  but there 
is  a  general  agrcemcnl  that  the  consultation  process,  the  failings  of  which  were  a 
factor  in the Brent Spar affair,  needs improvement  and that concrete installations need 
to be dealt with separately. These and other key issuss are currently being discussed in 
detai!. 

1. 

Background 

1.1.  At the June  1995 North Sea Conference the Commission took the position that 
the prsferred  disposal method for  offshore  oil and gas installations was to reuse or to 
bring them to shore for recycling and for disposal of unavoidable wastes. 

1  In  this  Communication,  references  to  OSPAR  are  references  to  the  Convention  for  the 
Prevention  of  Marine  Poliution  by  Dumping  from  Ships  and  Aircraft  ('Oslo  Convention'), 
signed  in  Oslo  on  15  February  1972  and,  when  it  enters  into  force,  to  its  successor,  the 
Convention for the Protection of the Marine Environment  of the North  East Atlantic,  signed in 
Paris  on  9  September  1992,  as  well  as  to  the  executive  Commissions  set  up  under  these 
Conventions. 

The  Commission  therefore  signed  the  Ministerial  Declaration  calling  for  such 
disposal,  inviting  the  contracting  parties  to  the  Oslo  and  Paris  Convention  for  the 
Protcction of the Marine Environment of the North East Atlantic (which includes the 
North  Sea  in the Convention  Area) ('OSPAR') to  implement this by  1997. The UK 
and  Norway  dissented  whilst  France  declared  that  it  understood  the  Declaration  as 
applying to sleel structures. 

1.2.  At the subsequent OSPAR Commission  Meeting a decision was adopted on a 
majority basis establishing a moratorium on disposal at sea pending the adoption of a 
new  Decision  on  disposal.  The  UK  and  Norway  opted  out  of  this  Decision  whilst 
France  maintained  its  position  taken at the North  Sea Conference.  This  Decision  is 
now under discussion in OSPAR with strenuous efforts  being directed at arriving at a 
unanimous position. 

1.3.  The Commission Services commissioned a joint study by a reputable  offshore 
engineering  company  into  the  technical,  environmental  and  economic  aspects  of 
removal  and disposal  of  such  installations.  This  study  was  completed  in  November 
1996 and the report2 was distributed to and discussed  with Member States and EEA 
Members,  environmental  non  governmental  organisations  and  industry.  It  was  also 
distributed to the Contracting Parties of OSPAR to assist in their discussions. 

1.4.  The main impetus for the study came from the  'Brent Spar'  incident  and the 
North Sea Conference  Ministerial  Declaration in June  1995. Clearly this was an issue 
with  implications  for  the  Community  and  with  no  agreement  between  the  states 
involved it was considered advisable to have a Ihorough technical  review prepared in 
order to assist  the Commission,  and other  interested  parties -  for the study  has been 
made widely available - to assess the best course of action on the basis of a thorough 
knowledge of the issues in question. 

1.5.  The  study  arrived  at  two  main  sets  of  conclusions.  For  the  large  concrete 
installations  complete  removal 
is  technically  unproven,  unlikely  to  provide 
environmental benefit and impossible to put a cost on at this stage. For the remainder 
(i.e. steel structures) except for a limited number of installations, complete removal is 
technically feasible and economically balanced when the total cost of removing all the 
installations is considered as a whole and could be safely undertaken. 

For  all  disposal  options,  the  environmental  impact  of  residues  of  toxic  or 
1.6. 
hazardous  substances  on  the  environment  can  be  reduced  to  acceptable  levels 
provided  that  these  are  contained,  removed  and  disposed  of  carefully.  Complete 
removal  and  disposal  on  land  would  ensure  that  the  steel  could  be  recycled.  It  is 
furlhermore self-cvidcnt  that dcpcnding on the removal  and disposal  options chosen, 
thcrc could  bc subslanlial  amounts ofdemolition  wastc and debris left  on the seabed 
at the site of the installation and at a possible disposal site. 

2 A Technical Review of the possible Methods of Decommissioning and Disposing of  Offshore 
Oil and Gas installations - John Brown bv 

The  overall  extra  costs  imposed  by  bringing  all  steel  platforms  to  shore  for 
1.7. 
recycling  rather  than  implementing  only  the  bare  minimum  'required'  by  the 
International  Maritime  Organisation  ('IMO')  Regulations  were  estimated  at  up  to  2 
BECU  over  25  years, or  on the  average  up to  about  80 MECU/year.  The  impact  of 
such  a  decision  on  the  overall  production  costs  of  oil  and  gas  would  be  negligible 
although  thc  cost  diffcrcntial  for  ccrtain  individual  installations  could  be  substantial 
for the operator concerned. (see also section 4.3) 

1.8. 
In European waters there are currently approximately  600 installations. Precise 
figures are  difflcult  to give  because  of the  range  of definitions  of what  constitutes  a 
particular  installation  -  for  example  where  two  platforms  are  connected  by  a  fixed 
bridge  and  some  installations  are  on  the  boundaries  of  the  weight  and  water  depth 
limits.  However  it  is generally  agreed  that of the  600 there  are  about  100 large steel 
installations  and  about  20  large  concrete  installations  which  fall  into  the  category 
where  at present  partial  removal  is permitted  under the  guidelines  established  by  the 
IMO to ensure the safety  of navigation. These guidelines cover only removal, they do 
not  deal  vvith  any  questions  concerning  disposal.  The  large  steel  installations  are 
located  mainly  in UK  (about  60) and Norwegian  (about  30) waters. Currently  a  few 
(about  10 in total) are located in Irish, Italian and Spanish waters. As new discoveries 
are  made  the  numbers  may  of  course  increase.  The  100  steel  installations  represent 
about  85% of the  total  mass of  steel  in the North  Sea off-shore  installations.  Large 
concrete installations are currently only present in UK and Norwegian waters. 

2. 

International  Legislation 

2.1. 
There  is  a  considerable  body  of  International  Law  (Regional  and  Global 
Conventions and  Guidelines),  EC and  domestic  legislation  covering  the removal  and 
disposal of disused olTshore oil and gas installations. The main texts are as follows : 

Geneva Convention on the Continental  Shelf 1958 (global) 
United Nations Convention on the Law of the Sea 1982 ('UNCLOS') 
London (Dumping) Convention  1972 (4LC) (global) 
International  Maritime  Organisation  Guidelines  and  Standards  for 
the 
Removai  of  Offshore  Installations  and  Structures  on  the  Continental  Shelf 
1989 (TMO') (global) 
Basel Convention  on the Control  of Transboundary  Movements of Hazardous 
Wastes and their Disposal  1989 (global) 
Oslo  and  Paris  Convention  ('OSPAR')  1992  and  its  predecessors  the  Oslo 
Convention  1972 and the Paris Convention  1974 (regional) 
Helsinki  Convention  on  the  Protection  of  the  Marine  Environment  in  the 
Baltic Area  1992 (regional) 
Barcelona  Convention  for  the  Protection  of  the  Mediterranean  Sea  against 
Pollution  1976 (regional) 
See Section 5 for relevant EC legislation 

As  the  industry  expands  its  uctivitics  aiul  environmental  issues  receive  more 
2.2. 
atlcntion  Ihc rulcs auil rcgulations develop uml (here is not a common  legal  position  as 
such.  In  sonie  cases  the  queslion  of  removal  is  dealt  with  separately  from  disposal, 
others which  deal  wilh disposal  must by  implication  also cover removal.  It should  be 
noted  that  as  a  gencral  rule  these  internalional  and  regional  conventions  and 
guidelines deal  only  with  minimum standards and individual  states may  impose more 
stringent conditions. 

2.3. 
The  original  Geneva  Convention  called  for  complete  removal,  but  UNCLOS 
(which  has  not  yet  been  ratified  by  all  signatories)  maintained  the  requirement  of 
removal  as the main rule, but  introduced the possibility  of partial  removal  and  hence 
effectively  some  disposal  at  sea.  In  connection  with  partial  removal,  UNCLOS 
requires  that guidelines  established  by the  IMO to  ensure  the  safety  of  navigation  be 
taken into account. 

2.4. 
The  LC covers disposal  by dumping in the sea, and allows  for oil  installations 
to be considered  for disposal  of  in the sea on the basis of a case  by case evaluation. It 
also  rcquires a pcrmil to dump to be refused  if opportunities exist  to re-use,  recycle or 
treat  the  waste  without  undue  risks  to  human  health  or  the  environment  or 
disproportionate costs. 

The  IMO Guidelines  define  mainly  technical  criteria  (water depth  and  weight 
2.5. 
criteria)  for platforms  which may be considered  for only  partial removal  and  specifies 
the  necessary  water clearance  after partial  removal  to ensure the  safety  of  navigation. 
The key  criteria for such consideration  is that the installations must be either in more 
than 75m  of  water  or must weigh  more than 4  000  tonnes.  A  recommendation to  the 
London Convention's  Scientific  Group that these  guidelines  should  be  reviewed  will 
be considered by the Consultative Committee of Contracting Parties in November. 

2.6. 
The  Basel  Convention  deals  with  transboundary  movements  of  hazardous 
waste  and  their  disposal.  The  Community  is  a  Party  to  it  and  so  are  the  Member 
States.  Although  this  Convention  does  not  contain  any  specific  provisions  on  the 
disposal  of  offshore  installations  nor  on  disposal  of  waste  at  sea,  it  does  require 
Parties to ensure  that the generation  of hazardous  waste  is  reduced  to a minimum  and 
that  where  the  generation  of  hazardous  wastc  cannot  be  avoided  its  environmentally 
sound management  is guaranteed. 

2.7.  A  series  of  regional  seas  Conventions  dealing  with  maritime  environmental 
protection  lay  down  requirements  for  installations  in  particular  seas.  The  European 
Community  is  a  party  to  the  Helsinki  Convention,  which  covers  the  Baltic  and 
requires  complete  removal  and  disposal  on  land,  and  to  the  Barcelona  Convention 
which  covers  the  Mediterranean  sea  and  reiterates  the  requirements  in  UNCLOS. 
Finally  the  European  Community  is  a  signatory  and  about  to  become  party  to  the 
OSPAR  Convention. 

2.8.  Action  at  regional  seas  Convention  level  can  lead  to  different  standards 
between regions. For example the OSPAR Convention (12 EC Member States, 2 EEA 
Member  States,  1 third  country  and  the  European  Community)  is currently  debating 
the subject.  The Heisinki Convention  (4 EC Member States, 5 third countries, and the 
European  Community)  has  already  decided  that  all  disused  installations  must  be 
'entirely removed and brought ashore'. 

2.9.  OSPAR.  merges  the  Paris  Convention  which  covers  land-based  pollution 
where  the  Community  is  a  signatory  and  the  Commission  negotiates  and  votes  on 
behalf  of  the  Community,  and  the  Oslo  Convention  covering  sea-based  pollution, 
whcrc  the  Community  is  an  observer.  In  Octobcr  19973 the-Community  decided  to 
ratil'y the Convention  and it is now cxpected to enter into force in early  1998. 

2.10. 
Individual  states  also  have  their  ovvn  domestic  legislation  and  regulation. 
Broadiy  spcaking the  UK and  Norway  treat  each  installation  on a case  by  case  basis 
within  the  confines  of  the  IMO  guidelines,  the  remaining  states  have  policies 
requiring  disposal  to be on land, although  it is worth mentioning  that under the IMO 
and  Oslo  Convention  guidelines  practically  all  their  installations  would  have  to  be 
completely removed in any case. 

3. 

Current  Activities 

3.1. 
It is within  OSPAR that the recent discussions have taken place - as a result of 
the  Ministerial  Declaration  of  the  North  Sea  Conference  calling  for  an  OSPAR 
decision to implement the Declaration. The issue is difficult  to resolve as Contracting 
Partics to the  OSPAR  Convention  can choose  to opt out  of Decisions taken  under  it. 
Thereibre consensus is a prerequisite for a meaningful  Decision. 

The  Commission  Services  have  been  participating 

in  the  preparatory 
3.2. 
discussions  under  the  OSPAR  umbrella,  and  a draft  decision  should  be  finaliscd  for 
the discussion  at the OSPAR Ministerial  Conference  in July  1998. A preliminary  draft 
decision  has been prepared  but the key questions  are still unresolved.  The  significant 
areas of disagreement are as follows, and are to a certain extent interdependent: 

The  structure  of  the  Decision  -  While  the  UK  and  Norway  favour  a  general 
authorisation  of  consideration  of  sea  disposal  combined  with  a  list  of  categories  of 
installations  for  which  such  disposal  is  prohibited  (prohibition  list),  the  other 
Contracting Parties favour  a Decision based on a general prohibition of dumping with 
a list  of installations  which may nevertheless  be  considered  for  sea disposal  (reyerse 
list).  However,  recent UK Ministerial  statements  suggest that the UK will  eventually 
accept  the reverse  list  approach, if sufficient  progress  can be made on other  areas of 
the draft  currently being discussed. 

3 Ref.  to OJ 

10 

The question  of an  exception  clause  - The  UK  and  Norway  have  proposed  that  their 
'prohibition  lisf  approach  be  complemenled  by  an  exception  clause  which  would 
permit  in  certain  circumstanccs  the  installations  on  the  prohibition  list  lo  also  be 
considered  for  sea  disposal.  They  have  also  proposed  that  should  the  'reverse  list' 
approach  be  adopted  it  too  should  be  complemented  by  an  exception  clause  which 
would  permit  those  installations  nol identified  on the reverse  list to be considered  for 
sea disposal. The other  Contracting  Parties appear to question  the  real  need  for  such 
an exception  clause, particularly  under the prohibition  list  approach  and  the  possible 
criteria for establishing such exceptions are in any case not agreed. 

The  definition  of  the  technical  characteristics  of  the  categories  of  (large  steel) 
installations  for  which  the  decision  would  allow  consideration  of  sea  disposal.  The 
UK  and  Norway  wish  to  ensure  that  all  installations  which  are  not  required  to  be 
complctely  removed  under the IMO guideline  may be considered  for  disposal  at  sea. 
The other Contracting  Parties appear to wish to prchibit disposal  of steel  installations 
or  restrict  the  number  which  may  be  considered  for  sea  disposal  by  introducing 
strictcr technical criteria than the IMO removal Guidelines. 

Future  installations  -  The  IMO  guidelines  distinguish  between  existing  installations 
and those  made after  1  January  1998 only to the extent that the water depth criteria is 
increased from  75m to  100m and that these new installations must be designed in such 
a way that they are capable of being removed. The UK and Norway  appear to wish to 
replicate  this  treatment  in  the  OSPAR  Decision  whereas  the  remaining  Contracting 
Partics appear to be seeking to ensure that these future  installations are all disposed of 
on land. Given the requirement to design new installations as removable, which has in 
any  case  been  required  by  some  states  for  many  years,  it  would  appear  preferable  if 
the  Decision  were  to  make  land  disposal  mandatory  for  all  new  installations. 
Howcver, given the timescale of developing, exploiting and exhausting reservoirs any 
new installations are unlikely to be candidates for decommissioning for many years. 

Consultation  - There is broad agreement  that any  proposed  permit  for  disposal  at sea 
should  be  the  subject  of  consultation.  Howevcr,  the  amount  of  time  permitted  for 
consultation,  and  in  particular  the  possibility  for  consultative  meetings  of  the 
Contracting  Parties and both industry  and environment  NGOs, in all cases  where  sea 
disposal is being proposed, as well as the amount of information  made available to the 
Contracting  Parties being consulted  is not yet agreed. The UK and Norway  appear to 
have been  in favour  of less extensive consultation  than the other Contracting  Parties, 
but it now seems likely that unanimous agreement on the form of consultation may be 
reached. 

The criteria for  installations that may be considered  for disposal  at sea are  significant 
because  the  discussions  are  moving  towards  a  position  whereby  some  installations 
would always be required to go to land, and some could be considered for sea disposal 
on a case by case basis. How many  of these  'IMO'  large steel  installations  should  be 
considered  on a case by case basis  is fundamental  to the decision.  Possible  solutions 
to  the  impasse  could  include  retaining  the  IMO  criteria,  setting  new  ones,  or  side-
stepping the issue by prohibiting  sea disposal of all installations and concentrating  on 
the exception clause. 

11 

The  Commission  Services  havc  continuaily  stressed  that  to  be  effective  any 
3.3. 
OSPAR  Decision  has  to  be  supported  by  all  the  Contracting  Parties  and  to  that  end 
have  altcmpled  lo  a  uertain  exlent  to  mediate  betvveen  the  two  groups  of  inlerest, 
mindliil ol'lhc posilion adoptcd  by the Commission  at the  1995 North  Sea Conlcrcnce 
and lhc Hndings oflhc  Conimission Services" Technical  Review. 

3.4. 
in  May  1997 the  UK  Government  launched  a review  of  UK policy  regarding 
environmental  protection  and  exploration  ancl  production  of  hydrocarbons  offshore 
and  initial  statements  to  the  press  and  to  the  OSPAR  Commission  meeting  in 
September  1997 suggest that the UK are moving more towards the position taken by 
the other EC Member States; in particular that  there should  be a presumption  against 
disposal at sea. However, there are still major areas of disagreement over the form and 
content of the draft  decision. 

The  Decision  is expected  to  be agreed  at the  OSPAR  Ministerial  Meeting  in 
3.5. 
July  1998. By that time the OSPAR Convention  should have entered into force. In the 
event  that the new Convention  is not ratified,  adoption  of a Decision  would  formally 
be by the Oslo Convention where the European Community is an observer. 

4. 

Additional issues  to be considered when assessing options 

In  addition  to  the  lcchnical  and  cnvironmental  issues  outlined  above  the  following 
points are also highly relevant -

4.1.  Member States 

4.1.1.  Removal and disposal costs are met initially by the owners of the installations, 
the  oil  companies,  which  in  some  instances  have  an  element  of  state  participation. 
Because  such  expenditure  is  to  a  large  extent  tax-  deductible,  Member  States  may 
themselves  have  to  fund  indirectly  a part  of  the  costs  via reduced  tax  revenues.  For 
exarnple,  the  estimated  cost  to  the  UK,  which  is the  Member  State  which  could  be 
most substantially  affected  by any tightening up of existing rules, is up to 70% of any 
additional  removal and disposal costs. 

4.1.2.  The  UK  currently  has  the  majority  of  the  larger  steel  installations  but  more 
Member  States  could  be materially  affected  in the  future  if they  establish  significant 
offshore  oil and gas exploration  and production. The UK has appeared  to be strongly 
in  favour  of  adopting  a  case  by  case  approach  and  would  probably  give  greater 
emphasis  to  a cost  benefit  or  cost  effectiveness  analysis  of the  disposal  options than 
other Member States with such installations. 

12 

4.2.  Norway 

4.2.1.  Norway  is  the  other  country  which  currently  could  be  substantially  affected 
and  as  an  EEA  meinber  would  eventually  be  subject  to  Communily  legislation. 
Currently  Norway  takes  a  similar  approach  10  the  UK  on  the  decision  process 
although  because  the  Norwegian  state  share  of  the  costs  is  met  by  an  actual  cash 
payment  to  the  owner  (based  on  the  tax  history  of  the  oil  or  gas  field  in  question) 
approval  by  the  Storting,  the  Norwegian  Parliament,  is  required.  The  possible 
fmancial  effects  would  therefore  be  reflected  by  an  increase  in  public  expenditure 
rather than in the UK case by a decrease in tax revenues. 

4.3. 

Industry 

4.3.1.  The exploration  and production  industry  is strongly  opposed  to any change in 
the  current  case by  case  approach,  particularly  with  regard  to the  larger  installations 
which they consider to include all the  100 or so installations which are not required to 
be completely  removed  under  the  IMO Guidelines.  Initially  technical  feasibility  was 
stressed  as  the  most  importanl  factor  but  increasingly  additional  costs  and  safety 
faclors compared to environmental  gains have been emphasised  by the industry. Their 
association  Is & P Forum has chailenged some of the  general  cost estimates contained 
in John Brown's Technical  Review as not being representative of individual  cases and 
have  quoted  the results  of studies  relating to two individual  installations  which  were 
significantly  higher than the John Brown estimates. The offshore  contracting  industry 
on  the  other  hand  has  consistently  argued  that  all  the  steel  structures  can  be  safely 
removed but have maintained  a slightly  lower profile.  Their association  IPLOCA  did 
not  challenge 
the  cost  estimates  when  they  provided  their  comments  on  the  John 
Brown Technical Review. 

4.3.2.  The  fishing  industry's  association  Europeche's  policy  is  to  call  for  the 
complete  removal  of  all  installations  when  they  are  decommissioned.  The  fishing 
industry  has  traditionally  been  concerned  that  offshore  exploration  and  production 
could  affect  fishing  opportunitics  through  pollution,  by  restricting  the  area  available 
for  lishing and by installations giving rise to damage to fishing gears. 

4.4. 

Environmcntal Non-Governmental Organisations 

4.4.1.  Environmental  groups  remain  strongly  in  favour  of  bringing  the  steel 
installations  to  shore  for  recycling  and/or  disposal  although  their  attitude  towards 
concrete  installations  has been  somewhat  modified.  Much  emphasis  is placed  on the 
duty  to take  a precautionary  approach  given the uncertainties  of  sea disposal  and  on 
the difficulty  of justifying  what is seen as an exceptionally favourable treatment of the 
oil  and  gas  industry  as regards their  waste. This  is particularly  so given  the  trend  in 
international  and  EC law is towards  less, rather than  more, disposal  of  wastes  in  the 
sea. 

13 

4.5.  Qucstions relating to liability for abandoned or dumped installatioris 

4.5.1.  Although  UNCLOS  is  silent  on  thc  question  of  liability,  the  1989  1MO 
Guidelines and the  1996 Protocol to thc London Convention  1972 require Contracting 
Parlies  to  address Ihc question  of  liability.  For cxample, the  IMO guidelines  require 
coastal  Stales  to ensure  that  Ihc  legal  title  to  installations  and  structures  which  have 
not bcen entirely  removed from  the sea bed is unambiguous and that responsibility  for 
maintenance and the financial  ability to assume liability for future  damages are clearly 
established. 

4.5.2.  It is likely  that, in most cases, liability  will remain with the original  owner of 
the  installation.  For  example,  the  UK's  consultative  document  "Guidance  Notes  for 
Industry  - Abandonment  of offshore  Installations  and  Pipelines  under  the  Petroleum 
Act  1987 (1995) recognised  that  abandonment  would not normally  involve  a change 
in  ownership  and  therefore  the  residual  liability  for  any  compensation  or  damages 
remained  with  the  original  owners  in  perpetuity.  Although  such  an  approach  is  in 
accordance  vvith  the  polluter  pays  principle,  perpetual  liability  raises  a  number  of 
issues  of  concern,  principally  whether  such  owners  can  be  effectively  called  to 
account if damage is caused in the future. 

4.5.3.  An alternative approach would be that the State assumes responsibility  for the 
disused  installations.  In the American  example, some American  States have  accepted 
responsibility  for  certain  abandoned  platforms.  When  the  relevant  agency  of  these 
Stales  issues a permit to the owner  for disposal  at sea it absolves the owners from  any 
subsequent  liabilities  Industry  appears  to  favour  some  form  of  limitation  or  transfer 
of liability  to a state authority. Whether other States would be prepared to do the same 
is not clear. 

4.5.4.  Under the existing rules the importance of establishing clearly who is the legal 
owner of any  installation disposed of at sea, and who has financial responsibility  for it 
has  been  recognised.  Whether  the  State  or  Industry  is  ultimately  responsible  is  less 
important than ensuring  that at the time that disposal  at sea takes place responsibility 
is clearly  established, thereby ensuring  the necessary effective  protection for  users of 
the sea. 

4.6. 

Competition and competitiveness 

4.6.1.  In  theory  different  standards  could  lead  to  problems  with  competition.  The 
North  Sea  is  a  mature  oil  and  gas  province  with  a  stable  regulatory  regime  and  the 
additional  costs of a complete removal and disposal  on land policy are not material to 
the  investment  decision.  They  arise  at  the  end  of  an  income  stream  of  a  number  of 
years and their net present cost at the time of the development decision are negligible. 
It  is therefore  unlikely  that there  would  be a serious  danger  of diverting  investment 
away from  the North Sea to other regions on cost grounds. 

14 

in  particular  waste 
regards  environmental  policy  and 
4.6.2.  Ilowever,  as 
managemenl,  should  two  regions  apply  different  standards  therc  may  be  an  issue. 
Ilowever,  Community  negotiation  and  implementation  would  ensure  uniformity 
across  regions  where  appropriale  and  therefore  avoid  any  possibility  of  competition 
problems  in  this  area.  This  would  effectivcly  transfer  a  disagreement  arising  in 
OSPAR  to the Community. 

4.7. 

Third Countries 

4.7.1.  Community relations with 3rd countries other than Norway might also become 
an issue if complete removal  were to become a general requirement  subject  only to a 
restricted  number of exceptions  as a number of the companies  operating  in the North 
Sea have as their ultimate parent non EC or 3rd country corporations. For example in 
the  United  States  of  America  although  at  present  complete  removal  is  generally 
required there is extensive reuse under a 'rigs to reefs'  programme and therefore  there 
is in effect  disposal  at  sea, albeit  via  'reuse'.  However,  there  are  few  installations  of 
the  size  of  the  large  North  Sea  ones,  certainly  none  have  reached  the  end  of  their 
useful  lives yct. Controversy  surrounds  the transferability  of  'rigs  to  reefs'  policy  to 
the  North  Sea  where  conditions  are  quite  different  from  the  Mexican  Gulf.  Within 
OSPAR  it  is theoretically  permilted  but  the  necessary  guidelines  have  not  yet  been 
drawn up and agreed. As any guidelines or regulations would apply to all installations, 
regardless  of  the  nationality  of  the  owner,  there  should  be  no  question  of 
discrimination against 3rd country corporations. 

5. 

The Community dimension 

5.1.  Disposal  of decommissioned offshore  installations situated where the Member 
States exercise jurisdiction  is clearly  an issue for  which  the Community  can  exercise 
competence, cf.  Article  130r(l)  of the  EC Treaty.  Furthermore, the Community  may 
exercise  external  competence  for  environmental  questions,  cf.  Article  130r(4)  of  the 
Trealy  and  may  therefore  participate  on  behalf of the  Member  States  in  international 
negoliations.  The  scope  of  the  draft  OSPAR  Decision  is  both  new  and  existing 
installations and  it will therefore  affect  both the known areas where there are existing 
installations as well as the as yet unknown areas where any future  installations may be 
placcd. 

5.2.  An  important  environmental  challenge  posed  by  decommissioned  offshore 
installations is their potential to cause pollution by hazardous substances, including oil 
residues,  both  from  the  installations  themselves  and  from  associated  piles  of  drill 
cuttings.  Other  important  environmental  challenges  include  substantial  amounts  of 
materials containing  natural  radioactive  substances  of low specific  activity  as well  as 
the management and disposal of the very large amounts of demolition waste from  the 
"physical  structures  of  the  installations.  Also, the  decommissioning  issue  raises  non-
environmental  questions concerning the safeguarding  of other uses of the sea. 

15 

is 

into 

therefore  clearly  an 

the  marine 
5.3.  Hazardous  and  radioactive  substances,  once  released 
environment,  be  freely  transported  in  the  sea  across  boundaries  in  aceordanee  with 
prevailing currents and  meieorological  condilions and cause pollution.  In this contcxt, 
the  need  to  remove  polJuled  driil  euîtings  may  influenee  decisions  on  the  need  for 
complete removal  of installations  from  the sea bed. The requirement  to protect the sea 
against  such  pollution 
international  one.  Substantial 
Community  legislation to prevent direct and indirect pollution of the sea by hazardous 
substances  is  alrsady  in  place.  Examples  of  such  important  legislation  are  inter  alia 
Directives  76/464/EEC  (discharge  of  dangerous  substances)  and  76/769/EEC 
(restrictions on marketing  and  use  of  certain  dangerous  substances  and  preparations) 
as  well  as  risk  asssssment  framework  laid  down  in  Counciî  Regulation  793/93/EEC 
(risk  assessment).  Also,  the  Community  has  set  basic  safety  standards  in the  area of 
radiation  exposure  through  Direclive  96/29/EURATOM  (basic  safety  standards).An 
OSPAR  Decision  on offshore  installations couîd, depending on  its contcnl undermine 
somc  of the envircnmental  beneilts  resuîting  from  the impiementation  of Community 
legislation  concerning hazardous substances and radioactive exposure. 

5.4. 
in the area of waste disposal, for hazardous as weli as non-hazardous  waste, a 
Community  poliey  and  extensive  Community  legislation  is  already  in  place,  in 
particular  Directives  75/442/EEC  (waste  framework)  and  91/689/EEC  (hazardous 
waste).  The  objsctives  of  the  waste  legislation  include  the  reduction  of  risks  to  the 
environment  from  hazardous  waste,  the  protection  of  human  heaîth  and  the 
environment  against harrnful  effects  caused by  transportation, treatment  and  dumping 
of  waste,  and  the  promoiion  of  waste  recovery  with  a  view  to  the  conservation  of 
natural  resources. The waste legislation  inter alia prohibits the abandonment  of waste, 
rsquirs  waste  to  be  treated  without  using  methods  which  could  cause  harm  to  the 
environment  and  without  risk  to water  and require  the  separation  of hazardous  waste 
from  non-hazardous  waste  and  its  subsequent  safe  treatment  and  disposal.  There  is 
thus  a  substantial  Comrm.inity  interest  in  ensuring  coherence  of  a  future  regime  for 
removal  and  disposal  of  offshore  installations  and  Community  waste  poîicy  and 
legislation. 

Protection  of  species  and  their  habitats  and  conservation  of biodiversity  is an 
5.5. 
area  which  requires  concerted  action  by  the  Member  States.  The  Community  has 
therefore  adopted  Jegislution  in  this  area,  in  particular  Directives  79/409/EEC  (wild 
birds)  and  92/43/EEC  (conservation  of  natural  habitats).  As  measures  taken  with 
regard  to  removal  and  disposal  of  offshore  installations  may  have  effects  on  species 
and  habitats  ,  the  disposal  of  offshore  installations  is  clearly  an  issue  where  an 
international  soîution is needed. 

The  Study  carried  out'for 

5.6. 
the  Commission  Services  showed  that  if  sea 
disposal  is  to  be  carried  out,  the  only  generally  cost-effective  soîution  is  to  topple 
installations  at  the location where they  have been  in  operation.  Although  there  is no 
scientifïc  evidence to  suggest that  the presence  of such  structures  on  the  seabed  will 
enhanee marine life  ovsrall, they might givs rise to a local concentration  of fishes and 
other animal groups on and around  the structures, most likely to the detriment of other 
areas. 

16 

(n addition, (he seabed at tlie large majority  of (hese localions is highly  polluted due lo 
Ihc  presence  of  large  piles  of  oil  conlaminaled  drill  cuttings  from  the  oil  and  gas 
exploitation  uclivities.  Sea  disposal  might  therefore  have  the  effect  of  unnecessariiy 
exposing  marinc  life  to oil  poilution  which could, apart  from  any  gcneral delrimental 
effccts  of such exposure, also result  in the lainling of  fish.  Sea disposal  may  therefore 
offset  the  benefits  of  Community  legislation  in  the area  of  protection  of  species  and 
habitats  and  may  in  the  future  give  rise  to  infringements  of  this  legislation. 
Furthermore, it may impact on the quality of fish caught for human consumption. 

5.7. 
Safeguarding  other human uses of the sea and the seabed  is another  important 
issue to be taken into acco'unt. An important example of this is ensuring  the safety  of 
navigation  which is appropriately taken care of internationaliy  by the IMO guidelines 
on  removal  of  installations.  Another  important  issue  is  the  interaction  of  removal 
decisions  with the management  of fisheries  in the open sea which is a competence of 
the  Community  under  the  Common  Fishcrics  Policy.  Clearly,  the  degree  of  removal 
of  decommissioned  offshore  installations  will  inlerfere  with  the  availability  of  the 
arcas  concerned  for  cerlain  types  of  fisheries,  with  the  safety  of  fishcrmen  and  will 
increase  the risk  of  loss of  gears and  vessels.  Measures  adoptcd  concerning  rcmoval 
and disposal  of decommissioned  offshore  installations therefore  interfere  considerably 
with  the  Common  Fisheries  Policy  in  particular  by  interfering  with  the  management 
of arcas available for  fishing. 

Although the influence  of decisions on removal  and disposal  of offshore  installations 
on  the  production  price  of  oil  and  gas  is  negligible,  there  is  nevertheless  a 
considerable  Community  interest  in  ensuring  that  the  oil  and  gas  exploration  and 
exploitation  industry  is  subjected  to  the  same  approach  to  removal  and  disposal 
requirements  across  the  Community  thus  ensuring  that  such  requirements  do  not 
become a competition factor. 

In  summary,  there  is  a  preponderant  Community  interest  in  the  issue  of 
5.8. 
removal  and  disposal  of  disused  offshore  oil  and  gas 
installations.  In  the 
cnvironmcntal  area  il  is  related  particularly  lo qucslions of  poilution  with  hazardous 
substances  and  low-Ievel  radioactive  wastes,  ha/ardous  and  non-hazardous  wastes, 
conscrvation  of  biodiversity  and  protection  of species of habitats.  In other areas,  it  is 
particularly  related  to  the  Common  Fisheries  Policy  and  to  ensuring  a  common 
approach  across  the  Community  to  decommissioning  requirements  and  to  residual 
liability thus ensuring that these do not become competition  factors  between Member 
States. A clear and unambiguous  Community  policy and implementation  will notably 
help  ensure  the  uniform  application  and  enforcement  of  Community  policy  and 
measures in this area both within the same seas and between different  seas, and will in 
particular mitigate the inherent risks of tncompatibilities and unequal treatment  which 
might  develop  if  different  approaches  are  adopted  by  the  different  regional  seas 
conventions. 

It is therefore appropriate for the Community to take action concerning the disposal of 
offshore  oil  and  gas  installations.  It  is clear that  the objectives  in this  area cannot  be 
sufficiently  achieved  by  the  Member  States  and  can  therefore  be  better  achieved  by 
the Community. 

17 

6. 

Dgfining a Community  flosatàoa 

6A. 
The  disposaî  of  offshore  oil  and  gas  installation  is  an  issue  of  direct 
Community  interest.  in  ihe absence of -direct Community  action  initiatives would  be 
limited  to  mdividual  Member  States'  negoîiaticns  within  the  various  regional 
Conventions  and  action  would  essentially  be  at  the  individual  MS  level.  Each  MS 
might be bound  to  implement  only  the specific  rules which they  supported and were 
adopted by ths Con-venticns to which they are a Contracting Party. The risk would be 
the laek of a ccherent àpproach across the Community îeading to unequaî treatment of 
compcting  industries  and  possible  contradictory  environmental  protection  measures. 
Even  if  similar  rules  were  to  be  adopted  by  the  different  regional  sea  Conventions 
they  mightbs  applied  very  differently  across the  Community,  both within  the  same 
seas and between different  seas. Furthermore Convention decisions maybe difficult  to 
cnforcs.  This  potenti-al  'ack  of  consistency  and  enforcement  could  îead  to  a 
requirement  for  Community  action  at  a  îaîer  daîe  to  rectify  the  situation  and  avoid 
Community enterprises being faeed with a range of different  regulatory regimes. 

6.2.  One  way  of  moving  forward  would  be  to  propose  internal  Community 
legislation,  such  as a Council  Pirective,  immediately.  The nature  of the  Community' 
and its îegislaîivs process would aîiow for a uniform  application and enforcement  but 
only  across thç EC and  EEA. The disadvantage of this àpproach  is that  only  EC and 
EEA  Member  States  would  be  bound  to  the  common  àpproach  whereas  other  third 
countries  with  which  we'share  the Seas concerned  would not  be bound  to  implement 
the same or similar measures without the Community takirig the initiative to negotiate 
and  adopt  such  rules  in  the  relevanî  regional  seas  Conventions.  Aîthough  this 
àpproach  would have the advantage of applying to all EC Member States immediately 
ie also to those Member  States outside  OSPAR  - namely Austria, Greece and Italy it 
would  only  apply to Norway  after  a Decision  of the EEA  Joint  Comrnitîee. It  could 
also  be  interpreted  as prejudicial  to  Community  interest  in  other  OSPAR  policies  if 
the  Commission  were  to  be  seen  to  press  ahead  separately  for  action  via  EC 
legislation  raîher  than  via  the  newly  ratifîed  OSPAR  Convention.  Furthermore  it 
could be seen as an attempt to .exclude. Norway from negoîiaîions on any fmal policy. 

6.3.  A rnorë prudenî and appropriate  course of action would  be negotiation  by the 
Community  of  the.  rules  and  regulations  via  the  respective  regional  marine 
environmental Conventions, which would ensure that appropriate policies are  uniform 
across  regions,  exîending  where  applicable  to  third  countries  outside  the  EC. 
Application  and  enforcement  for  3rd  countries  would  elearly  remain  under  the 
Conventions  but  EC  and  EEA  Member  States  would  benefît  from  established 
Community  application  .and enforcement  standsrds-.  Action  in  this  way  via  OSPAR 
ensures  that  advantage  can  be  taken  of  the  considéràble  amount  of  effort  already 
Qxpendsû within  that  Convention  on  negotiations  with  the  prospect  of  achieving 
agreement in July of this year and.enabies Norway  to.play  a fuller  role in negotiating 
the Decision. Similar-Community action in the other Regional Conventions could then 
be taken as necessary, extending the policy to include more States. 

7. 

ConcCgsÊons 

l.\. 
The  recammendeé  approach  is therefcre  that  of  Ccmmumty  negotiaticn  and 
irripïcmenîation  of .a  poîicy  on  remova!  and  disposal  of  ofYshore  oii  and  gas 
in&tallations via muîti&teral agreements in intern&iional fora such as OSPAR. 

7.2. 
At  this stage, the Community  shquid airn to retain maximum llexibiitty  over 
the  detaiîed  ccntent  of  any  Decision,  regdaiion  or îegislation  thereby  avoiding  the 
risk  of  prejucicing  the  current  attempts  within  OSPAR  to  reach  an  agreed  solution. 
However,  in order  for  any  OSPAR  Decision  to  be  potiticaUy  acceptabte,  it  must  be 
iine with ciïrrent Community poiicies and wherc policy is under review be in line'with 
the  îatest  anaîyses  and  concfusions  and  accordingiy  broad,  rather  than  detailed 
objéctives are  specifîed. 

7.3.  Any  action  undertaken < by  the  Community  would  airn  at  a  high  level  of 
environmenta! protection  and  shou!d  ensure that  the disused  instaliations  in  question 
are  treated  in  a  manner  consistent  with  which  other  wastes  are  treated  under 
Community  iegislation  and with  Community  environment and energy  policy  as weli 
as with the needs of the Common Fisheries Poiicy. 

7.4. 
It  must  also  take  due  account  of  the  results  of  the  Commission's  externaity 
prcduced  technical  review  in  1996,  in  particular  the  concfusions  on  technica! 
feasibility  and  safety,  and  the  results  of  ongoing  internal  study  and  analysis  which, 
with  some exceptions,  support the  original position  taken  by the  Commission  at  the 
4th North  Sea Conference  in  1995 that complete removaî  and recycling  and  disposal 
on land is the preferred  option, 

7.5. 
The  OSPAR  Decision  should  also  rccognise  that  even  under  the  current 
regimes  in  force  it  is  aîready  generally  accepted  that  few  instaliations  are  even 
candidates  for  sea  disposal  and  that  the  regulations  themseîves  express  a  clear 
preference  for land disposal. 

Therefore the OSPAR Decision must be based on the main rule that complete remova! 
and recycling and disposal on land is preferable and that the scope for any exceptions 
to this, where total  or partial removai  and disposal at sea may be considered,  should 
be limited to a few instaliations and clearly  defined. 

7.6. 
Following this communication, and on the basis of  Council Conclusions of 16 
December  1997 authorising the Commission to negotiate and vote in the name of the 
Community  on  Decisions  under  Article  10, para  3  of  the  OSPAR  Convention,  the 
Commission  will forward  to the Council  a separate document  requesting the Council 
to endorse recommended specific negotiating directives. 

19 

In  as  lar  as  thc  Convcnlion  pcrmils,  any  Dccision  must  dcal  with  all  Ihc 
7.7. 
relcvanl  issuos,  and  providc  for  maximum  consullation  and  dialoguc  bctwccn 
intcrestccl parties in a transparcnt  lashion. On Ihc basis of these principles the OSPAR 
dccision  should  satisiy thc following  objcctives: 

a. 

b. 

c. 

d. 

c. 

for  a 

identified 

limited  number 

instdlations,  except 

an  OSPAR  dccision  based on the principle of prohibitionof disposai  at sea of 
such installations; 
in  special 
all 
circumstances  on  the  basis  of  individual  evaluations,  taking  into  account  all 
relevant aspects including technieal, environmental, safety and cost factors, are 
completsly  removed  when decommissioned  and  brought  to  land  for  recycling 
and safc disposai  of unavoidablc residucs; 
large  concrcle  inslallations  arc  cxcmplcd  irom  the  requirements  undcr  b.  as 
there arc currcntly no provcn technologics available; 
decisions  to  lcave any  instaliations wholly  or partly  in place or  to  dispose  of 
them,  wholly  or  partly,  in  the  sea  are  prepared  and  taken  in full  consultation 
with other Contracting Parties and with interested organisations; 
new  installalions  (post  1 January  1998) should  be completely  removed  when 
decommissioned  and  brought  to  land  for  recycling  and  safe  disposai  of 
unavoidable  residues,  whenever  this  is  feasible,  safe,  and  does  not  pose  a 
significant  risk to the environment. 

7.8. 

In addition, the OSPAR decision should ensure: 

z 

* 

that it be subject to a regular thorough review, at least every five years, 
to  snsure  that  deeommissioning  experience,  relevant  scientific  and 
technological  advances,  and  all  other  relevant  information  including 
the results of individual  evaluations made under b)  above are properly 
taken into account. 
that  the  legal  title  to  installations  and  structures  which  have  not  been 
entirely  removed  from 
that 
responsibilily  for  maintenance  and  liability  for  future  damages, 
including  the  financial  ability  io  assume  such  liability,  are  clearly 
estabhshed. 

is  unambiguous,  and 

the  sea  bed 

20 

ISSN 0254-1475 

COM(98) 49 finai 

&  rt \£ 

"^"f" 

flf  ENTS 

i.N 

14  12  07  15 

Catalogue number  :  CB-CO-98-iOO-EN-C 

ISBN 92-78-31251-7 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg