Decommissioning Agreement Definition

By September 16, 2021 Uncategorized

Until a few years ago, “dismantling was relatively rare in the United Kingdom”[2]. The potential growth of the dismantling industry as we know it today is the result of the UK`s continental eleven becoming a mature hydrocarbon area and oil and gas fields are getting closer and closer to the end of their exploitation. As a result, oil and gas operators are making considerable efforts to exploit new business opportunities. A decommissioning programme, as proposed and approved by the DEEC, sets out the modalities for the closure of installations and pipelines by the operators concerned, who may be required to carry out both main activities (the actual distance) and ancillary activities such as debris removal or handling of radioactive materials. The decommissioning process consists of several phases. In the oil and gas industry, and more particularly in the offshore industry, drilling security operations are first launched, then the structures and pipes that connect the platform to the processing centers. These operations must be carried out with the utmost care and require both specialized personnel and sophisticated techniques in order to avoid effects on the environment. The removal phase is followed by the identification of suitable sites for the storage of unusable materials and the final transformation of products potentially harmful to the environment, such as metal and plastic wrecks, flammable oils, etc. According to the Closure Report of Oil & Gas UK[3], published in 2013, the cost of meeting decommissioning commitments on the UK`s continental eleven from 2013 to 2040 will amount to around GBP 31.5 billion, for a total of EUR 10.4 billion.

Total planned spending for the period 2013-2022 is 2013 to 2022. Indeed, some 475 production facilities, 10,000 km of pipelines and gas, 15 oil terminals and 5,000 drilling facilities are expected to be closed over the next 30 years. Boskalis is a listed multinational, which focuses on civil, naval and offshore services, as well as the contract. Boskalis has a long decommissioning balance sheet and an operating establishment in the United Kingdom in the form of boskalis-Westminster, a subsidiary. Boskalis currently has several contracts relating to floating production facilities and fixed offshore platforms, including subsea facilities. Therefore, sophisticated resources and proper planning are of the utmost importance to address the main elements of decommissioning from a commercial and environmental point of view, i.e. costs and safety. B. The international regulatory framework of the decommissioning process A decommissioning safety agreement is a different agreement from that of a joint operating agreement, as it focuses primarily on enhanced safety by the parties in order to counteract the cost of decommissioning activities. As remarkable as the industry`s intention was, the issuance of such forms has proven to be a major impediment to enforcement.

Indeed, it is stated that large oil and gas operators, because of their concerns about their liability arising from decommissioning activities, transfer their interests to small oil and gas companies with low solvency and therefore limited ability to preserve safety. The result is a complex distribution of debts and the subsequent risk by the government of taking on part of the costs (not to mention the damages, if part of the activities prove to be harmful….. . .