Guidance Notes

Decommissioning of
Offshore Oil and Gas Installations and Pipelines
under the Petroleum Act 1998

Produced by

Offshore Decommissioning Unit

Department of Energy and Climate Change
Atholl House
86-88 Guild Street
Aberdeen
AB11 6AR

Tel. 01224 254075

Version 6
March 2011
 CONTENTS

Section Paragraph Page

INTRODUCTION 1

1. GOVERNMENT POLICY AND THE UKS 2

INTERNATIONAL OBLIGATIONS

Policy 1.1-1.2 2

International Obligations 1.3-1.7 2

The Main Features of OSPAR Decision 98/3 1.8-1.11 3

2. LEGISLATION 5

Description of the Legislation 2.1-2.9 5

Petroleum Act 1998 2.10-2.12 6

Charging a fee for approving and revising 2.13-2.16 7

offshore decommissioning programmes

Energy Act 2008: Oil and Gas 2.17-2.18 8

Decommissioning

Energy Act 2008: Gas Storage and Importation 2.19-2.22 8

Infrastructure and Carbon Capture and Storage

3. DECOMMISSIONING OBLIGATIONS UNDER 10

THE PETROLEUM ACT 1998

The Process 3.1-3.14 10

Manager of an Installation 3.15-3.16 12

Definition of an Installation Tiebacks 3.17-3.21 13

Energy Act 2008 Amendments 3.22-3.28 14

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 CONTENTS

Section Paragraph Page

4. CHANGES OF OWNERSHIP AND FINANCIAL 4.1 20

SECURITY

5. PLANNING FOR DECOMMISSIONING 21

The Decommissioning Programme Process 5.1-5.17 21

Deferral and Phased Decommissioning 5.18-5.23 24

Median Line Facilities 5.24 25

Role of Other Government Departments 5.25-5.26 25

6. DECOMMISSIONING PROGRAMMES 26

Content 6.1-6.11 26

Submission 6.12-6.20 28

Derogation Cases 6.21-6.23 29

Consultations 6.24-6.29 30

Approval 6.30 31

Reporting Progress 6.31-6.32 31

Changes to Approved Programmes 6.33 31

7. THE IMPACT OF OSPAR DECISION 98/3 33

General 7.1-7.6 33

Topsides 7.7 34

Steel Installations weighing less than 10,000 7.8-7.9 34

tonnes

Steel Installations weighing more than 10,000 7.10-7.12 34

tonnes

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 CONTENTS

Section Paragraph Page

Gravity Based Concrete Installations 7.13-7.14 35

Hybrid Installations 7.15-7.17 35

Floating Installations 7.18-7.20 36

Sub-sea Installations 7.21-7.22 36

Exceptional Circumstances 7.23 37

8. IMO GUIDELINES AND STANDARDS FOR THE 8.1-8.5 38

REMOVAL OF OFFSHORE INSTALLATIONS
AND STRUCTURES

9. TREATING, KEEPING, DISPOSING OF WASTE 9.1-9.2 40

10. PIPELINE DECOMMISSIONING 41

General Approach 10.1-10.5 41

Leaving in Place 10.6-10.7 42

Removal 10.8-10.10 43

Monitoring 10.11-10.12 43

Deferral 10.13-10.16 44

Consultation 10.17 45

Territorial Sea 10.18 45

11. DRILL CUTTINGS 11.1-11.5 46

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 CONTENTS

Section Paragraph Page

12. ENVIRONMENTAL CONSIDERATIONS 47

Environmental Impact Assessments 12.1 47

Environmental Regulations 12.2-12.8 47

Environmental Surveys 12.9-12.10 49

Lophelia pertusa/Sabellaria 12.11 49

Debris Clearance 12.12-12.15 49

Sampling Post-Decommissioning 12.16-12.19 50

Reporting 12.20 50

13. CLOSE-OUT REPORTS 13.1-13.3 51

14. POST-DECOMMISSIONING MONITORING OF 14.1-14.5 53

REMAINS

15. MARKING OF REMAINS AND SAFETY ZONES 15.1-15.6 54

16. RESIDUAL LIABILITY AND 16.1-16.5 56

DECOMMISSIONING LEGACIES

17. INDUSTRY CO-OPERATION AND SYNERGY 17.1-17.2 57

18. THE UK OIL PORTAL 18.1-18.4 58

19. PROVISION FOR HISTORICALLY IMPORTANT 19.1-19.6 59

RECORDS

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 CONTENTS

ANNEX A: ASSESSMENT CRITERIA FOR OSPAR 60

DEROGATION CANDIDATES

ANNEX B: OSPAR DECISION 98/3 ON THE DISPOSAL OF 66

DISUSED OFFSHORE INSTALLATIONS

ANNEX C: THE CONTENTS OF A DECOMMISSIONING 78

PROGRAMME

ANNEX D: OTHER LEGISLATION, REGULATIONS AND 87

CONTROL

ANNEX E: ROLE OF OTHER GOVERNMENT DEPARTMENTS 97

ANNEX F: DECOMMISSIONING LIABILITIES 101

ANNEX G: DECOMMISSIONING SECURITY AGREEMENTS 116

(DSAs) TO WHICH THE SECRETARY OF STATE IS
A PARTY

ANNEX H: STATUTORY CONSULTEES FOR A 120

DECOMMISSIONING PROGRAMME

ANNEX I OSPAR RECOMMENDATION 2006/5 ON A 121

MANAGEMENT REGIME FOR OFFSHORE
CUTTINGS PILES

ANNEX J: DECOMMISSIONING PROGRAMME PROCESS 128

FLOWCHART

INDEX 129

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INTRODUCTION

The decommissioning of offshore oil and gas installations and pipelines on the
United Kingdom Continental Shelf (UKCS) is controlled through the Petroleum
Act 1998, as amended by the Energy Act 2008.

The UK's international obligations on decommissioning are governed principally

by the 1992 Convention for the Protection of the Marine Environment of the
North East Atlantic (OSPAR Convention). Agreement on the regime to be
applied to the decommissioning of offshore installations in the Convention area
was reached at a meeting of the OSPAR Commission in July 1998.

The responsibility for ensuring that the requirements of the Petroleum Act 1998
are complied with rests with the Department of Energy and Climate Change
(DECC). DECC is the competent authority on decommissioning in the UK for
OSPAR purposes.

The aim of these notes, which have been prepared by DECCS's Offshore
Decommissioning Unit in Aberdeen, in consultation with other Government
Departments, is to provide guidance to those engaged in preparing programmes
for the decommissioning of offshore installations and pipelines. Account has
been taken of views expressed by operating companies and other interested
parties.

These guidance notes, which were first issued in August 2000, provide a
framework and are not intended to be prescriptive. They will be reviewed
regularly and updated as necessary. We intend to make the process of
submission and approval of a decommissioning programme as flexible as
possible within statutory and policy constraints, allowing adequate time for full
and considered consultation but without unnecessary delay. We recognise that
circumstances will vary from case to case and that differing approaches may be
required.

Furthermore, whilst these guidance notes are intended to provide fairly detailed
guidance to those engaged in preparing decommissioning programmes, they
should not be read in isolation from the relevant legislation.

March 2011

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1. GOVERNMENT POLICY AND THE UKS INTERNATIONAL OBLIGATIONS

Policy

1.1 Government will seek to achieve effective and balanced decommissioning

solutions, which are consistent with international obligations and have a proper
regard for safety, the environment, other legitimate uses of the sea, economic
considerations and social considerations. Our policies and practices on
decommissioning will recognise the need to:

maximise energy production as a contribution to UK energy security,

and

take impacts on climate change into account.

1.2 DECC will seek to ensure that:

interested parties have a clear view of the policy and the procedures;

decisions on decommissioning proposals are based on full

information, are taken in an efficient manner and place as little
administrative burden as possible on the various parties concerned;

decommissioning decisions are consistent with waste hierarchy

principles and are taken in the light of full and open consultations;

decommissioning will be regarded as the last option after re-use of

the facilities for energy or other projects has been ruled out;

disposal decisions in respect of installations that are candidates for

derogation from OSPAR Decision 98/3 are judged against the criteria
and approach set out in Annex A to this guidance.

comparative assessments of decommissioning options take account

of impacts on climate change;

forums exist for the sharing of information, experience gained and

lessons learned.

International Obligations

1.3 The UK's international obligations on the decommissioning of offshore

installations have their origins in the United Nations Convention on the Law of
the Sea of 1982. The Convention entered into force in 1994 and the UK acceded
to it in 1997. Article 60(3) includes the following:

"Any installations or structures which are abandoned or disused shall be removed

to ensure safety of navigation, taking into account any generally accepted
international standards established in this regard by the competent international
organisation. Such removal shall also have due regard to fishing, the protection
of the marine environment and the rights and duties of other States. Appropriate

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publicity shall be given to the depth, position and dimensions of any installations
or structures not entirely removed.

1.4 The competent international organisation for this purpose is the

International Maritime Organisation which in 1989 adopted the IMO Guidelines
and Standards setting out the minimum global standards for the removal of
offshore installations.

1.5 In 1992 a new convention, the Convention on the Protection of the

Marine Environment of the North East Atlantic ("the OSPAR Convention"), was
agreed. This regional convention, which applies to specific sea areas of the
North East Atlantic, including the North Sea and parts of the Arctic Ocean,
replaced and updated the 1972 Oslo Convention on the Protection of the Marine
Environment by Dumping from Ships and Aircraft and the 1974 Paris Convention
on the Prevention of Marine Pollution from Land-Based Sources. The OSPAR
Convention came into force on 25 March 1998.

1.6 In July 1998 at the First Ministerial meeting of the OSPAR Commission, a
new regime for the decommissioning of disused offshore installations was
established under the new Convention. Ministers adopted a binding Decision
(OSPAR Decision 98/3 - reproduced at Annex B) to ban the disposal of offshore
installations at sea.

1.7 Pipelines are not covered by OSPAR Decision 98/3. There are no
international guidelines on the decommissioning of disused pipelines. Section 10
describes UK policy.

The Main Features of OSPAR Decision 98/3

1.8 Under the terms of Decision 98/3, which entered into force on 9 February
1999, there is a prohibition on the dumping and leaving wholly or partly in place
of offshore installations. The topsides of all installations must be returned to
shore. All installations with a jacket weight less than 10,000 tonnes must be
completely removed for re-use, recycling or final disposal on land.

1.9 The Decision recognises that there may be difficulty in removing the
'footings' of large steel jackets weighing more than 10,000 tonnes and in
removing concrete installations. As a result there is a facility for derogation from
the main rule for such installations. It has been agreed that these cases should
be considered individually to see whether it may be appropriate to leave the
footings of large steel installations or concrete structures in place. Nevertheless,
there is a presumption that they will all be removed entirely and exceptions to
that rule will be granted only if the assessment and consultation procedure,
which forms part of the OSPAR Decision, shows that there are significant
reasons why an alternative disposal option is preferable to re-use or recycling or
final disposal on land.

1.10 The derogation provision for the footings of large steel installations applies
only to those installed before 9 February 1999. All steel installations placed in
the maritime area after that date must be totally removed. It should also be

3
noted that the Ministerial Sintra statement which accompanied Decision 98/3
made clear that new concrete installations would be used only when it is strictly
necessary for safety or technical reasons.

1.11 The Decision provides for review by the OSPAR Commission at regular
intervals, to consider in the light of experience and technical developments
whether the derogations from the general ban on dumping continue to be
appropriate. The most recent review, conducted in 2008, concluded that the
limited operational experience to date of decommissioning concrete
substructures and footings of large steel installations is insufficient to justify
changing the derogation criteria. Nevertheless, there is a clear intent within the
Decision to reduce the scope of possible derogations and it can be expected that
future derogation cases presented to OSPAR will be judged against the advances
in technology or contractor capabilities that may have been achieved at the time.
A further review of the Decision will be undertaken in 2013.

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2. LEGISLATION

Description of the Legislation

2.1 Before the owners of an offshore installation or pipeline can proceed with
its decommissioning they must obtain approval of a decommissioning
programme under the Petroleum Act 1998. It should be noted that although the
Petroleum Act 1998 refers to an abandonment programme the preferred and
generally accepted term is a decommissioning programme.

2.2 Under the 1998 Act a decommissioning programme should contain an

estimate of the cost of the measures proposed; specify the times at or within
which those measures are to be taken or make provision for determining those
times; and, where an installation or pipeline is to remain in position or be only
partly removed, include provision for maintenance where necessary. It is
recognised that where appropriate a decommissioning programme will deal with
both removal and disposal of an installation or pipeline. The contents of a
decommissioning programme are set out more fully in Section 6 of and Annex C
to this guidance.

2.3 In addition to approval of a decommissioning programme, the following

will also need to be obtained as appropriate:

confirmation that the requirements of the Coast Protection Act 1949,

Section 34, Part II have been satisfied;

acceptance of a Dismantlement Safety Case under the Offshore

Installations (Safety Case) Regulations 2005 (installations only);

fulfilment of notification requirements to Health and Safety Executive

(HSE) under regulation 22 of the Pipeline Safety Regulations 1996;

any environmental consents or permits required during

decommissioning activity;

approvals for the shipment of waste; and

approval of a well abandonment programme in accordance with the

obligation contained in the petroleum production licence.

2.4 It is recognised that certain preparatory works which do not prejudice

decommissioning options should be able to be carried out before approval of a
decommissioning programme e.g. removal of some equipment and cleaning.
Details will be discussed with the Operator in each case.

2.5 If a decommissioning programme includes any new deposits in the sea,

for example, of rock gravel or grout bags, a licence may be required under Part II
of the Food and Environment Protection Act 1985.

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2.6 The disposal of materials onshore must comply with the relevant health,
safety, pollution prevention and waste requirements, including in particular Parts
I and II of the Environmental Protection Act 1990.

2.7 In certain circumstances additional authorisation under the Radioactive

Substances Act 1993 may be necessary.

2.8 It is the responsibility of the Operator or contractor, as appropriate, to

obtain the necessary approvals and authorisations.

2.9 Annex D describes in outline the legislation other than the Petroleum Act
1998 which applies to decommissioning and the Government body responsible for
its administration. This includes a list of the main consents and authorisations that
are likely to be required in addition to the approval of a decommissioning
programme. (See also Annex E). The environmental regulations that apply to
offshore decommissioning activity are set out in Section 12.

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Petroleum Act 1998

2.10 The principal legislation is the Petroleum Act 1998 (the 1998 Act) which is
administered by DECC.

2.11 Part IV of the 1998 Act provides a framework for the orderly
decommissioning of disused installations and pipelines on the UKCS.

2.12 The principal provisions of Part IV of the 1998 Act:

enable the Secretary of State, by written notice, to require the

submission of a costed decommissioning programme for each
offshore installation and submarine pipeline. Those persons given
notices are jointly liable to submit a programme;

where a decommissioning programme is approved by the Secretary

of State, make it the (joint and several) duty of the persons who
submitted it to secure that it is carried out;

provide the Secretary of State with means to satisfy himself that any
person who has a duty to secure that an approved decommissioning
programme is carried out will be capable of discharging that duty and,
where he is not so satisfied, require that person, by notice, to take
such action as may be specified;

in the event of failure by those given notice to submit a programme

or secure that it is carried out, enable the Secretary of State to do the
work and recover the cost from those given notice;

provide penalties for failure to comply with notices; and

enable the Secretary of State to make regulations relating to

decommissioning.

Charging a fee for approving and revising offshore decommissioning

programmes.

2.13 It is a fundamental principle of the decommissioning regime that a

person who is responsible for developing or operating an offshore
installation/pipeline should also be responsible for decommissioning at the end of its
useful life. The Department therefore intends to charge Industry a fee for approving
and revising offshore (oil and gas) decommissioning programmes rather than passing
the costs onto the taxpayer which is in line with the polluter pays principle of
environmental law.

2.14 Section 29 of the 1998 Act allows the Department to charge a fee in
respect of its expenditure under Part 4 of the 1998 Act when a person submits an
abandonment programme. The Secretary of State also has a power to charge a fee
in respect of a proposal to revise an abandonment programme (section 34(4)).

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2.15 The charging mechanism will allow the Department to recover its
expenditure for the exercise of its functions under Part 4 of the Act 1998. The
Department will not be seeking to make a profit from such a charge but merely
recover its costs in carrying out those functions.

2.16 The Department will shortly be undertaking a twelve-week consultation to

seek views of relevant stakeholders on the proposals to charge a fee in respect of
offshore (oil and gas) installations and pipelines decommissioning programmes.
Subject to the outcome of this consultation and the Parliamentary process, when
Regulations are made to implement the proposals set out in the consultation
document, the Department will update the Guidance Notes further to reflect this.

Energy Act 2008: Oil and Gas Decommissioning

2.17 Chapter 3 of Part 3 of the Energy Act 2008 (the 2008 Act) amends Part
IV of the Petroleum Act 1998. The 1998 Act consolidated provisions from the
Petroleum Act 1987. Since the regime was originally established in 1987 there
have been changes in business practices in the oil and gas industry, such as
increased participation by smaller companies which have fewer assets and as
such bring increased risks that they might not be able to meet their
decommissioning liabilities. Moreover, experience has shown that it has not
always been possible to share liabilities equitably between parties responsible for
any installation or pipeline.

2.18 The detailed oil and gas provisions of the 2008 Act are discussed in
section 3. In summary, the 2008 Act amends the regime by:

Enabling the Secretary of State to make all the relevant parties liable for
the decommissioning of an installation or pipeline and, where a licence
covers multiple sub-areas, clarifying which licensees will be liable.

Giving the Secretary of State power to require decommissioning security

at any time during the life of an oil or gas field if the risks to the taxpayer
are assessed as unacceptable.

Protecting the funds put aside for decommissioning, so in the event of

insolvency of the relevant party, the funds remain available to pay for
decommissioning and the taxpayers exposure is minimised.

Energy Act 2008: Gas Storage and Import Infrastructure and Carbon
Capture and Storage

2.19 Gas production from the UKCS is declining and it is expected that the UK
will be reliant on imported gas to meet well over half of demand by 2020.
Without sufficient and timely new storage and import infrastructure, there will be
increased risks of a tight gas supply demand balance in the UK in the future.
Companies have already responded to declining UK gas production by investing
in new gas storage and import infrastructure. However, additional investment

8
will be needed as production declines and companies investing in the UK have
sought a clear and stable regulatory framework.

2.20 Prior to the 2008 Act, the UKs offshore legislative regime was primarily
designed for licensing oil and gas production. Chapter 2 of Part 1 of the 2008 Act
creates a new regulatory framework specifically designed for offshore gas
storage and Liquefied Natural Gas (LNG) unloading projects. In addition,
paragraphs 10 and 11 of Schedule 1 amend the definition of the parties that can
be required to submit a decommissioning programme and the definition of an
offshore installation specified in Part IV of the 1998 Act. This ensures the
decommissioning of offshore gas storage and importation infrastructure can be
governed by the provisions in the 1998 Act.

2.21 Carbon Capture and Storage (CCS) is a process involving the capture of
carbon dioxide from the burning of fossil fuels and its transportation and storage
in secure spaces, such as geological formations, including under the seabed.
CCS can be applied to a range of industrial processes including coal-fired and
gas-fired electricity generation. It has the potential to reduce carbon dioxide
emissions by up to 90% of standard coal-fired generation. The Government is
committed to the development of CCS with electricity generation. Most of the
activities involved are standard industrial processes and can be regulated by
established legislation. However, permanent storage of carbon dioxide is a novel
activity, and pre 2008 legislation to control depositions below the surface of the
land and seabed is not well suited to licensing the storage of carbon dioxide.
Chapter 3 of Part 1 of the 2008 Act establishes a framework for the licensing of
carbon dioxide storage and enforcement of the licence provisions. It also applies
existing offshore legislation, including the decommissioning provisions of Part IV
of the 1998 Act, to offshore structures used for this purpose (see section 30 of
the 2008 Act). It is recognised that as CCS is a novel activity it may prove
necessary over time as experience is gained to modify Part IV of the 1998 Act
and section 30 also enables regulations to be made modifying the provisions of
Part IV in relation to CCS.

2.22 The decommissioning provisions of Part IV of the 1998 Act therefore

apply to offshore facilities established for the purposes of gas storage, LNG
unloading projects and CCS. The framework for decommissioning outlined in
these guidance notes is therefore relevant to such projects and will be updated
to reflect this as experience is gained. However, it should be noted that although
the provisions of chapter 3 of the 2008 Act will apply to the territorial sea
adjacent to Scotland (0 to 12 nautical miles), Scottish Ministers have the relevant
legislative, licensing and enforcement powers for CCS projects in this area. The
functions of Part IV of the 1998 Act will be exercised by the Scottish Ministers in
the case of carbon dioxide storage installations licensed by them.
Correspondence regarding the decommissioning of CCS infrastructure in the
territorial sea adjacent to Scotland should therefore be addressed to the Scottish
Government.

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3. DECOMMISSIONING OBLIGATIONS UNDER THE PETROLEUM ACT
1998

The Process

3.1 Section 29 of the 1998 Act enables the Secretary of State to serve
notices requiring the recipient to submit a costed decommissioning programme
for his approval at such time as he may direct. The programme (referred to in
the 1998 Act as an abandonment programme) should contain the measures
the notice holder(s) propose to take in connection with the decommissioning of
the installation(s) or pipeline(s) listed. The 1998 Act consolidated Parts I and II of
the Petroleum Act 1987 with various other petroleum enactments. Notices
previously served under section 1 of the 1987 Act will continue to be valid.
Amendments made to the 1998 Act by the Energy Act 2008 are incorporated in
the following paragraphs and detailed later within this section.

3.2 For installations, notices may be served not only on the licensees but also
on the company that manages the installation (we expect this to be the Operator,
see paragraph 3.15), the owners of the installation and the parties to a Joint
Operating Agreement (JOA) or similar agreement. In the first instance, notices
will be served on all the companies in these categories. However, notices under
section 29 may also be served on parents or other associates. The option of
serving more widely will be pursued only in cases where it is judged that
satisfactory arrangements, including financial, have not or will not be made to
ensure a satisfactory decommissioning programme is carried out.

3.3 The administrative process is started when a field development is

approved and construction of the installation has commenced. If it has not been
included as part of the field development plan, at this stage DECC will send a
Facility Information Request (FIR) to the person with management responsibility
for the field (the Operator). This asks the Operator to confirm the accuracy of
information relating to installations, pipelines and companies involved in the field.

3.4 Once the FIR has been returned, DECC will send the company that
operates the installation, the owners and the relevant licensees and JOA parties
a 'warning letter'. This communication warns the recipient that the Secretary of
State is considering issuing him a notice under section 29 of the 1998 Act and
provides him with the opportunity to make written representations if he
considers that he should not be given such a notice. The recipients are given up
to 30 days in which to make representations although this period may be shorter
for a fast track development. Following this, subject to any representations
received, a section 29 notice is issued to each of the parties.

3.5 Relevant licensees and JOA parties will be those that are entitled to
derive a financial or other benefit from the installation. The benefit must arise as
a result of using the installation for purposes for which it is, or will be,
established or maintained (see paragraph 3.23, multiple sub-area bullet point, for
further details).

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3.6 The serving of a notice for pipelines follows the same procedure as for
installations. In most cases, notices are issued only to the owners of a pipeline.
However, notices may also be served on parents or other associates where we
have concerns about the arrangements to ensure satisfactory decommissioning.
For pipelines, notice serving procedures are instigated when the pipeline works
authorisation is given and construction has commenced.

3.7 By this process the obligation to submit a decommissioning programme

on or before such date as the Secretary of State may subsequently specify, is
placed upon each of the appropriate companies. The notice also advises of the
requirement to carry out consultations with specific parties, including
fishermen's organisations and other interested bodies (see Annex H), when
preparing a programme. A list of the organisations to be consulted will be sent
to each of the notice holders nearer the time of decommissioning.

3.8 The time between serving an initial section 29 notice and the point at
which the Secretary of State calls for a decommissioning programme may be
considerable. We expect to call for a programme towards the end of the life of
the field and the facilities. However, in certain circumstances, for example the
early shut down of the field, the Secretary of State may call for the programme at
an earlier stage.

3.9 All section 29 notice holders, whether or not they have sold their interest
in a field, are treated equally in law and will be required to agree the
decommissioning programme. The obligation to carry out the approved
decommissioning programme is joint and several. This is an important concept
which means that if any one of those with a duty to carry out a programme is
unable to do so, the other interested parties will be responsible for the defaulting
partys burden. Ultimately, this could result in one party being liable for the full
decommissioning costs. As a consequence the Department would therefore
expect to be notified in the event of a company dissolution. In practice, the
Operator is expected to lead on the preparation and implementation of the
programme.

3.10 Once the decommissioning obligation has been fixed by means of the
section 29 notice, it remains so unless it is withdrawn by the Secretary of State.
If a company disposes of its interest in the installation(s) or pipeline(s) on a field,
the Secretary of State will consider whether to exercise his discretion under
section 31(5) to withdraw the notice (see Section 4 and Annex F for information
taken into account when considering withdrawal). The other companies who
have received notices for that installation or pipeline will be sent a letter advising
them of the proposed withdrawal and will be given up to 30 days in which to
make written representations although this period may be shorter to meet the
timescale of the deal.

3.11 If a notice is withdrawn this does not necessarily mean that the company
will have no decommissioning responsibilities in relation to the equipment. In
accordance with section 34 of the 1998 Act, a company may, in certain
circumstances and following the approval of a programme, be placed under a

11
duty to carry out that programme even though it has previously been released
from a notice under section 31(5). Section 34 also enables the Secretary of State
to do the same with any person on whom notices could have been served since
the serving of the first section 29 notice. This situation has not occurred to date
and we regard it as a measure of last resort. In the first instance, the Secretary
of State would expect the current section 29 notice holders to carry out the
decommissioning and would only use the powers in section 34 in potential
default cases which we endeavour to avoid by the use of prudent security
arrangements. If such action was necessary in respect of more than one
company we would aim to agree a fair and reasonable distribution of the
liabilities in discussion with the companies concerned. This might be related to
the revenues earned by the various companies during their involvement in the
field and DECC would want to consider the companies proposals for dealing
with the situation.

3.12 At the same time as the Secretary of State considers whether to

withdraw the notice from an exiting party, if the incoming company is not already
in receipt of a section 29 notice, DECC will instigate the notice serving process
outlined in paragraph 3.4. A warning letter will be sent to the new company,
which, subject to any representation, will be followed by a section 29 notice. At
this stage it is not necessary to precede the warning with a FIR as the relevant
information will be retained from the original FIR sent around the time of field
approval.

3.13 Where a section 29 notice is not withdrawn the notice holder would not
be liable for any new installations emplaced in the field after the assignment of
their interest. However they would be liable for any new equipment added to an
installation already covered by their existing notice.

3.14 If a company has concerns relating to a specific section 29 case they

should contact DECCs Offshore Decommissioning Unit for further clarification.

Manager of an Installation

3.15 The increasing use of contractors taking on the day-to-day management

of an installation has led to queries regarding whether or not the contractor
would receive a section 29 notice as the manager of the installation falling within
section 30(1)(a) of the 1998 Act. The wording of section 30(1)(a) indicates only
one person can manage the installation and our interpretation is that the
Operator approved by the Secretary of State under the Petroleum Act licence
would be the manager. We do not treat contractors providing a service to the
Operator as a manager within section 30(1) (a) of the Act. Companies are
welcome to ask if a particular contractual situation might create liabilities.

3.16 DECC has been asked if the Operator of the host installation would
become the manager of a tieback if the tieback Operator defaulted. It was clear
that the host platform Operator had no authority to make strategic managerial
decisions regarding the tieback field and no entitlement to the tiebacks
production. We consider that a benefit must arise from the exploitation or

12
exploration of mineral resources or storage or recovery of gas for which the
tieback installation is, or will be, established or maintained. This will not include
the host Operator if they are only receiving a tariff for transporting production
from the tieback via the host installation (see paragraph 3.23, multiple sub-area
bullet point, for further details). DECC took the view that the host Operator
would not be regarded as the manager of the tieback installation.

Definition of an Installation Tiebacks

3.17 The increasing use of tiebacks to host platforms raises the question
whether the tieback should be treated as a separate installation for the purposes
of Part IV of the 1998 Act. Where the tieback is separate, under the 1998 Act (as
amended by the 2008 Act), only licensees and JOA parties that benefit from the
oil or gas production from the field for which the tieback installation was built, or
is maintained, will be served with a notice under section 29 for that installation.
If the tieback is considered part of the host installation it is not possible to
separate the liability from the host.

3.18 Although a tieback depends on the host installation to transport (and

sometimes process) the production, we do not believe this automatically makes
the tieback part of the host installation. Many tiebacks could switch to another
host platform if it offered a better deal justifying building a new link. In addition,
very few installations on the UKCS are truly independent. Most share pipelines
to get their production ashore and many share processing, accommodation or
control facilities.

3.19 We consider the following parameters in determining when it is

reasonable and proportionate to treat tiebacks as separate installations:

1. Whether a tieback exploits a different field to that used by the host

installation.

2. Whether a tieback has a structure on the seabed or on a jacket which

comprises at least one wellhead producing oil or gas, probably a
protection structure and possibly a manifold connecting pipelines.

3. Whether a tieback is on a different licence to the field exploited by the

host installation.

4. Whether there are different licence groups for the tieback and host.

3.20 Whether the tieback will be treated separately will be determined on the
facts of the case and where it exploits a separate field and there is a new
structure on the seabed (parameters 1 and 2), it is anticipated it will be treated as
a separate installation. If these factors do not apply, there would need to be
another strong reason to justify regarding the tieback as separate. Where a
tieback is part of the host installation, it is for the companies concerned to decide
whether and how to apportion the costs of decommissioning as the legislation is
silent on this point.

13
3.21 An extended reach well is not considered to be a separate installation.
Although the field may be geologically separate from that exploited by the host,
the well is drilled from the host platform and is connected back to the host for
production; there is no separate seabed or surface facility to treat as an
installation.

Energy Act 2008 Amendments

3.22 Chapter 3 of Part 3 of the 2008 Act amends Part IV of the 1998 Act. The
relevant oil and gas provisions are detailed below.

Section 72: Persons who may be required to submit abandonment

programmes

3.23 This section of the 2008 Act makes amendments to section 30 of the
1998 Act to extend the range of persons who may be given a notice under
section 29, and who may therefore be required to submit a decommissioning
programme.

Licence Holders: Subsection (2)(a) inserts a new paragraph into section

30(1) of the 1998 Act. This extends the regime to include licensees who
have transferred an interest in a licence to another party without the prior
approval of the Secretary of State. Licences may not be transferred from
one company to another without DECCs consent. Unconsented
transfers are nevertheless effective. DECC is not aware of cases where
unconsented transfers have been made with fraudulent or criminal intent.
However, there have been a number of cases where unconsented
transfers appear to have happened because of carelessness by the
companies involved. For example, where DECC has consented to a
transfer to one subsidiary and then the transfer is altered so that the
transfer is actually made to a different subsidiary, without getting a
revised DECC consent.

Limited Liability Partnerships: Subsections (2)(b) and (3) amend

paragraphs (1)(e) and (2)(c) of section 30 of the 1998 Act to substitute
references to company with body corporate. In addition, subsection
(5) substitutes five new subsections for section 30(8) of the 1998 Act and
subsection (6) amends section 30(9) of the Act. These provisions set out
the test for determining whether, for the purpose of section 30, one
company is associated with another. The effect of the amendments and
the new subsections is to substitute references to company with
body corporate and to provide the test for whether one body corporate
is associated with another. The purpose of these provisions is to bring
limited liability partnerships within the scope of the association provisions
of section 30 and, therefore, treat them as persons which may be served
with a section 29 notice.

Timing of Notice Serving: Subsection (4) amends subsection (5)(b) of

section 30 of the 1998 Act. Subsection (5)(b) provides that a person who
may be required to submit a programme includes a person who is already

14
 carrying on certain activities (such as exploitation of mineral resources) on
an offshore installation. The amendment extends these provisions so that
they also apply to persons who intend to carry on such activities in the
future. This enables licensees and parties to joint operating or similar
agreements to be served with a notice at the same time as the person
who manages the installation e.g. before production begins.

Multiple Sub-Area/Multiblock Licences: Petroleum exploration and

extraction licences issued under either the 1998 Act or the Petroleum
(Production) Act 1934 tend to be divided by the licensees at a
commercial/contractual level into separate sub-areas. As a result, some
of the licensees may have no commercial interest in a particular sub-area,
and therefore no interest in an installation in that sub-area. Paragraphs (b)
and (c) of section 30(1) of the 1998 Act give the Secretary of State the
power to make all licensees and parties to joint operating or similar
agreements jointly and severally liable for decommissioning every
installation in the licensed area regardless of whether they benefit or have
the potential to benefit from the particular installation. Subsection (7)
inserts four new subsections into section 31 of the 1998 Act preventing
the Secretary of State from serving a decommissioning obligation on
licensees and parties to joint operating (or similar) agreements if they
have never been entitled to derive a relevant financial or other benefit
from the installation in question.

As a result of the new subsection (A1) of section 31, if a person has never
been entitled to derive any benefit, whether financial or other, from the
installation, the Secretary of State will no longer be able to serve a notice
under section 29 to that person if they fall within paragraphs (b) or (c) of
section 30(1) and have never been within paragraphs (a), (ba) see first bullet
point above, (d) or (e). Subsections (B1) and (C1) specify that a relevant
financial or other benefit will not arise as a result of using the installation for
purposes other than those for which it is, or is to be, established or
maintained. In addition by virtue of subsection (D1) of section 31, a person
that is within paragraph (e) of section 30(1) by virtue of his association to a
person exempted by the new provision will be similarly exempt.

Subsection (8) of section 72 of the Energy Act 2008 extends the above
provisions to section 34 of the 1998 Act. Section 34 specifies the persons
that may be given a duty to carry out an existing approved programme. As a
result of the new subsection it is not possible to propose that a licensee or a
party to a joint operating (or similar) agreement should be added as a party to
the programme if that person has never been entitled to derive any benefit
from the installation covered by the programme and has never been within
paragraphs (a), (ba) see first bullet point above, (d) or (e) of section 30(1).

The benefit referenced in the above paragraphs must arise from the
exploitation or exploration of mineral resources or storage or recovery of gas
from the field for which the installation was built or is maintained. The
intention is to capture benefits which are the substantive equivalent of an

15
 ownership or equity interest in the field and installation e.g. by receiving
production or payments, royalties or bonuses in lieu of production. By
contrast, a person would not be treated as benefitting from activities on an
installation simply by virtue of (a) either providing or receiving inter-field
services under a standard transportation, processing and operating
agreement (b) buying oil or gas production from the installation (c) trading
carbon dioxide allowances or (d) supplying goods or services to the
installation.

Section 73: Financial resources etc

3.24 This section of the 2008 Act clarifies the information which may be
required to satisfy the Secretary of State of a persons ability to fund its
decommissioning obligations, or potential obligations. It also makes provision to
bring forward the time when the Secretary of State may require a person to take
relevant action (such as providing financial security, for example a letter of
credit), in order to reduce the financial risk to the taxpayer.

Information Gathering, Prior to Serving Notice Under 29 or Imposing

Decommissioning Obligation: Subsection (2) substitutes three new
subsections for subsection (1) of section 38 of the 1998 Act. Section 38
sets out that the Secretary of State can, by issuing a notice, require
specified financial information and documents (for example up to date
management accounts) in relation to a decommissioning programme. It
also creates an offence for non-compliance with the notice and for
knowingly providing false information. The purpose of the amendments
is to widen the circumstances in which the Secretary of State may give
such a notice to determine whether he wishes to impose a
decommissioning obligation on a person by serving a notice under section
29 or by adding that person to an existing approved programme (and
making them subject to the obligations within that programme).

Information Gathering, After Serving Notice Under Section 29 or

Imposing Decommissioning Obligation: Subsections (3) and (4) make
amendments to subsection (2) of section 38 of the 1998 Act and insert a
new subsection (2A). This provision allows the Secretary of State to
require more specific information which could include: a detailed
estimate of the costs of decommissioning; predictions of future revenue;
the costs and benefits of any plans for further development; or up to date
management accounts.

Under the 1998 Act the provision for such information could not be
required prior to the approval of a programme. This amendment allows
such information to be required from persons who have been served with
a notice under section 29, in addition to those under a duty to carry out a
decommissioning programme. This enables the Secretary of State to
assess whether to require financial security.

16
 Require Action, Including Establishing Financial Security: Subsection
(5) substitutes new subsections (4) and (4A) for section 38(4) of the 1998
Act. These enable the Secretary of State, after consulting the Treasury, to
require action (including the provision of financial security, such as a letter
of credit) to be taken by a person who has been served with a notice
under section 29 or who has a duty to carry out a programme, where the
Secretary of State is not satisfied that the person is capable of carrying
out the programme. Previously the Secretary of State only had the ability
to require such action following the approval of a decommissioning
programme. By enabling the Secretary of State to require action once a
notice under section 29 has been served, but in advance of programme
approval, the taxpayer can be protected against the early failure of a
development. Prior to issuing a notice requiring the establishment of
security the recipient will be given the opportunity to make
representations regarding whether they should be given such a notice.
Annex F details the risk assessment process used to determine when
such mitigation measures may be necessary.

Offence to Disclose Information: Subsection (6) makes it an offence to

disclose information obtained under section 38(1) or (2) of the 1998 Act
without the consent of the person who provided it, unless the disclosure
is required for the purposes of the exercise of the Secretary of States
functions under the Act or another piece of legislation. Section 40 of the
1998 Act sets out the penalties that apply if an offence is committed
under subsection (6). This ensures the ongoing confidentiality of any cost
or financial data submitted.

Section 74: Protection of abandonment funds from creditors

3.25 This section inserts two new sections into the 1998 Act after
section 38, to protect funds set aside for the purposes of decommissioning in
the event of insolvency.

New section 38A: Protection of funds set aside for the purposes of
abandonment programme. This section is designed to ensure that, in
the event of the insolvency of a person responsible for a
decommissioning programme or a person with obligations under that
programme, the funds set aside for meeting those liabilities remain
available for decommissioning and are not available to the general body of
creditors. The protection in the event of insolvency applies where any
funds have been set aside in a secure way (such as a trust or other
arrangement which was established on or after 1 December 2007) for
meeting obligations under a programme. This provision applies whether
the security is established before or after the programmes approval, as
long as it is clear in the arrangement that it has been established to
secure the obligations under the programme.

Subsection (4) provides that the term security has a wider interpretation
for the purpose of funds which will be protected from creditors in the

17
 event of insolvency. The list, which is non-exhaustive, provides examples
of the interpretation of security. Without such a definition, a court could
take a more restricted legal view. This in turn could mean that an
instrument that was intended to be used to meet some or all of the
decommissioning costs could be accessed by creditors in the event of the
operators insolvency.

To enable protection of the funds, subsection (6) specifically disapplies

any provision of the Insolvency Act 1986, the Insolvency (Northern
Ireland) Order 1989 or any other enactment or rule of law the operation of
which would prevent or restrict the security being used for the purpose
for which it was set up (meeting decommissioning liabilities). Subsection
7 extends the meaning of enactment to include Acts of the Scottish
Parliament.

New section 38B: Directions to provide information about protected

assets. This section is intended to ensure that creditors and potential
future creditors of a person responsible for a decommissioning
programme are aware of any decommissioning funds affected by the new
powers to disapply insolvency legislation. The publication of information
regarding relevant security arrangements will enable informed decisions
to be made by creditors and potential future creditors. Subsections (1)
and (2) therefore set out that the Secretary of State may give a direction
to a person responsible for a programme to publish details of the fund or
other arrangements at the time and in the manner specified by the
Secretary of State (for example in the financial pages of that persons
website). Subsection (3) enables the Secretary of State or a creditor of
the person responsible for the decommissioning programme to apply for
a court order to ensure compliance with a direction.

Section 107 and Schedule 5: Minor and consequential amendments

3.26 Paragraphs 9 and 10(b) of Schedule 5 amend section 31(1) and section
34(3) of the 1998 Act. Subsection (1) of section 31 provides that the Secretary of
State may not give notice under section 29 to certain persons specified in
section 30(1) if the Secretary of State has been and continues to be satisfied that
adequate arrangements (including financial) have been made by other persons so
specified. Similarly, section 34(3) provides that the Secretary of State shall not
propose that certain persons specified in section 30(1) shall be given a duty to
secure that an approved programme is carried out unless it appears to him that
one of the current parties has or may default. The effect of the new provisions is
to provide that these limitations will no longer apply to persons specified in
paragraph (d) of section 30(1) (a person who owns any interest in an installation
otherwise than as security for a loan). There is increasing use of floating
production systems where the ownership may change during the life of the field,
and this amendment takes account of this change in practice, and enables the
decommissioning risk to be spread to new owners with an interest in an
installation.

18
3.27 Paragraph 10(a) of Schedule 5 extends the class of persons that can be
given a duty to carry out an approved programme to include licensees who have
transferred an interest in the licence to another party without the prior approval
of the Secretary of State. This is in line with section 72 subsection (2)(a) outlined
above.

3.28 Paragraph 11 of Schedule 5 inserts text into section 45 of the 1998 Act
(Interpretation of Part IV) so that the definition of submarine pipeline includes a
pipeline which is intended to be established. This enables notices under section
29 to be served for submarine pipelines prior to installation, mirroring the existing
requirements for offshore installations.

19
4. CHANGES OF OWNERSHIP AND FINANCIAL SECURITY
AGREEMENTS

4.1 In recent years there has been a significant and increasing number of
UKCS licence assignments from large companies to smaller ones. The
introduction of innovative Licensing schemes such as Frontier and especially
Promote licences has brought a number of new companies to the UKCS.
Ministers have agreed that such activity on the UKCS should be encouraged and
that there should be a free trade in mature offshore oil and gas assets so as to
extend field life and maximise economic recovery. At the same time the
Government has a duty to ensure that the taxpayer is not exposed to an
unacceptable risk of default in meeting the costs associated with
decommissioning. To enable these two goals to be achieved, the Government
has developed a policy to ensure that adequate security for decommissioning
costs is maintained on a field by field basis. The details of this policy, including
the circumstances in which decommissioning security may be appropriate, are
set out in Annexes F and G.

20
5. PLANNING FOR DECOMMISSIONING

The Decommissioning Programme Process

5.1 The consideration and approval of decommissioning programmes for

installations and pipelines will be co-ordinated by DECCs Offshore
Decommissioning Unit in Aberdeen. The Unit will consult with the other
Government Departments, Devolved Administrations and Agencies who have an
interest in the consideration of decommissioning proposals. There may,
however, be occasions when DECC will ask the Operator to make direct contact
with a particular Government Department, for example, with the Department for
Environment, Food and Rural Affairs or its agency, the Centre for Environment,
Fisheries and Aquaculture Science on an aspect which may have specific
implications for fisheries.

5.2 It is clear that our international obligations will result in the great majority
of installations being returned to shore for re-use or recycling or final disposal on
land. However, experience to date has shown that the circumstances
surrounding individual cases will vary. For example, it may be appropriate for
topsides or jackets to be re-used offshore without being returned to land; in such
a case, proper consideration would need to be given to cleaning and to any
waste which may arise. The technical, environmental, safety and economic
issues will need to be considered carefully in each instance. The whole process
leading to approval of a decommissioning programme is intended to be flexible,
transparent and subject to public consultation.

5.3 The process involved in a typical case where the installation is being
completely removed for re-use or recycling or final disposal on land can be
illustrated as follows:

Decommissioning Programme Process - Main Stages

Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

Preliminary Detailed discussions and Formal Commence Monitoring of
discussions submission of consultation submission of a main works and site
with DECC draft programme to DECC, programme and undertake site
other interested parties approval under surveys
and the public for the Petroleum
consideration Act

5.4 Consideration of those cases involving concrete installations or large steel

installations with a jacket weight greater than 10,000 tonnes will follow a similar
process. However, in these cases it is expected that it will be necessary to
undertake more extensive public consultations on the proposals. Operators will
wish to discuss the details and the timing of such a dialogue with DECC but
there is likely to be benefit in initiating the process at an early stage, certainly at
Stage 1 and possibly earlier. If discussion at Stage 1 suggests there is a case for
seeking a derogation from the general rule of OSPAR Decision 98/3, a detailed
assessment in accordance with the procedures set out in the Decision will have

21
to be carried out at Stage 2. In deciding whether a case has been made out for
a derogation DECC will judge the assessment against the criteria set out in
Annex A.

5.5 Consultations with the OSPAR Contracting Parties would be initiated by

the Government at Stage 2. The more extensive consultations referred to above
are likely to continue throughout Stages 1 and 2.

5.6 A flowchart setting out how the consideration of decommissioning

proposals will operate in practice is at Annex J.

Stage 1

5.7 Early discussions between the Operator and DECCs Offshore

Decommissioning Unit will ensure that timely action is being taken by the
Operator and that the decommissioning process is well understood. The
Offshore Decommissioning Unit will involve other Government Departments as
necessary.

5.8 Discussions should commence well ahead of forecast cessation of

operations. In the case of a large field with multiple facilities, this may be 3 years
or more in advance. In the case of a potential derogation case it may be up to 5
years in advance. The onus rests with the Operator to initiate these discussions.
At the same time the Offshore Decommissioning Unit will endeavour to maintain
a more general dialogue with operators on their future UKCS plans in order to
understand the likely timing of cessation of production from their fields and the
implications for decommissioning of the infrastructure.

5.9 The Offshore Decommissioning Unit will advise of any particular factors or
requirements that need to be taken into account in the light of circumstances
existing at that time. Where appropriate DECC will encourage operators to co-
operate with the view to a joint and integrated approach. DECC will also
promote the sharing of technical information and experiences amongst operators
(see Section 17).

5.10 The Operator will be asked to outline the likely timetable of future events
to form a basis for agreement on when more detailed discussions should
commence and what documentation should be prepared in advance.

Stage 2

5.11 This stage involves more detailed discussion of an Operator's

decommissioning proposals and the consideration by Government and other
interested parties of a consultation draft of the decommissioning programme.

5.12 With the more straightforward cases there may be little distinction in
practice between Stages 1 and 2 with the need for only one or two meetings
before the consultation programme can be submitted for Government

22
consideration. Drafting and consideration of those cases involving concrete
installations or large steel installations with a jacket weight greater than 10,000
tonnes may be more complex. If an Operator seeks a derogation from the
general rule of re-use, recycling or final disposal on land, the application will have
to be considered in accordance with the assessment procedures set out in
Annex 2 to OSPAR Decision 98/3.

5.13 Transparency and openness is an important aspect of any

decommissioning decision. At the same time as submitting the programme for
Government consideration, the Operator will be required to carry out
consultations with interested parties. The extent of these consultations will be
determined by the particular circumstances of the case. In all cases the Operator
will be asked to undertake statutory consultations as provided for under section
29(3) of the Petroleum Act 1998. The consultation process is described more
fully in Section 6 of this guidance. If consultations with other OSPAR Contracting
Parties are necessary the process will be initiated at this stage by Government in
accordance with the procedures set out in Annex 3 to OSPAR Decision 98/3.

Stage 3

5.14 Following the completion of consultations it should be possible for the

Operator and the Offshore Decommissioning Unit to agree a final version of the
programme. When this has been achieved the Secretary of State will call
formally for submission of the programme under the 1998 Act.

Stage 4

5.15 This stage covers the implementation of the approved decommissioning

programme up to the completion of site surveys. The programme will specify
the arrangements by which DECC will be kept informed of progress and, where
appropriate, will indicate the 'milestones' at which progress will be reviewed.
Any revisions to the programme will be subject to the Secretary of State's
approval in accordance with the provisions of section 34 of the 1998 Act.

5.16 At the conclusion of Stage 4 the Operator will be required to satisfy DECC
that the approved programme has been implemented. This will normally involve
the submission of a Close-out Report within four months of the completion of
offshore work, including debris clearance and post-decommissioning surveys.
(See Section 13 for further details).

Stage 5

5.17 The final stage will require the Operator to implement arrangements for
monitoring, maintenance and management of the decommissioned site and any
remains of installations or pipelines that may exist. The scope and duration of
the monitoring requirements will be agreed between the Operator and DECC in
consultation with other Government Departments and details will be included in
the decommissioning programme. (See also Sections 14 to 16 of this guidance).

23
Deferral and Phased Decommissioning

5.18 The Government aims to ensure the orderly decommissioning of offshore

infrastructure in a timely and efficient manner, in line with the UKs international
obligations and domestic legislation. DECCs expectation is that the removal of
redundant installations, including subsea equipment, will be carried out as soon
as reasonably practicable. At the same time we recognise that disused facilities
including pipelines may represent important UKCS infrastructure and provide the
means for the further development of hydrocarbon reserves, the storage of
carbon dioxide or hydrocarbon gas. Where a specific opportunity has been
identified deferral of decommissioning can be considered. The timing of
decommissioning will also be influenced by market factors and vessel availability
and there may be benefits from coordinating offshore work with other projects
being undertaken in a similar timescale. This may involve agreeing that
decommissioning work can be conducted during a window of opportunity,
possibly spread across two or three seasons. In general, though, in view of the
UKs obligations under OSPAR, DECC expects the removal of disused
installations not to be delayed unless a robust case demonstrates there is a
specific reuse opportunity or other justifiable reasons for deferring
decommissioning.

5.19 If it is proposed that final decommissioning of an installation be deferred

to a later date, DECC should be consulted well in advance and a sustainable case
will need to be made. In most instances it should be possible to agree the
deferral by an exchange of correspondence. If it is agreed that decommissioning
may be delayed until a more appropriate time, DECC will issue a formal letter
setting out the conditions upon which it is prepared to defer, until a specified
date, the issue of a direction to submit a decommissioning programme.

5.20 However, in most cases it is expected that a decommissioning

programme will be required at the outset, particularly if the proposal relates to
the phased decommissioning of an installation or of a number of installations in a
field which may involve the removal of topsides and other equipment in advance
of the jacket. Such phasing may be appropriate in order to take advantage of
possible savings through synergy and advances in new technology (see
Section17). In these circumstances a programme would need to address the
overall strategy for decommissioning the installation or installations, although it
may be accepted that an Operator should seek agreement initially for the first
activity only, e.g. removal of topsides.

5.21 Amongst the factors to be taken into account in considering the case for
deferral or phasing and the extent of any prior works will be the condition of the
installation, the presence of any hazards including potentially polluting
substances and the need for accurate information about the nature and location
of any such substances. DECC and HSE will wish to be satisfied that the
integrity of the installation will be maintained or that any deterioration will not be
such as to present unacceptable risks before or compromise the execution of
decommissioning operations.

24
5.22 The Operator will need to make arrangements to ensure installations
which are to be left in place are suitably marked and lit (see Section 15).

5.23 In the case of pipelines, DECC should be consulted in the same way as
for installations (see Section 10).

Median Line Facilities

5.24 Treaties relating to median line fields contain provisions requiring

consultation between the relevant Governments on decommissioning proposals.
DECC will take the lead in these discussions and will consult the Operator. If
facilities are located on both sides of the median line it is likely that
decommissioning proposals will be developed through joint discussions with the
relevant Governments, leading to the submission of a single programme for
approval by both Governments under their respective legislative regimes.

Role of Other Government Departments

5.25 As already indicated, consultation with Government Departments and the

Devolved Administrations at an early stage in the decommissioning process will
be essential. DECC will act as the focal point for discussions with operators but
other Government Departments, Devolved Administrations and Agencies will be
fully involved in the process and will represent their own particular interests as
appropriate at these discussions. As part of this process it may be necessary in
some cases for operators to enter into a separate dialogue with other
Departments if specific matters relating to their areas of responsibility arise. The
outcome of any separate discussions will be fed back into the overall
assessment of the decommissioning proposals.

5.26 It will also be the Operators responsibility to obtain as appropriate, or

ensure the existence of, any necessary consents or authorisations arising from
legislation administered by other parts of DECC, other Government
Departments, Devolved Administrations or Agencies. Statutory consultation may
be an essential part of the authorisation processes and applications should be
made in good time. Further details of the role and responsibilities of other
Departments are set out in Annex E; see also Section 6 of this guidance and
Annex D.

25
6. DECOMMISSIONING PROGRAMMES

Content (see also Annex C)

6.1 In most cases the general rule under OSPAR Decision 98/3 will apply and
the decommissioning programme will provide for full removal for re-use,
recycling or final disposal of the installation on land. In preparing the
decommissioning programme in these cases there will be no need for a detailed
comparative assessment of the options nor will there be a need for the
Government to consult the OSPAR Contracting Parties. It will, however, be
important to make the draft programme available for public comment and to
include in the programme a statement indicating how the principles of the waste
hierarchy will be met and to show the extent to which the installation, including
the topsides and the materials contained within the installation, will be re-used,
recycled or disposed of on land.

6.2 The waste hierarchy is a conceptual framework which ranks the options
for dealing with waste in terms of their sustainability, beginning with reducing
the generation of waste. Failing that, re-use either for the same or a different
purpose should be considered ahead of recovering value from the waste through
recycling. Only if none of these offers an acceptable solution should disposal be
considered. The Government reiterates its support for the waste hierarchy in the
national waste strategies for Scotland, England and Wales, published by the
Scottish Environment Protection Agency (http://www.sepa.org.uk/) and the
Department of Environment, Food and Rural Affairs (http://www.defra.gov.uk/).

6.3 The OSPAR Decision recognises that, in line with the waste hierarchy, the
re-use of an installation is first in the order of preferred decommissioning
options. DECC is keen to encourage the re-use of facilities wherever this is
practical and will expect the decommissioning programme to demonstrate that
the potential for re-use has been examined fully.

6.4 It will be essential to support the chosen decommissioning option with an

Environmental Impact Assessment. This should form part of the
decommissioning programme and should assess the impact of the project on the
environment and climate change, which is of increasing importance in the
decision making process. This should include information on the energy balance
and emissions of the options considered. It should also include the impacts of
any explosives likely to be deployed subsea during decommissioning activity. It
should also take account of requirements under the EU Habitats Directive. (See
Annex C, Item 10).

6.5 In the more complex cases relating to concrete installations and to steel
installations with a jacket weight greater than 10,000 tonnes a full assessment of
the options in accordance with Annex 2 to OSPAR Decision 98/3 must be
undertaken by the Operator so that DECC may judge whether there is a case for
seeking a derogation from the general rule of the Decision. The assessment will
include the practical availability and potential impacts of alternative options in
order to allow an authoritative comparative evaluation to be carried out. The
assessment will form part of the decommissioning programme. The approach to

26
this assessment and an indication of the criteria that may be applied is set out in
Annex A to these guidance notes.

6.6 A decommissioning programme should identify all items of equipment

and materials that have been installed (e.g. installations, subsea equipment,
wells, pipelines) or have accumulated (e.g. drill cuttings) at the site. In addition,
with the exception of items left downhole, the programme should clearly specify
any equipment or remains to be decommissioned in place.

6.7 A programme may deal with the decommissioning of all of the facilities
located on a field or part of the facilities including a single installation or pipeline.
The precise content of a programme may vary according to the circumstances.
However, the following sections are likely to be necessary in most cases.
Details of the information to be provided under each section are set out in Annex
C.

1. Introduction
2. Executive Summary
3. Background information
4. Description of Items to be decommissioned
5. Inventory of materials
6. Removal and disposal options
7. Selected removal and disposal option
8. Wells
9. Drill Cuttings
10. Environmental Impact Assessment
11. Interested party consultations
12. Costs
13. Schedule
14. Project management and verification
15. Debris clearance
16. Pre- and Post-decommissioning monitoring and maintenance
17. Supporting studies

6.8 If the above format is not appropriate in any particular case a modified
version should be agreed in discussion with DECC.

6.9 Where particular items of equipment or facilities on a field are to be

decommissioned together but are the subject of different sets of section 29
notices (i.e. the groups of notice holders for the facilities are not all composed of
the same companies), it is important that it is possible to distinguish clearly from
the decommissioning programme with whom the decommissioning obligations
rest and what those obligations are. The effect of the Petroleum Act 1998 is to
require there to be a decommissioning programme in respect of each set of
equipment which is the subject of a section 29 notice or series of related section
29 notices. This means that, although it may be possible to present different
programmes within a single document, it must be done in such a way as to allow
the different programmes to be identified in order to isolate the liabilities of the
different groups of notice holders.

27
6.10 Decommissioning proposals for pipelines should be prepared in a
separate programme although, as indicated above, this may be presented within
the overall decommissioning document. Section 10 outlines the general
approach to pipeline decommissioning and Annex C explains how to structure
combined decommissioning documents.

6.11 Draft Decommissioning Programmes must include a statement about

costs. However, we realise that accurate cost data and confirmation of the final
decommissioning option may be dependent on the outcome of a commercial
tendering process. Operators should discuss any sensitivities with DECC.

Submission

6.12 At a mutually agreed time, following preliminary discussions, the Operator

should submit to DECC 26 copies of a consultation draft of the decommissioning
programme. Exact requirements will be discussed with the Operator before
submission. Copies of the draft programme will be distributed by DECC to other
Government Departments and Agencies. Submission in CD ROM form is the
preferred method, although some paper copies will also be required. Six copies
will be required when the holders of section 29 notices are directed formally to
submit the decommissioning programme.

6.13 The documents should be marked for the attention of the Head of the
Offshore Decommissioning Unit and addressed to:

The Department of Energy and Climate Change

Atholl House
8688 Guild Street
ABERDEEN AB11 6AR

6.14 On receipt of a draft decommissioning programme the Offshore

Decommissioning Unit will circulate it for consideration by others with an interest
within DECC and to other Government Departments. The latter will comprise:
The Scottish Government (both the Environmental Quality Directorate and
Marine Scotland); the Department of Environment, Food and Rural Affairs; the
Ministry of Defence including the UK Hydrographic Office and HM Revenue &
Customs. The Health and Safety Executive; the Crown Estate and the Joint
Nature Conservation Committee (or the appropriate Conservation Committee)
will also receive a copy of all programmes. The Scottish Environment Protection
Agency will receive a copy if the facilities are in waters adjacent to Scotland; the
Environment Agency if in waters adjacent to England or Wales and the
Department of the Environment for Northern Ireland if in waters adjacent to
Northern Ireland. The roles of these other Government Departments and
Agencies are set out in Annex E. Draft programmes are also circulated to
Historic Scotland and the Royal Commission on the Ancient and Historical
Monuments of Scotland (RCAHMS). Section 19 explains the role of these
bodies.

6.15 At the same time DECC will agree with the Operator a timetable for
considering the draft programme and submitting it for approval by the Secretary

28
of State. DECC will use its best endeavours to complete the consideration of the
draft decommissioning programme within 10 weeks.

6.16 In that period DECCs Offshore Decommissioning Unit will co-ordinate all
Government comments on the draft and submit a written response to the
Operator. Further meetings may be necessary at this stage to discuss whether
additional information and amendments to the draft programme may be
necessary.

6.17 At the same time as submitting the draft decommissioning programme to

DECC the Operator should also release it to the statutory consultees and
announce the proposals in the Press and on the Internet.

6.18 The outcome of the consultation process should be reviewed with DECC
and details included in the final version of the programme submitted for the
Secretary of State's approval.

6.19 Where appropriate, consideration of the draft decommissioning

programme will run in parallel with:

consideration by DECC Licensing and Consent Unit Field Teams of

any Cessation of Production (COP) Document (the procedures for
submitting an application for COP are set out in DECCs Guidance
Notes on Procedures for Regulating Offshore Oil and Gas Field
Developments which can be viewed on DECCs Oil & Gas Website at
https://www.og.decc.gov.uk/regulation/guidance/index.htm

consideration by the HSE of the Dismantlement Safety Case

consideration of any environmental permits or consents, and

any onshore disposal consents or licences which may be necessary,

including any transfrontier shipment of waste issues.

6.20 It is important that sufficient time is allowed for the proper consideration
of the proposals in a decommissioning programme. In the majority of cases only
one draft of the decommissioning programme will be necessary. However, in
those cases involving installations that are candidates for derogation under
OSPAR Decision 98/3 it is likely that more than one draft will be required.

Derogation cases

6.21 For derogation cases, DECC will still aim to comment on the consultation
draft of the decommissioning programme within 10 weeks. However, given the
complexities of a derogation case this process may take longer to complete. At
the same time as submitting the draft to DECC the Operator should commence
statutory consultations and announce the proposals in the Press and on the
Internet. The outcome of these consultations should be reviewed with DECC
and details included in a post consultation draft of the decommissioning

29
programme along with any comments received from DECC in response to the
Government consideration of the draft.

6.22 Having received the updated draft of the decommissioning programme

DECC should be satisfied that there are sufficient grounds to initiate
consultations with other OSPAR Contracting Parties on the intention to issue a
permit allowing derogation from the terms of OSPAR Decision 98/3 (see
paragraph 6.27).

6.23 When submitting the decommissioning programme for approval, the

outcome of the OSPAR process should be reflected in the document.

Consultations

6.24 At the point at which the draft decommissioning programme is submitted

to DECC, the Operator should commence statutory consultations as required
under section 29(3) of the Petroleum Act 1998. These consultations will be with
the representatives of those parties who may be affected by the
decommissioning proposals, such as the fishing industry. Details of the statutory
consultees will be specified in a letter to all companies in receipt of a notice
under section 29 of the Act. A list of the parties normally included is at Annex H.
The Statutory Consultees should normally be given 30 days in which to
comment.

6.25 The Operator will also be asked to announce its proposals by placing a
public notice in appropriate national and local newspapers and journals and to
place details on the Internet. This notice should indicate where copies of the
draft decommissioning programme can be viewed and to whom representations
should be submitted. A standard form of notice including appropriate
publications can be provided by DECC. Hard copies of the draft programme
should be made available for inspection at the Operator's offices and a copy can
be placed on the Internet. At the same time DECC will indicate on its website
that the programme has been issued for consultation.

6.26 The results of consultations should be reported in the decommissioning

programme when it is submitted for approval. This can be best achieved by
appending to the programme the correspondence with interested parties and by
indicating the extent to which their views have been taken into account.

6.27 In the more complex cases which require assessment in accordance with
the procedures set out in OSPAR Decision 98/3, operators will need to develop
and manage a wide-ranging public consultation process. The form and timing of
this process should be discussed with DECC. As a guide, such a process may
take up to 12 months and should commence at an early stage. Oil & Gas UK has
developed Guidelines on Stakeholder Engagement for Decommissioning
Activities. These can be viewed at http://www.oilandgasuk.co.uk/

6.28 If these Stakeholder consultations lead to a decision to seek a derogation

under the OSPAR Decision it will be necessary for DECC to consult the other

30
OSPAR Contracting Parties. Annex 3 to the Decision sets out the required
consultation process that may take up to 8 months to complete.

6.29 DECC will be responsible for submitting the case for derogation to the
OSPAR Secretariat but the Operator will be asked to prepare a document that
supports this case. The contents of this derogation document should be
discussed with DECC. It should be based on the draft decommissioning
programme but should only contain those factors that are relevant to the
derogation case. Preparation of the derogation document would normally
commence at the time of submission of the post statutory consultation draft of
the decommissioning programme. Sufficient copies will be required for
distribution to all of the OSPAR Contracting Parties.

Approval

6.30 At the appropriate time, normally when the draft decommissioning

programme has been finalised, the Secretary of State will formally direct, in
writing, the holders of section 29 notices, in respect of the installations and/or
pipelines, to submit a decommissioning programme for his approval. In
response to the direction, the Operator, on behalf of the notice holders, should
submit six copies of the decommissioning programme based on the agreed
draft. The decommissioning programme should include a letter from each
current equity holder with a section 29 notice signifying that it is being submitted
by the Operator on their behalf. A letter of support will not be required from a
non equity holder who has sold their interest but retains a section 29 notice.
Each of the notice holders will be informed by written notice when the Secretary
of State has approved the programme. If the approval is to be subject to specific
conditions, the notice holders will be given the opportunity to make
representations. A link to the approved programme will be included on DECCs
website.

Reporting Progress

6.31 There should be a commitment within the programme for the Operator to
keep DECC informed of progress during the decommissioning activities and
submit a Close-out report within four months of the completion of offshore work,
including debris clearance and post-decommissioning surveys. The report should
outline how the decommissioning programme was carried out. Details of the
information to be provided in the report are set out in Section 13.

6.32 The progress of a decommissioning programme from submission of the

draft through to approval will be indicated on DECCs Oil & Gas website
http://www.og.decc.gov.uk/upstream/decommissioning/programmes/index.htm.

Changes to Approved Programmes

6.33 When a decommissioning programme has been approved it is the duty of

each of the persons who submitted it to secure that it is carried out and that any
conditions to which the approval is subject are complied with. Those who
submitted the programme may, if they wish, propose alterations to it. If changes

31
are contemplated, the Operator, on behalf of the persons who submitted the
programme, should discuss them with DECC. Section 34 of the 1998 Act sets
out the provisions that apply to the revision of an approved decommissioning
programme.

32
7. THE IMPACT OF OSPAR DECISION 98/3

General

7.1 The purpose of this chapter is to provide guidance on the

decommissioning requirements which apply, in accordance with the
requirements of the OSPAR Decision 98/3, to the various types of installation
located on the UKCS.

7.2 Under the OSPAR Decision, which has been accepted by the UK
Government, the disposal at sea and the leaving wholly or partly in place of
disused offshore installations is prohibited. There is a presumption in favour of
re-use, recycling or final disposal on land.

7.3 The Decision recognises that there may be difficulty in removing the
'footings' of large steel jackets weighing more than 10,000 tonnes and in
removing concrete installations. As a result there are exceptions from the
general rule for these categories of installation. However, it should be noted that
any steel installation emplaced after 9 February 1999, the date on which the
Decision entered into force, must be completely removed for re-use or recycling
or final disposal on land.

7.4 The following table indicates the options which may be considered for
various categories of offshore installations located on the UKCS:

Installation Weight Complete Partial Leave

(excluding (tonnes) Removal Removal wholly in Re-use Disposal
topsides) to land to land place at Sea
Fixed Steel <10,000 Yes No No Yes (3) No
Fixed Steel >10,000 Yes Yes (1)(2) No Yes(3) No
Concrete -
gravity Any Yes Yes(2) Yes Yes Yes(4)
Floating Any Yes No No Yes No
Subsea Any Yes No No Yes No

Notes:

(1) Only the 'footings' or part of the 'footings' may be left in place.

(2) Minimum water clearance of 55 metres required above any

partially removed installation which does not project above the
surface of the sea.

(3) The placement of materials on the seabed for a purpose other than
that for which it was originally intended is covered by the OSPAR
Guidelines on Artificial Reefs in relation to Living Marine Resources
of June 1999 (OSPAR Reference: Agreement 1999-13. Available
from the OSPAR website at www.ospar.org).

(4) Although the disposal of the substructure of a concrete installation

at a deep-water site is an option this must be considered against

33
 the UK Government announcements at the time of the Decision
when Ministers stated that there would be no toppling and no local
or remote dumping of offshore installations.

7.5 In addition, the OSPAR Decision recognises that in very exceptional and
unforeseen circumstances resulting from structural damage or deterioration or
equivalent difficulties there may be a case for any offshore installation to be
dumped or left wholly or partly in place.

7.6 The following provides further guidance:

Topsides

7.7 The topsides of all installations must be returned to shore for re-use or
recycling or final disposal on land. Under the Decision topsides are defined as
those parts of an entire offshore installation which are not part of the
substructure and includes modular support frames and decks where their
removal would not endanger the structural stability of the substructure.

Steel Installations weighing less than 10,000 tonnes (excluding topsides)

7.8 All steel installations weighing less than 10,000 tonnes must be
completely removed for re-use or recycling or final disposal on land. The
Decision defines a steel installation as being a disused offshore installation which
is constructed wholly or mainly of steel.

7.9 Any piles should be severed below the natural seabed level at such a
depth to ensure that any remains are unlikely to become uncovered. The depth
will in the main depend upon the prevailing seabed conditions and currents.

Steel Installations weighing more than 10,000 tonnes (excluding topsides)

7.10 There is a presumption that steel installations weighing more than 10,000
tonnes should be totally removed and this is the starting point for the
consideration of any decommissioning proposals. However, it is possible to
consider whether it is appropriate for the 'footings' or part of the 'footings' of the
installation to be left in place. The upper section of the jacket above the
'footings' or any removed part of the 'footings' must either be re-used, recycled
or disposed of on land. Any removed parts may not be disposed of at sea.

7.11 The Decision defines the 'footings' as those parts of a steel installation
which are below the highest point of the piles which connect the installation to
the sea bed or, in the case of an installation constructed without piling, form the
foundation of the installation and contain amounts of cement grouting similar to
those found in piled installations. The definition also includes those parts of a
steel installation which are so closely connected to the 'footings' as to present
major engineering problems in severing them. In some situations this will allow
subsea templates which are located within the area of the footings and made
inaccessible by the footings to be included in this definition.

34
7.12 If the owners of the installation wish the Government to consider seeking
a derogation (paragraph 3 of the Decision) from the general rule of total removal,
it will be necessary for the Operator of the installation to demonstrate that there
are significant reasons why leaving the 'footings' or part of the 'footings' in place
is preferable to returning them to shore for re-use or recycling or final disposal on
land. To achieve this, an assessment must be carried out by the Operator in
accordance with Annex 2 to the Decision. Such an assessment will not need to
cover options which are not available in this case (e.g. deep-sea disposal or
toppling). This assessment may be judged against the criteria and approach set
out in Annex A to this guidance. If the Government is satisfied that a case has
been made it will undertake consultations with the other OSPAR Contracting
Parties through the OSPAR Secretariat in accordance with Annex 3 to the
Decision.

Gravity Based Concrete Installations

7.13 Decision 98/3 recognises that the decommissioning of concrete

installations is likely to present particular problems. For the purposes of the
Decision a concrete installation is defined as being a disused offshore installation
constructed wholly or mainly of concrete.

7.14 As with all other installations the topsides of concrete installations must
be returned to shore for re-use, recycling or disposal. However, it is possible to
consider whether the remainder of the installation, or part of it, should remain in
place or be disposed of at a deep-water licensed site. If the owners of a
concrete installation wish the Government to consider a derogation from the
general rule of total removal to land, the Operator must undertake an
assessment in accordance with Annex 2 to the Decision. The assessment must
show that there are significant reasons why sea disposal or leaving the
installation in place is preferable to re-use or recycling or final disposal on land.
This assessment may be judged against the criteria and approach set out in
Annex A to this guidance. If the Government is satisfied that a case has been
made it will carry out consultation with the other OSPAR Contracting Parties in
accordance with Annex 3 to the Decision.

Hybrid Installations

7.15 Since the introduction of Decision 98/3 a number of new development

proposals have considered the use of hybrid installations, combining both
concrete and steel in their construction. A typical hybrid installation may have a
concrete gravity base storage tank with a fixed steel structure located above.

7.16 For the purposes of the OSPAR Decision and the requirements of the
Petroleum Act 1998 such installations will be classified as being either steel or
concrete on the basis of the definitions set out in the Decision, i.e. that it is
either, constructed wholly or mainly of steel or it is constructed wholly or mainly
of concrete. This is not simply a matter of weight and account will be taken of
the purposes for which the different parts of the structure will be used.

35
7.17 If such an installation is classified as concrete then account will have to be
taken of the Ministerial Sintra statement which accompanied the Decision and
made clear that new concrete installations would be used only when it is strictly
necessary for safety or technical reasons. In such circumstances a case
justifying the use of concrete would have to be made as part of the Field
Development Plan (FDP) approval process and would need to demonstrate that
the installation can be removed for re-use, recycling or final disposal on land at
the time of decommissioning. This is in accordance with the IMO requirement
that any installation emplaced on or after 1 January 1998 must be designed and
constructed so that entire removal would be feasible (see Section 8).

Floating Installations

7.18 Floating installations will include Floating Production Facilities (FPFs) or

Floating Production Systems (FPSs), Floating Production, Storage and Off-take
vessels (FPSOs), Floating Storage Units (FSUs), and Single Buoy Mooring
facilities (SBMs). At the end of field life such installations will be floated off
location and re-use elsewhere as a production or storage facility is likely to be a
high priority. In those cases where re-use does not prove possible it will be
necessary to return the facility to shore for storage or dismantling in line with the
hierarchy of waste disposal options.

7.19 It is recognised that there may be a requirement to remove floating

production facilities from a field in advance of the approval of a decommissioning
programme. In these circumstances removal of the facility can be agreed
through an exchange of correspondence between the Operator and DECC.
Details of the removal would be included retrospectively in the decommissioning
programme. Further guidance can be provided by DECC.

7.20 Most floating installations will have associated sub-sea equipment. The
approach to decommissioning sub-sea installations is dealt with in the following
paragraphs.

Sub-sea Installations

7.21 Sub-sea installations are not separately identified in the Decision but fall
within the definition of a steel installation or a concrete installation. Sub-sea
installations include drilling templates, production manifolds, well heads,
protective structures, anchor blocks and anchor points, anchor chains, risers and
riser bases. Subject to paragraph 7.22 below, such installations must be
completely removed for re-use or recycling or final disposal on land. Any piles
should be cut below natural seabed level at such a depth to ensure that any
remains are unlikely to become uncovered. The depth will in the main depend
upon the prevailing seabed conditions and currents. However, any application to
leave in place a sub-sea installation because of the difficulty of removing it would
need to be made in terms of satisfying the requirements of paragraph 3(c)
(exceptional and unforeseen circumstances) of the Decision.

7.22 The exception to the general rule above relates to any part of an offshore
installation which is located below the surface of the sea-bed or any concrete

36
anchor-base associated with a floating installation which does not, and is not
likely to, result in interference with other legitimate uses of the sea. These are
not included in the definition of a disused steel or concrete installation in the
Decision and as such may be left in place. However, any concrete anchor-base
which results, or is likely to result, in interference with other legitimate uses of
the sea can remain in place as a derogation from the main rule only if an
assessment under Annex 2 to the Decision, and consultation in accordance with
Annex 3, show that to be preferable to re-use or recycling or final disposal on
land.

Exceptional Circumstances

7.23 In exceptional and unforeseen circumstances any disused offshore

installation may be disposed of at sea or left wholly or partly in place as a
derogation from the main rule if it can be demonstrated that, due to structural
damage or deterioration, or some other cause presenting equivalent difficulties,
there are significant reasons why such disposal is preferable to re-use or
recycling or final disposal on land. An assessment in accordance with Annex 2 to
the Decision would have to be carried out along with consultation under Annex 3.
This derogation is likely to apply only in very exceptional cases where for
significant environmental, technical or safety reasons an installation, or part of it,
cannot be removed. Again, the assessment could be judged against the criteria
and approach set out in Annex A to this guidance.

37
8. IMO GUIDELINES AND STANDARDS FOR THE REMOVAL OF
OFFSHORE INSTALLATIONS AND STRUCTURES

8.1 The International Maritime Organisation Guidelines and Standards for the
Removal of Offshore Installations and Structures on the Continental Shelf and in
the Exclusive Economic Zone, adopted by IMO Assembly on 19 October 1989,
(Resolution A.672 (16)), set out the minimum global standards to be applied to
the removal of offshore installations and structures.

8.2 The Guidelines and Standards, which were designed essentially to ensure
the safety of navigation, make clear that they are not intended to preclude a
coastal state from imposing more stringent removal requirements for existing or
future installations or structures on its continental shelf or in its exclusive
economic zone.

8.3 The UK Government's acceptance of OSPAR Decision 98/3 means that

the UK will apply the provisions of that instrument when considering the
decommissioning of offshore installations rather than the standards and
guidelines laid down by the IMO. However, certain aspects of the IMO
Guidelines and Standards will still be relevant:

Any disused installation or structure, or part thereof, which projects

above the surface of the sea should be adequately maintained.

An unobstructed water column of at least 55 metres must be

provided above the remains of any partially removed installation to
ensure safety of navigation.

The position, surveyed depth and dimensions of any installation not

entirely removed should be indicated on nautical charts and any
remains, where necessary, properly marked with aids to navigation.

The person responsible for maintaining any aids to navigation and for
monitoring the condition of any remaining material should be
identified.

The liability for meeting any claims for damages which may arise in
the future should be clear.

On or after 1 January 1998, no installation or structure should be

placed on any continental shelf or in any exclusive economic zone
unless the design and construction of the installation or structure is
such that entire removal upon abandonment or permanent disuse
would be feasible.

8.4 Most of these requirements are reflected in Annex 4 to the OSPAR

Decision which sets out the terms and conditions which must be specified in any
permit issued by a Contracting Party for disposal at sea.

38
8.5 Our requirements on the marking of any remains of an installation are set
out in Section 15 of this guidance.

39
9. TREATING, KEEPING AND DISPOSING OF WASTE

9.1 The Environment Agency (in England and Wales) and the Scottish
Environment Protection Agency (in Scotland) are responsible for administering
and enforcing the waste management controls. Anyone who deposits, recovers
or disposes of waste must do so in compliance with the conditions of a waste
management licence, or within the terms of an exemption from licensing, and in
a way which does not cause pollution of the environment or harm to human
health.

9.2 Movements of waste from the UKCS to other Member States and Non-
Member States are deemed to be a transboundary movement and therefore
subject to transfrontier regulations. Unless wastes are exempt from the scope
of Council Regulation No 1013/2006/EC, the Waste Shipment Regulation
(WSR) and the UK Management Plan for the Export and Import of Wastes, any
movements for disposal would be prohibited. While wastes generated by the
normal operation of oil platforms may be exempt from the scope of the WSR,
decommissioned installations are not. Any transboundary shipment for recovery
operations, which is not exempt from the scope of WSR, could be classified as a
shipment of unlisted waste. Unlisted waste shipments require prior written
notification to, and the written consent of, the competent authorities involved in
the shipment. Given the highly specialised nature of waste shipment controls,
operators planning to carry out any decommissioning or an associated activity
involving waste generated on offshore platforms should contact the relevant
Agency. Council Directive 2006/117/Euratum, transposed by the Transfrontier
Shipment of Radioactive Waste and Spent Fuel Regulations 2008, excludes
NORM wastes and the shipment of disused sources to authorised storage
facilities. Therefore transfer of such material does not require authorisation
under transfrontier shipment of radioactive waste. Further details are available in
the international shipments of waste guidance. These can be viewed at:
http://www.environment-agency.gov.uk/business/sectors/32447.aspx (Details of
the waste management licensing system, and other relevant legislation, are
contained in Annex D).

40
10. PIPELINE DECOMMISSIONING

General Approach

10.1. The Petroleum Act 1998 provides a framework for the orderly
decommissioning of both offshore installations and offshore pipelines. The
Pipeline Safety Regulations 1996, administered by the HSE, provide
requirements for the safe decommissioning of pipelines. This chapter provides
guidance on the approach to the decommissioning of pipelines on the UKCS.
The provisions of OSPAR Decision 98/3 do not apply to pipelines. There are no
international guidelines on the decommissioning of disused pipelines.
Decommissioning proposals for pipelines should be contained within a separate
programme from that for installations. However, programmes for both pipelines
and installations in the same field may be submitted in one document.

10.2 The following approach will be taken in considering the decommissioning

of pipelines on the UKCS:

decisions will be taken in the light of individual circumstances;

the potential for reuse of the pipeline in connection with further

hydrocarbon developments should be considered before
decommissioning together with other existing projects (such as
hydrocarbon storage and carbon capture and storage). If reuse is
considered viable, suitable and sufficient maintenance of the pipeline
must be detailed.

all feasible decommissioning options should be considered and a

comparative assessment made (the factors to be taken into account
are included in Annex C);

any removal or partial removal of a pipeline should be performed in

such a way as to cause no significant adverse effects upon the
marine environment;

any decision that a pipeline may be left in place should have regard to
the likely deterioration of the material involved and its present and
possible future effect on the marine environment.

account should be taken of other uses of the sea.

10.3 Where it is proposed that a pipeline should be decommissioned in place,

either wholly or in part, then the decommissioning programme should be
supported by a suitable study which addresses the degree of past and likely
future burial/exposure of the pipeline and any potential effect on the marine
environment and other uses of the sea. The study should include the survey
history of the line with appropriate data to confirm the current status of the line
including the extent and depth of burial, trenching, spanning and exposure.

41
10.4 Determination of any potential effect on the marine environment at the
time of decommissioning should be based upon scientific evidence. The
factors to be taken into account should include the effect on water quality and
geological and hydrographic characteristics; the presence of endangered,
threatened or protected species; existing habitat types; local fishery
resources; and the potential for pollution or contamination of the site by
residual products from, or deterioration of, the pipeline. In order to consider
the potential environmental impact it is necessary to evidence the contents of
the line and outline the cleaning operations that will be undertaken. In
addition to cleaning hydrocarbons reasonable endeavours to remove wax and
other contaminants, particularly where a line is to be decommissioned in
place, will be expected. Experience to date highlights the advantage of
commencing cleaning operations early in the decommissioning process.
Guidance on cleaning topsides and pipelines prior to decommissioning has
been developed through the Pilot Brownfields Initiative. This is available from
the Oil & Gas UK website:

http://www.oilandgasuk.co.uk/cmsfiles/modules/publications/pdfs/OP057.pdf

10.5 Because of the widely different circumstances of each case, it is not

possible to predict with any certainty what may be approved in respect of any
class of pipeline. Each will be considered on its merits and in the light of a
comparative assessment of the alternative options. This policy also applies to
pipeline bundles which are already in place on the seabed. The Department
would however expect that any new pipeline bundles which are currently under
construction should be designed for future removal.

Leaving in place

10.6 As a general guide the following pipelines (inclusive of any "piggyback"

lines and umbilicals that cannot easily be separated) may be candidates for in-situ
decommissioning:

those which are adequately buried or trenched and which are not
subject to development of spans and are expected to remain so;

those which were not buried or trenched at installation but which are
expected to self bury over a sufficient length within a reasonable
time and remain so buried;

those where burial or trenching of the exposed sections is

undertaken to a sufficient depth and it is expected to be permanent;

those which are not trenched or buried but which nevertheless are
candidates for leaving in place if the comparative assessment shows
that to be the preferred option (e.g. trunk lines);

42
 those where exceptional and unforeseen circumstances due to
structural damage or deterioration or other cause means they cannot
be recovered safely and efficiently.

10.7 Judgements regarding the degree of burial or trenching necessary will be

undertaken on a case by case basis in the light of individual circumstances. We
will wish to be satisfied that the pipeline is sufficiently buried or trenched below
seabed level to avoid obstruction to other uses of the sea. Decisions on the
appropriate depth of burial or trenching will take account of seabed conditions
and other relevant factors but it is expected that burial or trenching to a minimum
depth of 0.6 metres above the top of the pipeline will be necessary in most
cases.

Removal

10.8 Small diameter pipelines, including flexible flowlines and umbilicals which
are neither trenched nor buried should normally be entirely removed.

10.9 Any mattresses or grout bags which have been installed to protect
pipelines during their operational life should be removed for disposal onshore. If
the condition of the mattresses or grout bags is such that they cannot be
removed safely or efficiently then any proposal to leave them in place must be
supported by an appropriate comparative assessment of the options. The
Department would however be willing to consider a proposal to leave any
mattresses or grout bags in place if they are under the pipeline and it can be
demonstrated that this would not cause a snagging protrusion above the
pipeline.

10.10 In the case of rock-dump that has been used to protect a pipeline it is
recognised that removal is unlikely to be practicable. It is assumed therefore that
rock-dump will remain in place, unless there are special circumstances that
would warrant consideration of removal. If the rock-dump is associated with a
pipeline that is being left in place then it would be expected that the rock-dump
would remain undisturbed. If, however, it is associated with a pipeline that is
being removed then minimum disturbance of the rock-dump to allow safe
removal of the pipeline and the elimination of any seabed obstruction that may
result from the presence of the rock, would be expected.

Monitoring

10.11 Pipelines decommissioned in place will be subject to a suitable monitoring

programme agreed with DECC in consultation with other Government
Departments. Details should be specified in the decommissioning programme.
The form and duration of the monitoring programme will depend upon the
prevailing circumstances and, if necessary, be adapted with time. However a
typical monitoring regime should commence with a post-decommissioning
survey at the completion of decommissioning work. Following all surveys,
inspection reports should be submitted to DECC's Offshore Decommissioning
Unit. If these show the existence of potential hazards to other users of the sea

43
then proposals for appropriate maintenance or remedial work should also be
included

10.12 Following a DECC commissioned study to determine the appropriate

requirements for long term monitoring of these lines the Department has
concluded that a risk based monitoring scheme based on pipeline stability and
potential impact remains appropriate for lines which are decommissioned in
place. Each pipeline must be judged on its individual burial history and condition
when establishing a monitoring scheme. Inspections of pipelines should then be
undertaken for a fixed period depending on the risk criteria after which time they
may move to a reactive basis i.e. surveys only if concerns arise about the
pipeline. As part of this process DECC will be closely involved with the Operator
during the monitoring phase and will review the findings of reports in
consultation with other Government Departments and fishermen representatives
before deciding whether a reactive basis is appropriate.

Deferral

10.13 In those cases where a pipeline reaches the end of its operational life
before other facilities in the field, the Operator should notify DECCs Offshore
Decommissioning Unit that the pipeline is no longer in use. DECC will send the
Operator a Disused Pipeline Notification form requesting details on the status of
the pipeline that has been taken out of use. The Disused Pipeline Notification
has been drawn up in consultation with the Scottish Government - Marine
Scotland, the Department of Environment, Food and Rural Affairs, the Health and
Safety Executive and Oil & Gas UK. Upon receipt of this information DECC in
discussion with other Government Departments, including the SG-MS, DEFRA
and HSE, will consider whether a decommissioning programme for the pipeline
is appropriate at this stage or whether its final decommissioning can be dealt
with at end of field life along with the other facilities in the field.

10.14 Amongst the factors to be taken into account in deciding the approach to
a redundant pipeline in these circumstances will be the length, diameter and
construction of the pipeline; its location and the extent to which the pipeline is
trenched or buried; and the stability and integrity of the pipeline including the
presence of any spans in excess of 0.8 metres in height and 10 metres in length
and/or which are likely to present a hazard to fishing activity.

10.15 If it is agreed that final decommissioning may be delayed until a more

appropriate time, DECC will issue a letter setting out the conditions upon which
it is prepared to defer formal decommissioning. This may include the
requirement to carry out remedial work on the pipeline. DECC will wish to be
satisfied that leaving the pipeline in place until end of field life will not prejudice
any final decommissioning solution including complete removal - and that the
pipeline will be subject to an appropriate surveying and maintenance regime.
Following future surveys DECC will write to the operator to confirm the status of
the pipeline.

10.16 In cases where decommissioning is deferred as detailed above, the

pipelines concerned are considered to form part of the Interim Pipeline Regime.

44
(Further details are available on DECCs Oil & Gas
Websitehttp://www.og.decc.gov.uk/upstream/decommissioning/decom2.htm ).

Consultation

10.17 The consultation arrangements set out in Section 6 apply equally to

pipeline decommissioning programmes.

Territorial Sea

10.18 Pipelines that cross the UK seabed within the territorial sea (12 nautical
miles from the UK coastline) are likely to be subject to a lease granted by The
Crown Estate which will include a rental payment based upon the size of the
pipeline. Operators may apply to The Crown Estate for termination of the rent
upon completion of decommissioning works or suspension of the rent if the
pipeline has fallen into temporary disuse.

45
11. DRILL CUTTINGS

11.1 Many offshore installations located on the UKCS, particularly in the

northern sector of the North Sea, have significant volumes of drill cuttings
deposited on the seabed beneath them. In some cases the 'footings' of the
jacket are embedded within a cuttings pile and any attempt to entirely remove
the installation will be impossible without disturbance or removal of the drill
cuttings piles.

11.2 In 1998, in response to concerns Oil & Gas UK initiated an industry study
of the issues associated with the accumulation of drill cuttings beneath offshore
installations. The study was completed and the results presented to OSPAR in
February 2002. Further information on the work undertaken and the outcomes is
available from the Oil & Gas UK website (www.oilandgasuk.co.uk).

11.3 Following presentation of the study, OSPAR agreed that Contracting

Parties should consider with their industries the feasibility of surveying
representative cuttings accumulations so as to provide an indication of the
environmental impacts of individual piles. As a result, a joint industry initiative
involving a sampling cruise of various UKCS fields was undertaken in 2004. The
results of this survey, along with an outline management regime reflecting the
survey outcomes were presented to OIC 2005 and the UK developed a proposal
for OIC 2006 adopted as OSPAR Recommendation 2006/5 (See Annex I).

11.4 The Recommendation had effect from 30 June 2006 and introduced a
two stage management regime. Stage 1 provided for initial screening of all
cuttings piles, to be completed by 30 June 2008 to identify any piles that require
further investigation based on the thresholds set out in the Recommendation.
Industrys subsequent report assessing UK cuttings piles in line with the
Recommendation concluded that they were all below the specified thresholds.
These results were submitted as part of DECCs implementation report to OIC
2009 and have informed the UK strategy. There is no need for immediate
remediation of UK drill cuttings. However, at the time of decommissioning the
associated installations the characteristics of the relevant cuttings piles should be
assessed in detail and the need for further action in line with Stage 2 of the
Recommendation reviewed, see next paragraph.

11.5 A draft decommissioning programme should record the outcome of Stage

1 screening for any cutting piles present under the installation(s). If the Stage 1
assessment was based on extrapolation of data for the piles, the results should
be verified with survey data for the piles in question. Where either threshold in
Recommendation 2006/5 is exceeded, Stage 2 will apply and will require a study,
including a comparative assessment, to determine the best option for handling
the cuttings pile. DECC will agree the time at which Stage 2 should be initiated,
taking account of the rate of oil loss, the persistence and the timing of
decommissioning of the associated installations (See Annex C for further details).

46
 12. ENVIRONMENTAL CONSIDERATIONS

Environmental Impact Assessments

12.1 Although there is currently no statutory requirement to undertake an

Environmental Impact Assessment (EIA) at the decommissioning stage, a
decommissioning programme will nevertheless need to be supported by an EIA.
The Environmental Statement (ES) submitted for the development under the EIA
regulations requires the applicant to consider the long-term impacts of the
development and these include the impacts arising from decommissioning.
However, in the light of the lengthy period of time between project sanction and
decommissioning, the requirement for a detailed assessment is deferred until
closer to the time of actual decommissioning and is submitted as part of the
decommissioning programme. In the case of an OSPAR derogation candidate it
will be necessary to address through the EIA the environmental impacts of
alternative disposal options as part of the Comparative Assessment. However,
in the majority of cases where total removal applies and a Comparative
Assessment is not required it will only be necessary for the EIA to address the
impacts of the proposed decommissioning activity on the environment. Further
details on the information that should be included in an EIA are set out in Annex
C (see also Annex A).

Environmental Regulations

12.2 During the development, consideration and implementation of the

decommissioning programme, operators should discuss the proposals with
DECCs Offshore Environment Unit, to determine whether the following
regulations are relevant to the proposed works, and to discuss the procedures
for obtaining or surrendering any relevant permits. Separate, detailed guidance
can be found on http://www.og.decc.gov.uk/environment/index.htm

The Offshore Petroleum Activities (Conservation of Habitats) Regulations 2001

12.3 These regulations apply the Habitats Directive and the Wild Birds
Directive in relation to offshore oil and gas plans and projects wholly or partly on
the UKCS. The regulations apply to decommissioning proposals and in the light
of the information provided in the ES, DECC in consultation with the Joint Nature
Conservation Committee (JNCC) and/or the Countryside Agencies (Natural
England, Countryside Council for Wales and Scottish Natural Heritage), will
decide whether the proposals are likely to have a significant effect on the
habitats and species covered by the regulations, and whether there is a
requirement to undertake an Appropriate Assessment. It should be noted that
the regulations do not apply to artificial habitats created by the infrastructure that
is the subject of the decommissioning programme, and it will therefore be
unnecessary to justify the removal of structures that have been colonised by
protected or rare species. However, it is still a requirement to conduct surveys
to establish whether such species or habitats are present and to what extent. If
their presence is significant an Appropriate Assessment may still be required and
it will be necessary to understand what mitigation measures would be
appropriate. (See also paragraph 12.11 and Annex C, paragraph10).

47
The Offshore Chemical Regulations 2002

12.4 These regulations implement, OSPAR Decision 2000/2 on a Harmonised

Mandatory Control System for the Use and Reduction of the Discharge of
Offshore Chemicals. Where it is proposed to use or discharge chemicals during
the decommissioning of an offshore installation or pipeline, the Operator will
need to apply to DECC for the appropriate permit. The application should be
submitted using a PON 15E or, if chemical use and discharge is minimal, using
an existing PON 15D to request a variation of the production chemical permit.

The Offshore Petroleum Activities (Oil Pollution Prevention and Control)

Regulations 2005

12.5 These regulations prohibit the discharge of oil into the sea from an
offshore installation or pipeline, except under authority of a permit. Operators
will be required to make provision for the removal and recycling of oil recovered
during the decommissioning, but it will be possible to apply for a permit for the
discharge or reinjection of certain types and quantities of oil. Applications should
be submitted to DECC, using the standard OPPC application form. Further
guidance is available at: http://www.og.decc.gov.uk/environment/opaoppcr.htm

The Offshore Combustion Installations (Prevention and Control of Pollution)

Regulations 2001

12.6 These regulations implement the Integrated Pollution Prevention and

Control (IPPC) Directive for offshore oil and gas installations. Under the
regulations a permit is required from DECC if the aggregated thermal capacity of
the combustion equipment on the installation exceeds 50 MW(th). Such permits
will have been issued prior to decommissioning and when the aggregated
thermal capacity of the relevant plant falls below the 50 MW(th) threshold during
the course of the decommissioning operations, the installation will no longer be
subject to the controls and the Operator will be required to surrender the permit.

The Greenhouse Gases Emission Trading Scheme (ETS) Regulations 2003

12.7 These regulations implement the EU Emissions Trading Scheme (EUETS).

Under the regulations, operators are required to apply to DECC for a permit
covering the emission of greenhouse gases (currently only CO2), if the
aggregated thermal capacity of the combustion equipment on the installation
exceeds 20 MW(th). Such permits will have been issued prior to
decommissioning, and must be surrendered when the aggregated thermal
capacity falls below the threshold. The installation will then be deemed
closed, and will drop out of the EU Emissions Trading Scheme. Installations
will be able to retain and trade any surplus allowances for the year of closure,
i.e. when they fall below the threshold and drop out of the Scheme, but will not
receive any allowances for future years.

48
The Merchant Shipping (Oil Pollution Preparedness, Response and Co-operation
Convention) Regulations 1998

12.8 Under these regulations operators of offshore oil and gas installations and
pipelines are responsible for preparing and submitting an Oil Pollution Emergency
Plan (OPEP) to DECC. The expectation is that the OPEP will cover all activities
where there is a risk of a hydrocarbon spill, including activities relating to
decommissioning. This may be achieved by the incorporation of
decommissioning activities into the existing field OPEP or by producing a
decommissioning specific OPEP.

Environmental Surveys

12.9 Surveys around an installation to establish an environmental baseline may

need to be undertaken before decommissioning if relatively recent survey data
does not already exist. In most cases, it is unlikely that a new baseline survey
would be required if a relevant survey has been undertaken in the last five years.
It should be noted that the scope of existing or proposed baseline surveys should
be comparable to the requirements in paragraph 12.16.

12.10 Precise requirements will differ according to individual conditions.

Discussions on what may be required in an individual case should be held with
DECCs Offshore Decommissioning Unit before an Operator develops the survey
strategy.

Lophelia pertusa/Sabellaria

12.11 The coldwater coral, Lophelia pertusa and reef forming worm Sabellaria
are known to exist on or around offshore installations. The coral and Sabellaria
are species of conservation interest and surveys may be necessary to establish
their presence. As with all marine species, if there is a significant growth of coral
or an established Sabellaria reef the potential impact of the operations on these
species should be assessed in the EIA. An Appropriate Assessment may also be
conducted. (See also Annex C, paragraph10). If the coral is present and the
installation upon which it is located is to be returned to shore it will be necessary
to discuss with DEFRA the requirements of the Convention on International
Trade in Endangered Species. (See also Annex D).

Debris clearance

12.12 Upon completion of each decommissioning operation, appropriate

surveys should be undertaken to identify and recover any debris located on the
seabed which has arisen from the decommissioning operation or from past
development and production activity.

12.13 The area to be covered will depend on the circumstances of each case.
However, the minimum required will be a radius of 500 metres from the location
of an installation.

49
12.14 Debris surveying and removal may be required up to 100 metres either
side of a decommissioned pipeline over its whole length.

12.15 Following the removal of any debris, independent verification of seabed

clearance will be required. The advisability of post-decommissioning over-
trawling to confirm that the area is clear of debris will be considered on a case-
by-case basis and will be dependent upon the extent of any cuttings piles and
any other relevant circumstances.

Sampling post-decommissioning

12.16 In addition to debris surveys, a post-decommissioning environmental

seabed sampling survey should be undertaken, in particular to monitor levels of
hydrocarbons, heavy metals and other contaminants in sediment and biota.

12.17 In each case, operators should develop their survey strategy in

consultation with DECCs Offshore Decommissioning Unit who will take
specialist advice from DECC colleagues and other Government Departments.

12.18 Details of the survey strategy should be included in the decommissioning

programme.

12.19 In most cases a second survey will need to be undertaken some time
after the post-decommissioning sampling. Any further surveys will depend upon
the results of earlier work and the circumstances of each case.

Reporting

12.20 The results of all surveys should be submitted to DECCs Offshore

Decommissioning Unit. These will normally be included in the post-
decommissioning Close-out report referred to in Section 13. Verification of
seabed clearance will also be necessary and may be provided in the form of a
seabed clearance certificate issued by an independent party. A copy of the
seabed clearance certificate should also be submitted to the Seabed Data Centre
(Offshore Installations) at the United Kingdom Hydrographic Office (see Section
15 for full address).

50
13. CLOSE OUT REPORTS

13.1 At the conclusion of decommissioning operations the Operator will be

required to satisfy DECC that the approved programme has been implemented.
This will involve the submission of a Close-out Report within four months of the
completion of offshore work, including debris clearance and post-
decommissioning surveys. The report should explain major variations from the
decommissioning programme and should summarise the following:

Information on the outcome of the decommissioning programme as a

whole. This should outline how the major milestones were achieved.
This information should provide confirmation that work has been
carried out in accordance with the terms of the programme.

An explanation of any major variances from the programme including

why they occurred and an indication of any permits required as a
result. Where appropriate include exact quantities of recovered
hydrocarbons, sludges, heavy metals, sacrificial anodes and
radioactive material including LSA (Low Specific Activity) scale.

The results of debris clearance and any monitoring undertaken. Any

independent verification (e.g. seabed clearance certificates) should be
attached.

The results of the post-decommissioning environmental sampling

survey including any immediate consequences of the
decommissioning activity which have been observed. If necessary
update the schedule for future environmental monitoring or monitoring
of items left in place with reasons for the changes.

Measures taken to manage the potential risks arising from any

legacies, including participation in the Fisheries Legacy Trust Company
(see Section 16.4), confirmation of marking any remains on mariners
charts, inclusion in the Fishsafe system and installation of
navigational aids.

Provide high level summary of actual costs and a general explanation

of any difference against forecast costs.

13.2 Following submission of the Close-out Report to DECC the Operator

will be asked to place a copy on their website. DECC will send a letter to the
Operator to confirm acceptance of the close-out report. HM Revenue and
Customs will regard DECCs acceptance of the close-out report as marking
the completion of the project for tax purposes.

13.3 Companies should also remember that geotechnical data collected

under the petroleum licence should either be placed in the National
Hydrocarbons Data Archive (NHDA, http://www.bgs.ac.uk/nhda/) or kept in
perpetuity in accordance with the licence model clauses. The NHDA option

51
should normally be considered at Cessation of Production. Further
information regarding data storage requirements can be found at section 6.6
of the Guidance Notes of Procedures for Regulation of Offshore Oil and Gas
Developments which can be viewed on DECCs Oil & Gas Website at
https://www.og.decc.gov.uk/regulation/guidance/index.htm

52
14. POST-DECOMMISSIONING MONITORING OF REMAINS

14.1 If, following OSPAR consultation procedures, it is agreed that a concrete

installation or the 'footings' of a steel installation should be left in place, the
condition of the remains will have to be monitored at appropriate intervals by the
owners. A suitable monitoring regime should be agreed with DECC who will
consult other Government Departments and Agencies with an interest. Details
of the monitoring regime should be specified in the decommissioning
programme.

14.2 The form and duration of the monitoring programme will depend upon the
particular circumstances and if necessary will be adapted with time. Inspection
reports should be submitted to DECCs Offshore Decommissioning Unit together
with proposals for any maintenance or remedial work that may be required. The
reports should also be published by appropriate means (e.g. on the internet).

14.3 In accordance with Annex 4 to the OSPAR Decision (which sets out the
conditions to be attached to any permits granted in accordance with the
Decision), the first step in any monitoring programme has to be taken before
decommissioning operations begin. Annex 4 requires independent verification
that the condition of the installation before the disposal operation commences is
consistent with both the terms of the Secretary of State's approval and the
information upon which the assessment of the proposed disposal is based. This
will include details of the fate of any hazardous substances. The approach to this
requirement will be addressed on a case by case basis. It will be for the Operator
to propose a suitable organisation to carry out the independent verification.

14.4 In accordance with paragraph 10 of the OSPAR Decision it will be

necessary for DECC to submit to OSPAR a post-disposal report indicating how
the disposal operation was carried out, any immediate consequences of the
disposal which have been observed and confirmation that the disposal has been
implemented in accordance with the terms of the decommissioning programme.
This report must be submitted within 6 months of the completion of the
disposal. It will be drafted by DECC based on the Operators Close-out report
(see Section 13 of this guidance). DECC will provide the Operator with the
opportunity to review the report before it is submitted to OSPAR.

14.5 Any pipelines left in place will also be subject to a monitoring regime
agreed with DECC as part of the decommissioning programme (see Section 10
of this guidance).

53
15. MARKING OF REMAINS AND SAFETY ZONES

15.1 It is the Operators responsibility to ensure that at least 6 weeks advance

notification of the change in status of decommissioned installations and pipelines
is given to:

The United Kingdom Hydrographic Office

Seabed Data Centre (Offshore Installations)
Admiralty Way
Taunton
Somerset
TA1 2DN

so that mariners may be advised and appropriate amendments made to charts.

15.2 In those cases where it is agreed that a concrete installation, the

'footings' of a steel installation or a pipeline should remain in place, the Operator
must ensure that the position (horizontal datum to be stated), surveyed depth
and dimensions of the remains are forwarded immediately to the Hydrographic
Office, for inclusion on Admiralty charts. In addition, the Hydrographic Office
Radio Navigation Warnings (RNW) section should be contacted 24 hours in
advance of offshore activity concerning the removal and tow of platforms, FPSOs
and other surface structures. The RNW duty officer can advise on details
required and can be contacted on Tel: 01823 353448 (email:
navwarnings@btconnect.com

15.3 It should be noted that drill cuttings accumulations will only be marked on
Admiralty charts if it is considered that they present a danger to surface
navigation or alter the charted seabed depth significantly. In such cases they
would be recorded as a foul or shoal depth. Details of any cuttings piles that
may fall into this category should be discussed with the Hydrographic Office.

15.4 It is the Operators responsibility to install and maintain navigational aids

for any remains of concrete installations that project above the surface of the
sea. The nature of the navigational aids to be employed should be discussed
with DECC, the relevant lighthouse authorities and with interested parties such
as fishermen and other mariners. It is the Operator's responsibility to ensure the
maintenance of any such navigational aids. Details of the action to be taken to
advise mariners and mark any remains should be included in the
decommissioning programme; the Hydrographic Office should be kept informed.

Safety Zones

15.5 A safety zone is an area of 500m radius established automatically around

all offshore oil and gas installations which project above the sea at any state of
the tide. Vessels of all nations are required to respect them. It is an offence
(under section 23 of the Petroleum Act 1987) to enter a safety zone except under
special circumstances. The zone stays in place during the decommissioning
period and only ceases when the structure no longer projects above the surface

54
of the sea. Any doubt about the continuation of a safety zone during
decommissioning work should be discussed with the HSE.

15.6 Safety zones around some installations emplaced before the introduction
of the Petroleum Act 1987 were created by statutory instrument. The
establishment of a safety zone around a sub-sea installation is also made by
statutory instrument and application should be made to the HSE who will arrange
consultation with other Government Departments. Following decommissioning
it will be necessary to apply to the HSE for removal of a zone established by
statutory instrument. If subsequently it becomes necessary to undertake any
work on facilities that remain in place, the safety zone can be re-established to
cover these works.

55
16. RESIDUAL LIABILITY AND DECOMMISSIONING LEGACIES

16.1 The persons who own an installation or pipeline at the time of its
decommissioning will remain the owners of any residues. Any residual liability
remains with the owners in perpetuity. In addition, those with a duty to secure
the decommissioning programme is carried out will remain responsible for
complying with any conditions attached to the Secretary of State's approval of
the decommissioning programme. In cases of potential default where the
Secretary of State is concerned that the current parties may no longer be able to
carry out the approved programme he will consider whether to utilise section 34
of the Petroleum Act 1998 to give additional companies an obligation to carry out
the work. Section 3 of this guidance provides further information regarding the
use of section 34. Essentially any company that was previously in receipt of a
section 29 notice for the equipment covered by the programme, or any person
on whom notices could have been served since the serving of the first section
29 notice could be added as a party to the programme. This is a measure of last
resort and only used in a potential default situation where significant work under
the programme is necessary.

16.2 Any remains of installations or pipelines will be subject to monitoring at

suitable intervals as specified in each decommissioning programme (see
Sections 10 and 14 of this guidance) and may require maintenance or remedial
action in the longer term. Such action may be the subject of a revision to the
programme. Should remedial action be considered as a result of significant
advances in technology a comparative assessment would need to be carried out
to determine the benefits of such action in relation to safety, technical,
environmental, social and cost aspects.

16.3 Any claims for compensation by third parties arising from damage caused
by any remains will be a matter for the owners and the affected parties and will
be governed by the general law.

16.4 Measures to manage the potential risks arising from any legacies
should be addressed in the decommissioning programme. Legacies arising
from offshore oil and gas activity have particular implications for fishermen.
As a result, the oil and gas industry, through Oil & Gas UK, and fishermans
representatives have established a Fisheries Legacy Trust Company. This
may manage some post-decommissioning activities and legacies and assists
both industries to work safely and efficiently together by promoting
harmonious working relations. Where the Trust Company is used to manage
activities associated with a decommissioning project this should be reflected
in the programme. See the following links for more information
http://www.oilandgasuk.co.uk/knowledgecentre/Fisheries.cfm
http://www.ukfltc.com/home.aspx

16.5 The relinquishment of the field licence is not related to completion of a

decommissioning programme or any ongoing liabilities under it. The timing of
relinquishment is a separate matter which should be discussed with DECCs
Licensing Unit.

56
17. INDUSTRY CO-OPERATION AND SYNERGY

17.1 The Government encourages Industry co-operation and collaboration at

the decommissioning stage in order to minimise its various impacts. The
decommissioning phase, where the competitive pressures are less than at the
development and production stage, offers an ideal opportunity for companies to
share decommissioning expertise. This can range from co-operation on studies
or the exchange of information or ideas to collaboration on specific
decommissioning projects and proposals. Oil & Gas UK, the Pilot Initiative and
The Early Decommissioning Synergy Group (TEDS) all promote co-operation. In
discussing decommissioning proposals with operators, DECC will also seek to
identify opportunities for co-operation wherever possible.

17.2 The development of new technology and new techniques to tackle the
challenges that arise at the decommissioning stage will be particularly important.
Much research and development work has already been done or is currently
underway. The joint industry Decommissioning Technology Forum (DTF) has
played an important part in identifying and developing specific areas of
technology. The Industry Technology Facilitator (ITF) is identifying technology
needs for the decommissioning phase and promoting their development and
implementation. Further information on the ITF is available from the following
link: http://www.oil-itf.com/

57
18. THE UK OIL PORTAL

18.1 In line with UK Government policy for all business processes to be

carried out electronically, the UK Oil Portal provides authenticated access to
the e-commerce systems of DECCs Energy Development Unit. The Portal
provides a secure electronic environment which allows industry to apply for
and receive consent or direction on a wide range of activities relating to
hydrocarbon exploration, production, development, decommissioning and the
protection of the environment.

18.2 The serving of notices under section 29 of the Petroleum Act 1998
(see Section 3) was transferred to the Portal in 2007. Other key
decommissioning procedures will move to the Portal in due course.

18.3 Benefits of using the Portal for section 29 processes:

makes the process more efficient by making electronic

notifications immediately and concurrently available to all
relevant parties, irrespective of their geographical location.

contacts have 24 hour worldwide access to details of all

section 29 notices issued to their company.

takes advantage of a paperless transaction.

provides a reliable audit of the notification process with

accountability.

provides the Offshore Decommissioning Unit with a direct and

simple mechanism to disseminate relevant information to S29
Portal Contacts.

provides easy access to support for both the business process

and the information technology side.

18.4 For further details regarding Portal accounts for section 29 processes
contact julie.benstead@decc.gsi.gov.uk (tel. 01224 254034). Account holders
will only be given access to information relevant to their company.

58
19. PROVISION FOR HISTORICALLY IMPORTANT RECORDS

19.1 In March 2006 an initiative began to establish an archive of the UK

offshore oil and gas industry with the aim of ensuring that important record
material is preserved for future generations.

19.2 The idea evolved from a scheme already underway in Norway relating to
records of the UK/Norwegian Frigg gas field, which ceased production in 2004.
The UK project was launched at a successful conference Capturing the Energy
held in Aberdeen in March 2006. The conference urged wider recognition of the
huge importance of the offshore oil and gas industry through the creation and
exploitation of a UK archive.

19.3 The intention is that companies will make provision for keeping the most
important records as their operations evolve, ensuring that they can be safely
stored, in a centralised archive repository, or network of repositories, so that they
can be made accessible both within the sector and wider community for current
research and future generations.

19.4 A number of organisations have given their support to the initiative,

including Oil & Gas UK, major oil companies, Scottish Enterprise Grampian, the
Royal Commission on the Ancient and Historical Monuments of Scotland
(RCAHMS), the Business Archives Council of Scotland (BACS), Historic Scotland,
Mearns and Gill, the University of Aberdeen and Aberdeen City Council. The hub
of the archival network will be at the University of Aberdeen which has strong
links with the sector.

19.5 DECC fully supports the scheme and recognises that decommissioning
represents a key milestone which provides the opportunity to ensure that
important data relating to the life of a field development and operations is
preserved for the future. DECC has identified those projects which are of
particular importance in this respect, and would encourage operators to discuss
their records and information with the Capturing the Energy initiative.

19.6 Further details can be obtained from:

Capturing the Energy

Special Libraries & Archives
King's College
Aberdeen
AB24 3SW

http://www.capturing-the-energy.org.uk/
Email: info@capturing-the-energy.org.uk
Phone: +44 (0)1224 272972
Fax: +44 (0)1224 273891

59
 ANNEX A

ASSESSMENT CRITERIA FOR OSPAR DEROGATION CANDIDATES

1. OSPAR Decision 98/3 recognises that there may be difficulty in removing

the footings of large steel jackets weighing more than 10,000 tonnes and in
removing the substructures of concrete installations. Exceptional and
unforeseen circumstances resulting from structural damage or deterioration or
equivalent difficulties may also prevent an installation from being totally
removed. As a result there is provision for derogation from the general rule of re-
use, recycling or final disposal on land for these categories of installations.

2. If an installation falls within the derogation categories then a detailed

assessment of the alternative disposal options must be carried out by the
Operator. The framework for this assessment is set out in Annex 2 to the
OSPAR Decision and includes an indication of the matters to be taken into
account in assessing the disposal options.

3. For the matters identified in Annex 2 to the OSPAR Decision, operators

should require the impact of each option to be assessed using established
methodologies. The preferred option should be selected by focusing on the
matters where the impacts of the options are significantly different. The means
used to reach the conclusion should be described.

4. The presumption in the OSPAR Decision is that all installations will be

removed. It is important therefore in comparing the options for derogation
candidates to start from a baseline of complete removal. If the comparative
assessment of the options identifies two or three matters that show a significant
difference, judgement will need to be exercised as to which should be given the
greatest consideration. There is no outright hierarchy, although balancing the
safety and environmental impacts of the options, including the impact on climate
change, will clearly be important. Options where the safety risks are intolerable
or involve major unacceptable environmental impacts may be ruled out without
further consideration. Proportionality must also be considered but it is unlikely
that cost will be accepted as the main driver unless all other matters show no
significant difference. The engagement of interested stakeholders in balancing
the impacts of the options is strongly recommended.

5. The following Matrix and supporting information is designed to assist with

the process and provide further information on the criteria that may be applied in
carrying out an assessment of the options. The intention is to provide greater
consistency to the evaluation of derogation cases, ensure transparency and in
turn provide greater confidence in the derogation process.

6. Following detailed assessment of the options against the OSPAR

framework the Operator may wish to present the outcomes in the form of the
Matrix below or adapt it to the particular circumstances of the case. Inclusion of
such a Matrix in the decommissioning programme together with an explanation
of the basis for the ranking of the matters to be considered for each

60
decommissioning option will help to provide a clear overall indication of the
acceptability of the derogation case.

7. Companies and government will also wish to take account of reputational

issues from their own perspective. These are important considerations and may
well influence the final decision. However, they should not be included in the
comparative assessment process but addressed in a wider context and
separately from the decommissioning programme.

61
 DECOMMISSIONING OPTIONS

ASSESSMENT Matters to be Complete Partial Leave Disposal

CRITERIA considered removal removal wholly at sea *
to land to land in place

Safety risk to personnel

risk to other users of

the sea

risk to those on land

Environmental marine impacts

other environmental
compartments
(including emissions
to the atmosphere)

energy/resource
consumption

other environmental
consequences
(including cumulative
effects)

Technical risk of major project

failure

Societal fisheries impacts

amenities

communities

Economic

HIGH MEDIUM LOW

* Although under OSPAR Decision 98/3 the disposal of the substructure of a

concrete installation at a deep-water licensed site is still an option this must be
considered against the UK Government announcements at the time of the
Decision when Ministers stated that there would be no toppling and no local or
remote dumping of offshore installations.

62
NOTES

Safety:

In assessing and comparing the safety risks of different options the general
principles of risk management used within the industry should be applied.

The use of quantitative risk assessment (QRA) techniques should be

employed. Typical mechanisms include using Potential Loss of Life (PLL),
Individual Risk Per Annum (IRPA) and Fatal Accident Rate (FAR) criteria.

Comparison should be made with the risk levels generally supported by the
Health & Safety Executive who define the maximum tolerable level of
individual risk of fatality as 1 in 1000 per year, and for the broadly acceptable
level of individual risk to be set in the range of 1 in 100,000 to 1 in 1 million
per year.

Where different corporate risk levels to those indicated above have been
adopted, comparison should also be made with these.

The risks should also be set in context by drawing comparison with the risks that
were judged to be acceptable during the installation and development phase and
the risks that exist in other industries.

Environmental:

The assessment and comparison of the environmental impacts of different

options should be based on an Environmental Impact Assessment (EIA)
carried out in accordance with the widely recognised techniques and standard
methodologies for such evaluations. This should include consideration of the
impact on climate change.

DECCs Guidelines on the preparation of Environmental Statements provides

further guidance (http://www.og.decc.gov.uk/environment/opppr_2007.htm).

An assessment of the impact of all activities at the offshore location and also
at the onshore dismantling and disposal site should be carried out. If the
disposal site is not known, a generic assessment of environmental impacts at
a typical disposal site should be carried out.

In assessing energy and resource consumption, as well as any discharges or

emissions to the environmental compartments, the internationally agreed
principles for environmental life cycle assessments should be followed.

Technical feasibility:

Recognised QRA techniques, engineering and operational analysis should be

used in combination to provide comprehensive, robust, quantitative and
qualitative assessments of the options.

63
 Comparison should be made with accepted industry risk assessment criteria
for marine operations. Consideration of the risks associated with the work
will include evaluation of the maximum acceptable probability of a major
accident, judged against corporate standards and where possible the criteria
adopted during the installation phase.

The assessment of the technical feasibility of different decommissioning

options should be based on existing industry experience and available
equipment. But where possible account should also be taken of the planned
timing of the work and foreseeable developments in technology.

Societal

The engagement of interested stakeholders will be important in order to

assess and take account of the views of different interest groups. The Oil &
Gas UK Guidelines on Stakeholder Engagement for Decommissioning
Activities should be consulted at http://www.oilandgasuk.co.uk/

The impacts on fisheries and fishing activity will be of particular importance.

This should be assessed with regard to the level of activity in the area and the
long-term impacts, the safety of fishermen and mitigation measures that can
be put in place.

Employment and regional development opportunities should be considered.

Economic

Establishing accurate cost estimates is important not only from a company

point of view but for Government given that under the UK tax regime a
significant proportion of decommissioning costs ultimately falls to the
Exchequer.

In preparing cost estimates, account should be taken of the work undertaken

in workgroup 4 of the Pilot Brownfields initiative to establish a common
approach to decommissioning costs. Guidelines are available on the Oil &
Gas UK website http://www.oilandgas.co.uk/

In assessing alternative decommissioning options proportionality should be

considered and costs should be balanced against the other assessment
criteria. However, it is unlikely that costs alone will be accepted as the
deciding factor in arriving at the preferred option unless all other matters
show no significant difference.

Verification

In addition to stakeholder engagement it is important that the studies and the

assessment process that supports the chosen decommissioning option are
subject to independent expert verification. The purpose of this verification is to
confirm that the assessments are reliable and there is no requirement to verify
the final means of weighting and balancing the options but the process must be

64
transparent. This may involve the establishment of an independent review
process to evaluate the scope, quality and application of the work undertaken.
Experts in particular fields may be engaged to evaluate and confirm specific
aspects of the project.

DECC may itself engage consultants to test particular aspects of the

decommissioning proposals or to confirm that accepted practices and
methodologies have been used.

65
 ANNEX B

OSPAR Decision 98/3 on the Disposal of Disused Offshore

Installations

66
 RECALLING the Convention for the Protection of the Marine Environment of the
North East Atlantic, in particular Articles 2 and 5 of that Convention,

RECALLING the relevant provisions of the United Nations Convention on the

Law of the Sea,

RECOGNISING that an increasing number of offshore installations in the

maritime area are approaching the end of their operational life-time,

AFFIRMING that the disposal of such installations should be governed by the

precautionary principle, which takes account of potential effects on the
environment,

RECOGNISING that re-use, recycling or final disposal on land will generally be

the preferred option for the decommissioning of offshore installations in the
maritime area,

ACKNOWLEDGING that the national legal and administrative systems of the

relevant Contracting Parties need to make adequate provision for establishing
and satisfying legal liabilities in respect of disused offshore installations,

THE CONTRACTING PARTIES TO THE CONVENTION FOR THE PROTECTION

OF THE MARINE ENVIRONMENT OF THE NORTH EAST ATLANTIC DECIDE
THAT

Definitions

1. For the purposes of this Decision, concrete installation means a

disused offshore installation constructed wholly or mainly of concrete;

disused offshore installation means an offshore installation, which is neither

a. serving the purpose of offshore activities for which it was

originally placed within the maritime area, nor
b. serving another legitimate purpose in the maritime area
authorized or regulated by the competent authority of the
relevant Contracting Party;
but does not include:
c. any part of an offshore installation which is located below the
surface of the sea-bed, or
d. any concrete anchor-base associated with a floating installation
which does not, and is not likely to, result in interference with
other legitimate uses of the sea;

relevant Contracting Party means the Contracting Party, which has

jurisdiction over the offshore installation in question;

67
 steel installation means a disused offshore installation, which is
constructed wholly or mainly of steel;
topsides means those parts of an entire offshore installation which are
not part of the substructure and includes modular support frames and
decks where their removal would not endanger the structural stability of
the substructure;

footings means those parts of a steel installation which:

(i) are below the highest point of the piles which connect the
installation to the sea-bed;
(ii) in the case of an installation built without piling, form the
foundation of the installation and contain amounts of cement
grouting similar to those found in footings as defined in sub-
paragraph 3(a); or
(iii) are so closely connected to the parts mentioned in
subparagraphs (i) and (ii) of this definition as to present major
engineering problems in severing them from those parts.

Programmes and Measures

2. The dumping, and the leaving wholly or partly in place, of disused

offshore installations within the maritime area is prohibited.

3. By way of derogation from paragraph 2, if the competent authority of the

relevant Contracting Party is satisfied that an assessment in accordance with
Annex 2 shows that there are significant reasons why an alternative disposal
mentioned below is preferable to re-use or recycling or final disposal on land, it
may issue a permit for
a. all or part of the footings of a steel installation in a category listed in
Annex 1, placed in the maritime area before 9 February 1999, to be
left in place;
b. a concrete installation in a category listed in Annex 1 or constituting a
concrete anchor base, to be dumped or left wholly or partly in place;
c. any other disused offshore installation to be dumped or left wholly or
partly in place, when exceptional and unforeseen circumstances
resulting from structural damage or deterioration, or from some other
cause presenting equivalent difficulties, can be demonstrated.

4. Before a decision is taken to issue a permit under paragraph 3, the

relevant Contracting Party shall first consult the other Contracting Parties in
accordance with Annex 3.

5. Any permit for a disused offshore installation to be dumped or

permanently left wholly or partly in place shall accord with the requirements of
Annex 4.

6. Contracting Parties shall report to the Commission by 31 December 1999,

and every 2 years thereafter, relevant information on the offshore installations

68
within their jurisdiction including, when appropriate, information on their disposal
for inclusion in the inventory to be maintained by the Commission.

7. In the light of experience in decommissioning offshore installations, in

particular those in categories listed in Annex 1, and in the light of relevant
research and exchange of information, the Commission shall endeavour to
achieve unanimous support for amendments to that Annex in order to reduce the
scope of possible derogations under paragraph 3. The preparation of such
amendments shall be considered by the Commission at its meeting in 2003 and
at regular intervals thereafter.

Entry into force

8. This Decision enters into force on 9 February 1999, and shall then replace
Decision 95/1 of the Oslo Commission concerning the Disposal of Offshore
Installations.

Implementation Reports

9. If any Contracting Party decides to issue a permit for a disused offshore

installation to be dumped or left wholly or partly in place within the maritime
area, it shall submit to the Commission at the time of the issue of the permit a
report in accordance with paragraph 3 of Annex 4.

10. If any disused offshore installation is dumped or left wholly or partly in

place within the maritime area, the relevant Contracting Party shall submit to the
Commission, within 6 months of the disposal, a report in accordance with
paragraph 4 of Annex 4.

69
 [ANNEX 1 to OSPAR Decision 98/3]

CATEGORIES OF DISUSED OFFSHORE INSTALLATION WHERE

DEROGATIONS MAY BE CONSIDERED

The following categories of disused offshore installations, excluding their

topsides, are identified for the purpose of paragraph 3:
a. steel installations weighing more than ten thousand tonnes in air;
b. gravity based concrete installations;
c. floating concrete installations;
d. any concrete anchor-base which results, or is likely to result, in
interference with other legitimate uses of the sea.

70
 [ANNEX 2 to OSPAR Decision 98/3]

FRAMEWORK FOR THE ASSESSMENT OF PROPOSALS FOR THE DISPOSAL

AT SEA OF DISUSED OFFSHORE INSTALLATIONS

General Provisions

1. This framework shall apply to the assessment, by the competent authority

of the relevant Contracting Party, of proposals for the issue of a permit under
paragraph 3 of this Decision.

2. The assessment shall consider the potential impacts of the proposed

disposal of the installation on the environment and on other legitimate uses of
the sea. The assessment shall also consider the practical availability of re-use,
recycling and disposal options for the decommissioning of the installation.

Information required

3. The assessment of a proposal for disposal at sea of a disused offshore

installation shall be based on descriptions of:
a. the characteristics of the installation, including the substances
contained within it; if the proposed disposal method includes the
removal of hazardous substances from the installation, the removal
process to be employed, and the results to be achieved, should also
be described; the description should indicate the form in which the
substances will be present and the extent to which they may escape
from the installation during, or after, the disposal;
b. the proposed disposal site: for example, the physical and chemical
nature of the sea-bed and water column and the biological
composition of their associated ecosystems; this information should
be included even if the proposal is to leave the installation wholly or
partly in place;
c. the proposed method and timing of the disposal.

4. The descriptions of the installation, the proposed disposal site and the
proposed disposal method should be sufficient to assess the impacts of the
proposed disposal, and how they would compare to the impacts of other options.

Assessment of disposal

5. The assessment of the proposal for disposal at sea of a disused offshore

installation shall follow the broad approach set out below.

6. The assessment shall cover not only the proposed disposal, but also the
practical availability and potential impacts of other options. The options to be
considered shall include:

71
 a. re-use of all or part of the installation;
b. recycling of all or part of the installation;
c. final disposal on land of all or part of the installation;
d. other options for disposal at sea.

Matters to be taken into account in assessing disposal options

7. The information collated in the assessment shall be sufficiently

comprehensive to enable a reasoned judgement on the practicability of each of
the disposal options, and to allow for an authoritative comparative evaluation. In
particular, the assessment shall demonstrate how the requirements of paragraph
3 of this Decision are met.

8. The assessment of the disposal options shall take into account, but need
not be restricted to:
a. technical and engineering aspects of the option, including re-use and
recycling and the impacts associated with cleaning, or removing
chemicals from, the installation while it is offshore;
b. the timing of the decommissioning;
c. safety considerations associated with removal and disposal, taking
into account methods for assessing health and safety at work;
d. impacts on the marine environment, including exposure of biota to
contaminants associated with the installation, other biological impacts
arising from physical effects, conflicts with the conservation of
species, with the protection of their habitats, or with mariculture, and
interference with other legitimate uses of the sea;
e. impacts on other environmental compartments, including emissions
to the atmosphere, leaching to groundwater, discharges to surface
fresh water and effects on the soil;
f. consumption of natural resources and energy associated with re-use
or recycling;
g. other consequences to the physical environment which may be
expected to result from the options;
h. impacts on amenities, the activities of communities and on future
uses of the environment; and
i. economic aspects.

9. In assessing the energy and raw material consumption, as well as any

discharges or emissions to the environmental compartments (air, land or water),
from the decommissioning process through to the re-use, recycling or final
disposal of the installation, the techniques developed for environmental life cycle
assessment may be useful and, if so, should be applied. In doing so,
internationally agreed principles for environmental life cycle assessments should
be followed.

72
10. The assessment shall take into account the inherent uncertainties
associated with each option, and shall be based upon conservative assumptions
about potential impacts. Cumulative effects from the disposal of installations in
the maritime area and existing stresses on the marine environment arising from
other human activities shall also be taken into account.

11. The assessment shall also consider what management measures might
be required to prevent or mitigate adverse consequences of the disposal at sea,
and shall indicate the scope and scale of any monitoring that would be required
after the disposal at sea.

Overall assessment

12. The assessment shall be sufficient to enable the competent authority of

the relevant Contracting Party to draw reasoned conclusions on whether or not
to issue a permit under paragraph 3 of this Decision and, if such a permit is
thought justified, on what conditions to attach to it. These conclusions shall be
recorded in a summary of the assessment which shall also contain a concise
summary of the facts which underpin the conclusions, including a description of
any significant expected or potential impacts from the disposal at sea of the
installation on the marine environment or its uses. The conclusions shall be
based on scientific principles and the summary shall enable the conclusions to be
linked back to the supporting evidence and arguments. Documentation shall
identify the origins of the data used, together with any relevant information on
the quality assurance of that data.

73
 [ANNEX 3 to OSPAR Decision 98/3]

CONSULTATION PROCEDURE

1. A relevant Contracting Party which is considering whether to issue a

permit under paragraph 3 of this Decision shall start this consultation procedure
at least 32 weeks before any planned date of a decision on that question by
sending to the Executive Secretary a notification containing:
a. an assessment prepared in accordance with Annex 2 to this Decision,
including the summary in accordance with paragraph 12 of that
Annex;
b. an explanation why the relevant Contracting Party considers that the
requirements of paragraph 3 of this Decision may be satisfied;
c. any further information necessary to enable other Contracting Parties
to consider the impacts and practical availability of options for re-use,
recycling and disposal.

2. The Executive Secretary shall immediately send copies of the notification

to all Contracting Parties.

3. If a Contracting Party wishes to object to, or comment on, the issue of the
permit, it shall inform the Contracting Party which is considering the issue of the
permit not later than the end of 16 weeks from the date on which the Executive
Secretary circulated the notification to the Contracting Parties, and shall send a
copy of the objection or comment to the Executive Secretary. Any objection
shall explain why the Contracting Party which is objecting considers that the case
put forward fails to satisfy the requirements of paragraph 3 of this Decision. That
explanation shall be supported by scientific and technical arguments. The
Executive Secretary shall circulate any objection or comment to the other
Contracting Parties.

4. Contracting Parties shall seek to resolve, by mutual consultations, any

objections made under the previous paragraph. As soon as possible after such
consultations, and in any event not later than the end of 22 weeks from the date
on which the Executive Secretary circulated the notification to the Contracting
Parties, the Contracting Party proposing to issue the permit shall inform the
Executive Secretary of the outcome of the consultations. The Executive
Secretary shall forward the information immediately to all other Contracting
Parties.

5. If such consultations do not resolve the objection, the Contracting Party

which objected may, with the support of at least two other Contracting Parties,
request the Executive Secretary to arrange a special consultative meeting to
discuss the objections raised. Such a request shall be made not later than the
end of 24 weeks from the date on which the Executive Secretary circulated the
notification to the Contracting Parties.

74
6. The Executive Secretary shall arrange for such a special consultative
meeting to be held within 6 weeks of the request for it, unless the Contracting
Party considering the issue of a permit agrees to an extension. The meeting
shall be open to all Contracting Parties, the operator of the installation in question
and all observers to the Commission. The meeting shall focus on the information
provided in accordance with paragraphs 1 and 3 and during the consultations
under paragraph 4. The chairman of the meeting shall be the Chairman of the
Commission or a person appointed by the Chairman of the Commission. Any
question about the arrangements for the meeting shall be resolved by the
chairman of the meeting.

7. The chairman of the meeting shall prepare a report of the views

expressed at the meeting and any conclusions reached. That report shall be sent
to all Contracting Parties within two weeks of the meeting.

8. The competent authority of the relevant Contracting Party may take a

decision to issue a permit at any time after:
a. the end of 16 weeks from the date of dispatch of the copies under
paragraph 2, if there are no objections at the end of that period;
b. the end of 22 weeks from the date of dispatch of the copies under
paragraph 2, if any objections have been settled by mutual
consultation under paragraph 4;
c. the end of 24 weeks from the date of dispatch of the copies under
paragraph 2, if there is no request for a special consultative meeting
under paragraph 5;
d. receiving the report of the special consultative meeting from the
chairman of that meeting.

9. Before making a decision with regard to any permit under paragraph 3 of

this Decision, the competent authority of the relevant Contracting Party shall
consider both the views and any conclusions recorded in the report of the special
consultative meeting, and any views expressed by Contracting Parties in the
course of this procedure.

10. Copies of all the documents which are to be sent to all Contracting Parties
in accordance with this procedure shall also be sent to those observers to the
Commission who have made a standing request for this to the Executive
Secretary.

75
 [ANNEX 4 to OSPAR Decision 98/3]

PERMIT CONDITIONS AND REPORTS

1. Every permit issued in accordance with paragraph 3 of this Decision shall

specify the terms and conditions under which the disposal at sea may take place,
and shall provide a framework for assessing and ensuring compliance.

2. In particular, every permit shall:

a. specify the procedures to be adopted for the disposal of the
installation;
b. require independent verification that the condition of the installation
before the disposal operation starts is consistent both with the terms
of the permit and with the information upon which the assessment of
the proposed disposal was based;
c. specify any management measures that are required to prevent or
mitigate adverse consequences of the disposal at sea;
d. require arrangements to be made, in accordance with any relevant
international guidance, for indicating the presence of the installation
on nautical charts, for advising mariners and appropriate hydrographic
services of the change in the status of the installation, for marking the
installation with any necessary aids to navigation and fisheries and for
the maintenance of any such aids;
e. require arrangements to be made for any necessary monitoring of the
condition of the installation, of the outcome of any management
measures and of the impact of its disposal on the marine environment
and for the publication of the results of such monitoring;
f. specify the responsibility for carrying out any management measures
and monitoring activities required and for publishing reports on the
results of any such monitoring;
g. specify the owner of the parts of the installation remaining in the
maritime area and the person liable for meeting claims for future
damage caused by those parts (if different from the owner) and the
arrangements under which such claims can be pursued against the
person liable.

3. Every report under paragraph 9 of this Decision shall set out:

a. the reasons for the decision to issue a permit under paragraph 3;
b. the extent to which the views recorded in the report of the special
consultative meeting under paragraph 7 of Annex 3 to this Decision,
or expressed by other Contracting Parties during the procedure under
that Annex, were accepted by the competent authority of the relevant
Contracting Party;
c. the permit issued.

76
4. Every report under paragraph 10 of this Decision shall set out:
a. the steps by which the disposal at sea was carried out;
b. any immediate consequences of the disposal at sea which have been
observed;
c. any further information available on how any management measures,
monitoring or publication required by the permit will be carried out.

77
 ANNEX C

THE CONTENTS OF A DECOMMISSIONING PROGRAMME

Presentation

The draft programme should be presented in a form that allows ready updating
and change. Each draft should be dated, pages should be numbered, and any
diagrams, charts etc should be annexed to the main text. The maximum use
should be made of tabular presentation. To reduce the burden on industry,
DECC invites companies to prepare drafts which are as short as possible,
consistent with providing information discussed below proportionate to the
project concerned.

Separate programmes should be prepared for pipelines and installations although

these can be contained within the same decommissioning document. This is
necessary because the Petroleum Act 1998 has the effect of requiring a
decommissioning programme in respect of each set of equipment which is the
subject of a section 29 notice or series of related section 29 notices. It should be
possible to identify the different programmes in order to isolate the liabilities of
the different groups of notice holders.

There is further guidance at the end of this Annex on how to structure combined
decommissioning documents.

The format and content of the draft programme should, where appropriate,
accord with the following guidance:

Format and Content

1. Introduction

A brief introductory paragraph indicating that the decommissioning programme is

being submitted for approval in accordance with the requirements of the
Petroleum Act 1998. It should also clearly indicate the companies that will be a
party to the programme and any differences in ownership status.

2. Executive Summary

A management summary outlining the background to the decommissioning

proposals and highlighting the essential features of the proposed method of
decommissioning.

3. Background Information

Relevant background information, supported by diagrams, including:

The relative layout of the facilities to be decommissioned

(installations, subsea equipment and pipelines).

78
 The relative location, type and status of any other adjacent facilities
(telephone cables, other pipelines and platforms etc) which would
have to be taken into consideration.

Information on prevailing weather, sea states, currents, seabed

conditions, water depths etc.

Any fishing, shipping and other commercial activity in the area.

Any other background information relevant to consideration of the

draft decommissioning programme.

4. Description of Items to be Decommissioned

A description, inclusive of diagrams, covering:

Installations

Support structures for fixed and floating installations (type, size,

arrangement and weights).

Topsides for fixed and floating installations (type, size, configuration,

equipment and weights).

A list of all wells (including subsea and satellite wells and whether
active, suspended or abandoned).

Subsea equipment on or in the seabed (size, weight, height above

seabed, whether piled or not, type of construction and material,
details of interaction between equipment and other uses of the sea,
e.g. fishing).

Offshore loading facilities.

Any other installed items.

Pipelines, flow lines and umbilicals

Lengths, diameters, type of construction.

The extent of burial, trenching and details of any concrete

mattresses, grout bags, rock-dump or other materials used to cover
the lines.

Details of any subsea facilities that form part of the pipelines (e.g.
PLEM, UTA, riser anchor bases).

The stability of the pipelines including details of any spanning or

exposure (survey data and history to support information given in this
section should be included as an annex to the programme).

79
 Details of interaction between any part of the pipelines and other
uses of the sea (e.g. fishing).

Materials on the Seabed

Drill cuttings (amount, composition, dimensions) or cross-reference

the drill cuttings section of the programme if appropriate.

Debris.

Any other materials.

In some cases there will be related equipment, usually within the same field, that
is not covered by the decommissioning programme. If appropriate this should be
listed here for clarity and an explanation given of why it is not part of the
programme. The requirement for this will vary with each case and will be
established during early discussions with DECC in stage 1 of programme
development.

5. Inventory of Materials

For all items described under 4 above, include an inventory listing the amount,
type and relative location of all materials including hydrocarbons, sludges, heavy
metals, sacrificial anodes and any radioactive material including LSA (Low
Specific Activity) scale. Where exact quantities cannot be verified, estimates
should be calculated.

6. Removal and Disposal Options

This section will provide a general description of the alternative removal and
disposal options for the items described in 4 above. It should include a short list
of options and the reasons for rejecting those not short-listed.

Re-use and Phasing

Particular consideration should be given to the possibility for re-use and the
potential for the beneficial phasing/integration of decommissioning activity
between operators, e.g. within a particular geographic area or specialist type of
work, in order to realise any economies of scale that are possible.

Comparative Assessment

If the programme relates to an installation for which the owners are seeking a
derogation under paragraph 3 of OSPAR Decision 98/3 then a detailed
comparative evaluation of the alternative disposal options must be included in
this section. The terms of the evaluation and the information to be included is
set out in Annex 2 to the OSPAR Decision. (See Annex B of these Guidance
Notes). In deciding whether a case has been made out for a derogation DECC
will judge the comparative assessment against the criteria and approach set out
in Annex A.

80
Similarly, a programme for pipelines, should also include a comparative
assessment. In order to arrive at the best decommissioning option, the
assessment should examine and compare each option on the basis of:
complexity and associated technical risk; risks to personnel; environmental
impact; effect on safety of navigation and other uses of the sea; and economics.
(See Section 10)

7. Selected Removal and Disposal Option

This section should describe the proposed decommissioning option. It should

include:

The removal and disposal option, describing the removal method and
the disposal route, recognising any potential transfrontier shipment of
waste issues.

An indication of how the principles of the waste hierarchy will be

met, including the extent to which the installation or any part of it,
including the topsides and the materials contained within it, will be re-
used, recycled or scrapped.

Details of any cleaning or removal of waste materials, including

cleaning methods; cleaning agents and disposal of residues.

A clear outline of how the disposal of any radioactive material,

including LSA scale, will be addressed. If appropriate this should
include an indication of whether the potential disposal route requires
authorisation under the Radioactive Substances Act 1993 and
whether the appropriate authorisation is already in place.

Details of any materials and remains on the seabed after

decommissioning.

Water clearances above any remains.

Predicted degradation, movement and stability of any remains.

8. Wells

The abandonment of wells is regulated under the model clauses incorporated in

individual licences. In addition, section 75 of the Energy Act 2008 gives the
Secretary of State power to require information and, specific action to be taken in
relation to well abandonment. This action includes the provision of financial
security for the purpose of ensuring that a person will be capable of plugging and
abandoning a well when required to do so by the terms of the licence. However,
long-term obligations in respect of abandoned wells will be subject to Part IV of
the Petroleum Act. The decommissioning programme should therefore contain:

A listing of all active, suspended and previously abandoned wells

relating to the installation. It should be possible from this list to

81
 identify each individual well. If this information is already included in
section 4 (description of items to be decommissioned) it does not
need to be repeated but can simply be cross referenced.

A summary of the methods used or proposed to be used to abandon

the wells. This requirement will be met by confirmation that
abandonment has been carried out in accordance with the Oil & Gas
UK Guidelines for the Suspension and Abandonment of Wells and that
a PON5 will be submitted in support of any works that are to be
carried out. Guidelines on well abandonment are available from
http://www.oilandgasuk.co.uk/ and further details regarding the PON5
process can be found at:
https://www.og.decc.gov.uk/regulation/pons/pon_05.htm.

9. Drill Cuttings

This section should describe actions taken to implement the requirements of

OSPAR Recommendation 2006/5 (see Section 11 and Annex I). If it has been
agreed that Stage 2 of the management regime set out in the Recommendation
is necessary and can be initiated at the time of decommissioning, the
programme should contain the outcomes including the required comparative
assessment, the conclusions from it and the proposed action to deal with the
cuttings pile. Where initial screening assessed the accumulations as below the
Stage 1 threshold, details regarding the cuttings pile should still be included in
the programme. This is particularly important where extrapolation of data for
other piles was the basis for the initial assessment. At the time of
decommissioning survey data should be presented to support the initial findings
and, where either threshold in Recommendation 2006/5 is exceeded, a
comparative assessment and proposed action to deal with the pile, in line with
Stage 2 of the Recommendations management regime, should be conducted.

10. Environmental Impact Assessment

This section should include an Environmental Impact Assessment (EIA) of the

selected decommissioning option. It should not be necessary to repeat
information that is presented elsewhere in the decommissioning programme but
an assessment of the potential effects of the project on the environment and
climate change must be undertaken and the measures envisaged to avoid,
reduce and, if possible remedy any significant adverse effects indicated. The EIA
should include the following:

All potential impacts on the marine environment, including exposure

of biota to contaminants associated with the installation, other
biological impacts arising from physical effects, conflicts with the
conservation of species, with the protection of their habitats, or with
mariculture, and interference with other legitimate uses of the sea.

All potential impacts on other environmental compartments,

including emissions to the atmosphere, leaching to groundwater,
discharges to surface fresh water and effects on the soil.

82
 Consumption of natural resources and energy associated with re-use
and recycling.

Other consequential effects on the physical environment which may

be expected to result from the option.

Potential impacts on amenities, the activities of communities and on

future uses of the environment.

EU Habitats and Birds Directive

It is expected that a properly conducted EIA would:

Identify any habitats or species listed in Annex I of the Habitats and

Birds Directives and covered by the Offshore Petroleum Activities
(Conservation of Habitats) Regulations 2001;

Determine the likely impacts on them of the decommissioning

activities and propose any suitable mitigation;

Propose an appropriate management system.

These findings should be included in the decommissioning programme as part of

the EIA and will provide the information for DECC as competent authority for the
Habitats Regulations offshore, to undertake an appropriate assessment if this is
required.

For proposed activities within 40 km of the coast the possibility of the

operations, or an accident or incident during the operations, impacting protected
coastal habitats and species must also be considered. The EIA must also identify
and address these risks and provide sufficient information to allow an appropriate
assessment to be prepared where necessary.

Within any assessment all future requirements to undertake post-

decommissioning surveys and potential remedial works must be clear. Where
these activities could impact protected habitats or species, this must be
addressed in the EIA and a further appropriate assessment may be required prior
to the post-decommissioning activities.

Further Natura 2000 sites, e.g. a Special Area of Conservation (SAC) or Special
Protection Areas (SPA), are likely to be identified and other conservation areas
may be designated in areas where at the time of decommissioning no known
sites were present. It is the responsibility of the Operator to ensure that all
future activities meet the requirements of the Regulations and they should
approach DECC prior to any activities being undertaken.

Where activities require formal environmental approval, e.g. a chemical or oil

discharge permit, there will normally be a recommended 28 day notification
period and a requirement to undertake an appropriate assessment could add
weeks to the approval process.

83
Use of Explosives

As part of the EIA it will be necessary to assess the potential impacts of the
use of any explosives on marine life in particular marine mammals. The use
of explosives can be permitted where this is shown to be the best practicable
environmental option. The impact assessment should include a description to
justify the necessity to use explosives including the alternatives which have
been considered; the potential impacts of the explosive use and the proposed
mitigation strategy. Suggestions for appropriate mitigation are included
within the JNCC Guidelines for minimising acoustic disturbance to marine
mammals whilst using explosives, available from the JNCC
(http://www.jncc.gov.uk/default.aspx?page=4900).

11. Interested Party Consultations

A description is required of the consultation process employed, including a

summary of the statutory consultations with interested parties and the extent to
which they have been taken into account in the programme. Relevant
correspondence should be annexed to the programme. In those cases where it
has been necessary to conduct a wide ranging public consultation/dialogue
process, including any informal consultations with OSPAR Contracting Parties,
details of the approach taken and the outcome of the process should be
included.

12. Costs

There should be an overall cost estimate in sterling of the preferred

decommissioning option and an indication of the basis on which the estimate is
made. The estimate should be broken down to reflect the activities in the Element
Level of the Oil & Gas UK Decommissioning Cost Estimating Guidelines. These
guidelines have been developed in workgroup 4 of the Brownfields
decommissioning initiative with the aim of establishing a common approach to
decommissioning costs. The guidelines are available on Oil & Gas UKs website
using the following link: http://www.oilandgasuk.co.uk/

If it is anticipated the decommissioning work will span a number of years,

expenditure should be split by year. In cases with more than one platform,
expenditure should be split by platform.

It is recognised that in some cases accurate cost data and confirmation of the
final decommissioning option are dependent on the outcome of a commercial
tendering process. Operators should discuss any sensitivities about cost data
with DECC.

13. Schedule

Details of the decommissioning time scale for the proposed option, including a
schedule showing the dates at which the various stages of the decommissioning
are expected to start and finish, should be included.

84
14. Project Management and Verification

Information on how the Operator will manage the implementation of the

decommissioning programme and provide verification to DECC concerning
progress and compliance. This should include a commitment to submit a report,
detailing how the programme was carried out, within four months of completion
of the decommissioning work, including debris clearance and post-
decommissioning surveys (see Section 13).

15. Debris Clearance

This section should include proposals for identification and removal of seabed
debris following decommissioning works. As a minimum the area covered for
debris clearance should include a 500m radius around any installation and a 200m
corridor along the length of any pipelines. Identification of debris would normally
be conducted by side scan sonar with an ROV deployed to investigate and
recover any potential hazards located. Following this work, verification of seabed
clearance by an independent organisation will normally be required. This
requirement will depend on the circumstances of the case and will be decided in
discussion with DECC.

16. Post-Decommissioning Monitoring and Maintenance

Proposals covering the post-decommissioning phase:

Seabed sampling surveys to monitor levels of hydrocarbons, heavy

metals and other contaminants in sediments and biota. There
should be a commitment to submit the results of surveys to DECC.
On completion of the last intended survey, the requirement for
further work will depend on the results and will be agreed in
discussion with DECC.

Inspection and maintenance where remains are to be left in place.

There should be a commitment to report the outcome of this work
to DECC. If a long-term schedule of inspection and maintenance is
not given, there should at least be a commitment to conduct further
work in response to the results of the initial inspection and in
consultation with DECC.

17. Supporting Studies

Where supporting studies have been undertaken they should be listed within the
programme and should be available to enquirers on request.

18. Structure of Combined Decommissioning Programmes

Where it has been agreed in discussion with DECC that it would be beneficial to
include more than one programme within a decommissioning document, it
should take account of the following:

85
 In the Introduction provide a clear statement that the document
contains a separate programme for each set of associated notices
served under section 29 of the Petroleum Act 1998.

The Introduction should identify the obligations associated with each

programme. The programmes should be listed indicating which
installations or pipelines are covered by each one and what
companies will be a party to which programme. To further identify
the obligations it is useful to include a table indicating which sections
and subsections of the document refer to each separate
programme.

Clear identification of costs and show which programme they refer

to.

The responsibility for any survey and monitoring requirements

should be clearly allocated to individual programmes or clearly
shared by all.

A timetable that shows the work for all programmes.

There is no need to duplicate sections. If a section contains information relating

to separate programmes, subsections can be used to highlight the allocation e.g.
costs. In most cases the need to include more than one programme in a
decommissioning document will arise in the context of pipelines. As indicated
above decommissioning proposals for pipelines should be contained within a
separate programme in order to be able to clearly identify the specific
decommissioning obligations that apply to the lines, which may have different
owners from the installations.

86
 ANNEX D

OTHER LEGISLATION, REGULATIONS AND CONTROLS

1. The following provides an indication of the legislation, in addition to the

Petroleum Act 1998 and the environmental regulations referenced in section 12,
that may apply to decommissioning activity. The table at the end of this Annex
summarises the activities involved and the permits or authorisations likely to be
required. The list is not intended to be exhaustive as individual cases will differ.
Operators should discuss their decommissioning proposals with the relevant
Departments and Agencies responsible for the legislation.

The Coast Protection Act 1949

2. This Act, as extended by the Continental Shelf Act 1964, contains

provisions for the safety of navigation. Before an installation or pipeline can be
placed on the UKCS the consent of the Secretary of State for Energy and Climate
Change is required under section 34, Part II of the Act. The standard form of
consent will normally be subject to the standard marking conditions. If variations
are proposed or required in a particular case, special conditions may be added. If
a facility falls into disuse there is a requirement for operators to take steps for
the purpose of preventing obstruction or danger to navigation as directed by the
Secretary of State. The satisfactory completion of a decommissioning
programme approved under the Petroleum Act 1998 should satisfy the
requirements of the Coast Protection Act.

Food and Environment Protection Act 1985

3. A licence is required, under Part II of the Food and Environment

Protection Act 1985 (FEPA) as amended, for the deposit of substances or articles
within United Kingdom Continental Shelf, either in the sea or under the seabed
unless exempt under the Deposits in the Sea (Exemptions) Order 1985.
Schedules 14, 15 and 16 specifically exempt many oil and gas exploration and
production activities as these are controlled by DECCs own legislation.

4. For the deposit of any substances or articles in respect of oil and gas
activities which are not exempt (such as deposits made in connection with
offshore decommissioning activity) a FEPA licence may be required. For the
waters adjacent to England and Wales, FEPA is administered by the Marine
Management Organisation (MMO) of the Department for Environment, Food and
Rural Affairs, and in waters adjacent to Northern Ireland by the Northern Ireland
Environment Agency of the Department of the Environment (Northern Ireland).
For such deposits in waters adjacent to Scotland, DECC is the responsible
licensing authority, except in relation to activities in certain controlled waters,
where the licensing authority is the Scottish Government Marine Scotland.
These controlled waters extend to 3 nautical miles from a defined coastal
baseline within the meaning of section 30A(1) of the Control of Pollution Act
1974.

87
The Environmental Permitting (England and Wales) Regulations 2007,
Pollution Prevention and Control Act 1999 and Waste Management
Licensing Regulations 1994,

5. In England and Wales, the Environmental Permitting (England and Wales)

Regulations 2007 (EPR) cover facilities previously regulated under the Pollution
Prevention and Control Regulations (PPC)_ and the Waste Management
Licensing Regulations 1994 (WML). PPC and WML continue to pertain to
Scotland.

6. EPR/PPC provide robust legislative systems to regulate industrial

processes involved in the treatment of certain prescribed wastes. These include
the metal processing industry, which may recover metallic items from a
decommissioning operation, and the incineration of wastes. Anyone carrying out
these processes must do so in compliance with an environmental
permit/authorisation that is designed to prevent pollution of the environment or
harm to human health. These are the responsibility of the Scottish Environment
Protection Agency (SEPA) in Scotland and the Environment Agency (EA) in
England and Wales.

7. EPR/WML are the main means by which the requirements of the EC

Framework Directive on Waste is transposed into domestic law. Anyone who
deposits, recovers or disposes of controlled waste must do so in compliance
with the conditions of an environmental permit/waste management licence, or
within the terms of an exemption from the need for a permit/licensing, and in a
way which does not cause pollution of the environment or harm to human
health.

8. The term controlled waste means household, commercial and industrial

waste. Whether or not a substance is waste must be determined on the facts of
the case, and advice should be sought from the Agencies. (Guidance on the
definition of waste is contained in DOE Circular 11/94 which is currently being
updated.)

9. In determining an application for a permit/licence, the Agencies must be

satisfied that the activities will not cause harm to human health or pollute the
environment and the site is managed by a fit and proper person.

The Environmental Protection Act 1990

10. In addition to the above, persons concerned with controlled waste are
under a duty of care, under the EPA1990, to ensure that the waste is managed
properly, recovered or disposed of safely, does not cause harm to human health
or pollution of the environment and is only transferred to someone who is
authorised to receive it. This duty applies to any person who produces, imports,
carries, keeps, treats or disposes of controlled waste or as a broker has control
of such waste. Breach of the duty of care is an offence, with a penalty of up to
5000 on summary conviction or an unlimited fine on conviction on indictment.
As part of DEFRAs simplification of the regulatory controls for handling,
transferring and transporting waste they are currently considering extending the

88
duty of care under the EPA to include those involved in transfrontier shipment of
waste.

11. The system for the registration of waste carriers is set up under the
Control of Pollution (Amendment) Act 1989 and the Controlled Waste
(Registration of Carriers and Seizure of Vehicles) Regulations 1991 (as amended).
Those who, in the course of their business or in any other way for profit,
transport controlled waste within Great Britain must register with the
Environment Agency as carriers of controlled waste.

Special Waste Regulations 1996 Special Waste Amendment (Scotland)

Regulations 2004 / Hazardous Waste (England and Wales) Regulations 2005

12. Depending on its nature and composition waste may be defined as

special waste (in Scotland) / hazardous waste (in England and Wales) within the
UK. Special/hazardous wastes are those that are potentially the most difficult
and dangerous and listed on the European Unions Hazardous Waste List. The
Regulations require all movement of special/hazardous waste to be tracked by
way of a consignment note system.

Transfrontier Shipment of Waste Regulations 2007

13. The international movement of waste is controlled by means of Council

Regulation No 1013/2006/EC on shipments of waste (the WSR). The
Transfrontier Shipment of Waste Regulations 2007 gives effect to certain
aspects of the WSR into UK law, nominate the competent authorities for the UK
and provide them with their respective enforcement powers. The UK Plan for
Shipments of Waste sets out Government policy on shipments for disposal. The
Regulations are enforced by the EA (England and Wales), SEPA (Scotland) and NI
Environment Agency (Northern Ireland). The regulations apply to
decommissioned offshore installations. The Secretary of State is the competent
authority for the offshore area. Operators should consult the appropriate Agency
when considering decommissioning activities that involve transboundary
movements of waste.

Radioactive Substances Act 1993

14. Anyone who receives radioactive sources or radioactive waste for

disposal is subject to the requirements of the Radioactive Substances Act 1993
(RSA 93). Under this Act they must have an authorisation from the appropriate
regulatory body (EA in England & Wales; SEPA in Scotland) for the accumulation,
storage or disposal of radioactive waste or be able to demonstrate compliance
with the conditions contained in specific exemption orders. The Act does apply
to offshore installations and the preparation of a decommissioning programme
should identify whether the selected disposal route requires such an
authorisation and that the selected facility has one. It is likely that new disposal
routes will require an application for authorisations.

89
Transfrontier Shipment of Radioactive Waste and Spent Fuel Regulations
2008

15. The Transfrontier Shipment of Radioactive Waste and Spent Fuel

Regulations 2008 (TFSRWR 2008) transpose Council Directive 2006/117/Euratom
on the supervision and control of shipments of radioactive waste and spent fuel.
TFSRWR 2008 make it an offence to ship radioactive waste or spent fuel into or
out of the UK unless authorised by the appropriate authority. The new
regulations came into force on 25 December 2008 and are administered by the
EA in England and Wales, SEPA in Scotland and the Chief Inspector in Northern
Ireland. They replace and revoke the previous UK regulatory regime (The
Transfrontier Shipment of Radioactive Waste Regulations 1993) and some
transfers of radioactive waste across international boundaries which were
previously regulated are now exempted. TFSRWR 2008 do not apply to the
shipment of naturally occurring radioactive material (NORM) or the shipment of
disused sources to a supplier or manufacturer of radioactive sources or to a
recognised installation. For the purposes of the regulations a disused source
means a sealed source which is no longer used or intended to be used for the
practice for which authorisation was granted and a recognised installation means
a facility located in the territory of the country authorised by the competent
authorities of that country for the long-term storage or disposal of sealed sources
or an installation authorised for the interim storage of sealed sources.

Dangerous Substances in Harbour Areas Regulations 1987

16. The carriage, loading, unloading and storage of all classes of dangerous
substances in port areas are controlled under the Dangerous Substances in
Harbour Areas Regulations 1987 (and amendments) and the Waste Management
Licensing Regulations 1994.

Water Resources Act 1991 and Water Environment and Water Services
(Scotland) Act 2003

17. Underpinning these instructions, it is an offence in England and Wales

under the Water Resources Act 1991 to cause or knowingly permit any
poisonous noxious or polluting matter to enter any "controlled" waters. In
Scotland, the Water Environment and Water Services (Scotland) Act 2003
(WEWS), introduces regulatory controls over activities in order to protect and
improve Scotlands water environment. It is an offence for a person to carry on,
or cause or permit others to carry on, any controlled activity unless authorised by
the Controlled Activity Regulations 2005 (as amended). Controlled waters
extend to three miles from a defined baseline in England and Wales, as detailed
in the Water Resources Act 1991. Coastal waters extend to three miles from a
defined baseline in Scotland, as detailed in the WEWS. Other named activities
under Crown control are outlined in the Continental Shelf Act 1964.

Health and Safety at Work etc Act 1974

18. Where installations, pipelines and/or waste are brought onshore for
disposal, the operations will be subject to the provisions of the Health and Safety

90
at Work etc Act 1974 and appropriate regulations made under that Act. Further
details can be obtained from the Health and Safety Executive (HSE).

19. HSEs role in decommissioning stems from the Offshore Safety Act 1992
which extends the application of Part I of the Health and Safety at Work etc Act
1974 to include offshore health and safety. It also allows offshore regulations to
be made. Offshore regulations include specific requirements to secure the safe
decommissioning and dismantlement of offshore installations and pipelines.

20. The Offshore Installations (Safety Case) Regulations 2005 (OSCR2005)

came into force in April 2006, replacing the 1992 Safety Case Regulations. The
new regulations require acceptance by HSE of a safety case for the
dismantlement of a fixed installation. OSCR2005 are aimed at simplifying
procedures as well as bringing OSCR more in line with other supporting offshore
legislation. The new regulations can be found on the OPSI website at:
http://www.opsi.gov.uk/si/si2005/20053117.htm

21. OSCR2005 requires a safety case to be submitted at least 3 months

before the commencement of dismantling. In accepting a safety case under
OSCR2005, HSE will wish to be satisfied that there is an effective safety
management system (SMS) in place. The SMS should ensure that hazards with
potential to cause a major accident are identified, that risks are adequately
controlled and that the organisational arrangements in place will enable the duty
holder to comply with relevant statutory provisions. The rigorousness of the
SMS will be especially significant during decommissioning in order to cater for
factors such as reduced personnel on board or contractor personnel new to the
installation.

22. A range of other statutory health and safety provisions will apply during
decommissioning, including regulation 10 of the Offshore Installations and Wells
(Design and Construction, etc) Regulations 1996 which requires the
decommissioning and dismantlement of an installation to be done safely so as to
maintain its integrity during work activities.

23. The Pipelines Safety Regulations 1996 contain requirements that

pipelines are decommissioned safely either by dismantlement and removal or by
being left in a safe condition, and for notification of decommissioning works at
least 3 months prior to commencement.

24. Inspectors from HSEs Hazardous Installations Directorate (Offshore

Division) enforce offshore health and safety legislation. Pipelines safety
legislation is enforced by HSEs Hazardous Installations Directorate (Specialised
Industries Division). Application of the Health and Safety at Work etc Act 1974,
and the regulations made under the Act, to any activities associated with
decommissioning which are carried out onshore would most likely be dealt with
by inspectors from HSEs Field Operations Division.

25. All works at a well are subject to the general requirements of the Health
and Safety at Work Act etc 1974. In addition, there are specific regulatory
requirements which apply to wells and well integrity. Wells connected to an

91
installation form part of that installation, and the content of the safety case must
include particulars of the plant and arrangements for the control of operations on
a well, including control of pressure and the prevention of the release of
hazardous substances. Operations to re-enter and abandon wells using a mobile
installation or vessel must be notified to HSE 21 days in advance. Duties set out
in the Offshore Installations and Wells (Design and Construction etc) Regulations
1996 also cover the abandonment of wells. These require that wells are
suspended and abandoned in a way that ensures there can be no unplanned
escape of fluids from a well and that the risks to the health and safety of persons
from the well, anything in it, or the strata to which it is connected, are as low as
reasonably practicable.

Export Controls

26. The export of oil and gas installations for re-use outside of the UKCS may
be subject to United Kingdom export controls. The Export Control Directorate of
the Department for Business, Innovation and Skills (BIS) is the competent
authority in this matter.

27. An export licence is unlikely to be required unless the goods are listed in
Schedule 1 to the Export of Goods, Transfer of Technology and Provision of
Technical Assistance (Control) Order 2003 (EGTTPTA(C)O 2003, as amended:
Part I (UK Military List) and Part II (UK Explosive Related List) or there are any
goods on the platform that could be considered to be dual-use as defined in
Schedule 2 to the 2003 Order (UK Dual-Use List) or in Council Regulation (EC)
No. 1334/2000, as amended (EU Dual-Use List).

28. A number of Open General Export Licences (OGELs) are also issued and
may be applicable as they cover various goods and destinations. OGELs are valid
for any exporter to use providing they can satisfy the conditions and restrictions
as specified on each licence.

29. BIS Export Control Directorate website

http://www.bis.gov.uk/exportcontrol provides information relating to the lists of
items considered to be subject to control (dual-use and military) and other
general information on export controls including copies of all current Open
General Export Licences.

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SUMMARY OF MAIN ACTIVITIES REQUIRING APPROVAL:

ACTIVITY AUTHORITY PERMIT/CONSENT REMARKS

Cessation of DECC Handled through

Production Field Reports and
separate COP
Document

Venting/Flaring DECC Venting/Flaring

consent under the
Energy Act 1976

Safety case HSE Acceptance under the OSCR2005 came

Offshore Installations into force in April
(Safety Case) 2006
Regulations 2005

Well DECC, HSE PON5 See DECCs Oil &

abandonment Gas Website

Cleaning, DECC, EA/SEPA PON15D, PON15C See DECCs Oil &

discharges, (depending on and/or PON15E Gas Website
emissions location) (Chemicals)

Permit under the

OPPC Regs 2005 (Oil)

Note:decommissioning
activity may be
covered by existing
operational permits

Oil Spill Planning DECC Oil Pollution Decommissioning

Emergency Plan may be
required under incorporated into
Merchant Shipping (Oil existing field
Pollution OPEP
Preparedness,
Response and
Cooperation
Convention)
Regulations 1998

Explosives use DECC Assessment under Agree with DECC

Habitats Regulations and apply JNCC
(as amended) 2001 Guidelines

93
ACTIVITY AUTHORITY CONSENT/PERMIT REMARKS

Seabed DECC, DEFRA, Licence under FEPA Deposits on

deposits Devolved Authorities 1985 decommissioned
(depending on location) pipelines subject
DEPCON under to FEPA.
Pipeline Works Deposits on
Authorisation pipelines held
under IPR likely
to be via
DEPCON.

Waste EA/SEPA Duty of care under Proposals should

Handling Environmental be discussed at
Protection Act 1990 an early stage
with the relevant
Licence under Agency
Waste
Management
Licensing
Regulations
1994/Environmental
Permit issued under
Environmental
Permitting (England
and Wales)
Regulations 2007

Notification under
Special Waste
Regulations 1996
and Special Waste
Amendment
(Scotland)
Regulations 2004 /
Hazardous Waste
(England and
Wales) Regulations
2005

Authorisation under
Radioactive
Substances Act
1993

94
ACTIVITY AUTHORITY CONSENT/PERMIT REMARKS

Waste EA/SEPA Authorisation under Authorisation

Shipment the Transfrontier also required
(into and out Shipment of Waste from the
of the EU) Regulations 2007 receiving
country.
Authorisation
also for any
waste being
returned to the
country of origin.

Marine DECC,DfT,Hydrog,HSE, Various notifications Discuss with

activities MCA, SFF, NFFO required for diving relevant
activities, vessel Departments,
use, towing Agencies or
activities etc Bodies
Safety Zones HSE, Hydrog, DfT Notification upon Under Petroleum
removal of facilities Act 1987, SZ will
automatically
cease if
installation no
longer projects
above the
surface of the
sea. SZs made
by statutory
order will remain
unless removed
by order.
Equipment HM Revenue & Duties and VAT Discuss with
and materials Customs may apply to certain HMRC
brought items
ashore

95
ACTIVITY AUTHORITY CONSENT/PERMIT REMARKS
Export of BIS An export licence Consult BIS
installations may be required in Export Control
and certain Directorate
equipment circumstances under
the Export of Goods,
Transfer of
Technology and
Provision of
Technical Assistance
(Control) Order 2003

A certificate may be If the coral,

Export and DEFRA Lophelia pertusa,
required under the
import Convention on is present on an
International Trade in installation
Endangered Species located outside of
(CITES) territorial waters
that is being
transported to
the UK or
elsewhere, a
CITES certificate
will be required
from Defra.

96
 ANNEX E

ROLE OF OTHER GOVERNMENT DEPARTMENTS

Department for Environment, Food and Rural Affairs (Defra)

1. Defra is responsible for co-ordinating Government policy on the marine

environment. It therefore has an interest in all general questions which arise in
respect of offshore oil and gas activity and the marine environment. Defra is also
responsible for Government policy on waste and sponsors the Environment
Agency. Defra is specifically responsible for the development and
implementation of domestic and international policies to protect fisheries and the
marine environment from the deposit of waste and other materials at sea. Defra
leads for the UK on the global London Convention 1972 which deals with
dumping at sea and also leads for the UK on the OSPAR Convention for the
protection of the North East Atlantic which not only covers dumping issues but
also the prevention and elimination of pollution from offshore installations. An
extensive programme of aquatic environmental monitoring is carried out on
behalf of the Department.

2. Defra is responsible for the Food and Environment Protection Act (Part II)
1985 (FEPA) as amended. Part II of the Act covers the deposit of substances or
articles in the sea or under the seabed within UK waters or UK controlled waters.
Anyone wishing to undertake activities involving the deposit of materials at sea,
in waters adjacent to England and Wales, is advised to check the following web
page http://www.marinemanagement.org.uk/environment/index.htm to confirm if
a licence is required or if the activities are exempt under the Deposits in the Sea
(Exemptions) Order 1985 and covered by legislation. In assessing whether a
licence can be issued under FEPA, Defra will consider whether the deposits will
adversely affect the marine environment, the living resources which it supports
or human health. Regard is also taken of operations which may interfere with
legitimate uses of the sea and to the practical availability of alternative methods
of dealing with any waste material it is proposed to dispose of at sea.

The Scottish Government Marine Scotland (SG-MS)

3. SG-MS, which has a similar role to Defra, is responsible, as licensing

authority in Scotland, for issuing licences under Part II of the Food and
Environment Protection Act 1985 as amended, for all disposal activities, except
after 1 July 1999, those relating to oil and gas exploration and exploitation and
operations falling within the subject matter of Part VI of the Merchant Shipping
Act 1995. Anyone wishing to undertake activities involving the deposits of
substances or articles at sea in waters adjacent to Scotland is advised to check
with SG-MS which undertakes the licensing function on behalf of the Scottish
Ministers. SG-MS will confirm if a licence is required or if the activities are
exempt under the Deposits in the Sea (Exemptions) Order 1985 (as amended).

4. Section D2 of Schedule 5 to the Scotland Act 1998 reserves oil and gas
exploration and exploitation to Westminster including, in this regard, the subject

97
matter of Part II of FEPA, but only in relation to activities outside controlled
waters (within the meaning of section 30A(1) of the Control of Pollution Act
1974). Ministers have agreed that the licensing authority for such activities will
be DECC.

5. SG-MS, also conducts an extensive marine environment monitoring

programme in waters adjacent to Scotland.

Department for Transport (DfT)

6. The Ports Division of DfT is concerned with ensuring safety of navigation

and DECC on their behalf regulates the placing of offshore installations and
pipelines to this end. Consent is required for placing on the UK Continental Shelf
installations which may obstruct or endanger navigation.

Maritime and Coastguard Agency (MCA)

7. The MCA is responsible for implementing the Governments strategy for

marine safety and the prevention of pollution from ships, as developed by DfTs
Shipping and Ports Directorate in consultation with the Agency. The overall aim
of the MCA is to develop, promote and enforce high standards of marine safety
and to minimise the risk of pollution of the marine environment from ships. Prior
to granting consent for the placing of offshore installations and other works in
tidal waters, DfTs Ports Division consult the MCA for their views on the impact
of such activities on navigational safety.

8. The Agency is also responsible for the management of the Governments

Civil Hydrographic Programme and works closely with the Royal Navy, the
Ministry of Defence and the UK Hydrographic Office.

Department of the Environment for Northern Ireland (DOE NI)

9. The Industrial Pollution and Radiochemical Inspectorate (IPRI) is part of

the Northern Ireland Environment Agency, and is responsible for the
enforcement of the Industrial Pollution Control (NI) Order 1997 the Pollution
Prevention and Control Regulations (NI) 2003 and the Radioactive Substances
Act 1993.

10. DOE NI is also responsible for co-ordinating policy within Northern Ireland
in respect of pollution of the marine environment and complying with the
requirements of the OSPAR Convention and other international obligations.

The Joint Nature Conservation Committee (JNCC), Natural England (NE),

Scottish Natural Heritage (SNH), the Countryside Council for Wales (CCW)
and the Council for Nature Conservation and the Countryside (CNCC)

11. The JNCC has expertise for providing nature conservation advice on
matters relating to the offshore oil and gas industry and is the primary point of
contact for nature conservation advice on decommissioning programmes. NE,
SNH, CCW and CNCC are responsible for providing similar advice on

98
decommissioning programmes within 12 miles of shore or on projects that have
the potential to impact their respective coastal areas.

Scottish Environment Protection Agency (SEPA)

12. SEPA is responsible for the enforcement of pollution legislation in

Scotland. This legislation regulates: discharges from prescribed processes under
Part I of the Environment Protection Act 1990 (EPA 1990), to be progressively
replaced by the requirements of the Pollution Prevention and Control Act 1999
(PPC 1999); the regulation of waste management regime under Part II of EPA
1990 and the waste management activities prescribed under PPC 1999; the
keeping and use of radioactive materials and the disposal and accumulation of
radioactive waste under the Radioactive Substances Act 1993; and the licensing
of a controlled activity in accordance with the Water Environment (Controlled
Activities) (Scotland) Regulations 2005 (to protect the water environment). The
Radioactive Substances Act 1993 applies to installations operating in Scottish
waters and the associated infrastructure. SEPA was created by the Environment
Act 1995.

The Environment Agency (EA)

13. The EA regulates a range of activities including those carried out under
the Environment Permitting (England and Wales) Regulations 2007 which covers
facilities previously regulated under the Pollution Prevention and Control
Regulations and the Waste Management Licensing Regulations 1994. Amongst
many other things, the EA is also responsible for water protection; managing
hazardous wastes; the export of wastes and the use, accumulation and disposal
of radioactive materials.

Health and Safety Executive (HSE)

14. HSEs role in decommissioning stems from the Offshore Safety Act 1992
which extends the application of Part I of the Health and Safety at Work etc Act
1974 to include offshore health and safety. It also allows offshore regulations to
be made. Offshore regulations include specific requirements to secure the safe
dismantling, removal and disposal of offshore installations and pipelines. HSEs
role in the decommissioning process and the key health and safety legislation
applying is described in Annex D to this guidance. Health and safety legislation
will continue to apply to any installations left in situ after decommissioning. In
particular, duty holders will need to ensure the integrity of the installation and the
safety of personnel working on it. It should be noted that the duty holder under
offshore health and safety legislation may not be the same as those parties with
the duty to carry out a decommissioning programme under the Petroleum Act
1998.

15. The Pipelines Safety Regulations 1996 contains requirements for the safe
decommissioning of, and notification to, HSE at least 3 months prior to
commencement of pipeline decommissioning works.

99
16. Activities associated with decommissioning which are carried out onshore
will be subject to the provisions of the Health and Safety at Work etc Act 1974
and appropriate regulations made under that Act.

Ministry of Defence (MOD)

17. The MODs UK Hydrographic Office is responsible for maintaining

Admiralty Charts on which installations and pipelines are marked. The charts are
supported by a range of Notices to Mariners, in both written and other media.
Consents from DfT will specify that Notices are issued at the Operator's expense
where activity at an installation has implications for navigation around it.

18. The MODs Directorate of Safety, Environment and Fire Policy is

concerned with the impact of decommissioning on defence operations.

HM Treasury/HM Revenue & Customs

19. HM Treasury and HM Revenue & Customs have an interest in the

efficient use of resources in decommissioning and in the impact and yield of
North Sea taxation.

The Crown Estate

20. The Crown Estate Commissioners have statutory responsibility for

management of the Crown's proprietary interests offshore; these include nearly
all of the UK seabed to the territorial limit (12 miles) and exploitation rights on the
Continental Shelf (excluding hydrocarbons) under the Continental Shelf Act 1964.

21. The rights to oil and gas underneath the territorial sea and the UK
Continental Shelf are vested in the Crown under the Petroleum Act 1998 and are
managed by DECC. However, The Crown Estates consent as landowner is
required for all oil and gas pipelines that cross the seabed within 12 nautical
miles of the UK coastline. This includes the granting of a lease under which a
rental payment will apply based on the size of the pipeline. Notice terminating
the rent may be given by the operating company upon completion of
decommissioning works.

100
 ANNEX F

DECOMMISSIONING LIABILITIES

Introduction

1. This annex sets out DECC's policy for ensuring that the costs associated
with decommissioning offshore oil and gas installations and pipelines on the UK
Continental Shelf (UKCS) are met by the companies which own them, or have
had an interest in them or in the relevant licences since the serving of the first
notice for the facilities.

Guiding Principles

2. In recent years there has been significant trading of UKCS oil and gas
assets from large companies to smaller ones. Ministers welcome this
development as they have agreed that entrepreneurial activity on the UKCS
should be encouraged and that a free trade in mature offshore oil and gas assets
and reduced cost burden can help to extend field life and maximise economic
recovery. However, at the same time Government has a responsibility to ensure
that the taxpayer is not exposed to the risk of default in meeting the costs
associated with decommissioning, which could be substantial. The two aims
must be carefully balanced.

3. The risk to the Government is that, in relation to any particular field, the
participating companies at the time of decommissioning will not have sufficient
assets to pay for the work. Or that, although such companies have access to
sufficient assets, those assets are outside UK jurisdiction and the powers of
enforcement available under the Petroleum Act 1998 (the Act) may not be
exercisable so as to ensure that the companies comply with their obligations. In
such cases the UK's international obligations might mean that the Government
would consider itself obliged to arrange for decommissioning and the cost may
then fall on the taxpayer.

4. The mechanism by which the Government balances taxpayer protection

and increasing UKCS productivity through licence trading is by the serving and
withdrawal of notices under sections 29 and 31(5) of the Act.

Legislative Background

5. Notices under section 29 of the Act may be served on those persons with
any interest of a kind set out in section 30(1) of the Act in respect of each
individual offshore installation on the UKCS, and in respect of section 30(2) of the
Act in respect of each individual offshore pipeline. These section 29 notices
require the recipient to submit a decommissioning programme at such time as
the Secretary of State may call for it.

101
6. Withdrawal of a section 29 notice may be granted under section 31(5) of
the Act. It should be noted that such a withdrawal is granted at the discretion of
the Secretary of State. The circumstances under which withdrawal is considered
are detailed below.

7. Further information regarding the serving of notices setting a

decommissioning obligation is available in section 3 of this guidance.

Calculation of Risk and Consideration of Section 29 Notice Release

8. When the Licensing Section of DECCs Licensing Exploration and

Development Unit agree to an assignment of interests in a licence affecting an
approved field, we will serve notices under section 29 of the Act on the buyer (if
they do not already have such a notice). We then consider whether the
Secretary of State should exercise his discretion under section 31(5), and
withdraw the section 29 notice(s) from the selling party.

9. The following assessment is used to calculate the risk associated with the
group of section 29 notice holders and whether or not it would be appropriate to
withdraw the notice from a selling company. It is also used to review the risk of
all section 29 groups on a periodic basis (every 3 to 4 months). It is appropriate
that there is an up to date assessment of the overall risk to the taxpayer.
Periodic review ensures that updated company accounts and wider changes in a
companys and their groups portfolio of assets are taken into account and where
necessary mitigation measures instigated. During these reviews particular
attention is also given to exited companies that have sold their interest in an
asset and not had their section 29 withdrawn to determine if the decision
remains appropriate. DECC aims to withdraw as many notices as possible in
light of the level of risk.

10. Where a company has requested withdrawal of their section 29 notice

following the transfer of their interests in a field, they will be informed whether
the Secretary of State will exercise his discretion to withdraw. Where the notice
has not been withdrawn at that stage but a periodic review of the risk
assessment indicates withdrawal is now appropriate, the relevant companies will
be informed. In addition, DECC is always willing to take account of new
information or material changes that impact the risk assessment for specific
section 29 groups. Companies should contact the Offshore Decommissioning
Unit to discuss any relevant updates to their cases. The assessment process is
treated as confidential and will only be discussed with the companies concerned.

11. The assessment process is a relatively simple instrument used to assess

the risk of all section 29 groups and the mechanistic tests are not the end of the
process. Where necessary DECC will review the companys finances in more
detail and take account of the prospects for revenues from the relevant fields. In
addition, where factors, such as a sudden change in company status, have a
material effect on the risk, a detailed review of all the relevant cases will be
undertaken. This may alter the initial risk assessment and the resultant need for
mitigation measures.

102
12. The following flowchart outlines the assessment process prior to a more
detailed explanation of the steps involved. Examples of how the assessment is
used are given at the end of this Annex.

103
 Collate cost data for project and net worth of
Step 1 section 29 holders and incoming company/group

Test 1: project Test 2: company Test 3: Test 4: corporate

decom costs share of project company UKCS group UKCS
decom costs decom liability decom liability
against net against net against net
worth worth worth

Step 2 Allocate risk classification to each

company/group

Class 1 Class 2 Class 3 Class 4

0-30% 31-50% 51-70% >71%

Step 3 Assess section 29 group risk

Low Medium High

e.g. company with e.g. company with If low or medium
>35% interest class 1 >35% interest class 2 classification not
for test 2+3 or all for test 2+3 or all justified
companies class 2 for companies class 3 for
test 2+3 test 2+3

Withdrawal Withdrawal Do not

Step 4
probable if probable if withdraw*
costs costs
<100m* <25m*

No Consider whether
mitigation risk mitigation Yes
or further No appropriate
Step 5 mitigation

Consider if
further mitigation Serve on associated
Yes
appropriate companies if such action
assists risk mitigation
Consider whether
financial security required *subject to qualifying factors
104
see paragraph 21 of Annex F
Step 1 - Tests

13. Collate data on: the costs of decommissioning the project; each
companys share of the project decommissioning costs and their total UKCS
liability; the companys corporate group UKCS liability, taking account of the
interests held by all the groups subsidiary companies; and the net worth
(shareholder funds/equity minus intangibles) of both the company and their
corporate group. Run the following four tests for all current notice holders and
any incoming company.

Test 1: Note project decommissioning costs

Test 2: Compare company share of project decommissioning costs against its

net worth

Test 3: Compare company share of UKCS decommissioning costs against its net
worth

Test 4: Compare corporate groups share of UKCS decommissioning costs

against the group net worth

14. Good quality estimates of decommissioning costs are important when

running the above tests. DECC will consider any estimates available from the
company concerned and compare these with estimates it holds which were
provided by independent third party consultants. We are likely to estimate the
costs for large concrete structures on a left in place basis as OSPAR
derogations have already been given for such structures. The costs for large
steel installations which are candidates for OSPAR derogation will be estimated
in the light of the timescale, the possibilities of technical advances and the more
limited experience of derogation. We are willing to discuss our cost estimates
for individual facilities with the owners and if we consider it appropriate amend
the costs used in the risk assessment. We do not release detailed figures
publicly. Guidance on estimating decommissioning costs has been developed
through the Pilot Brownfields Initiative. This is available from the Oil & Gas UK
website (www.oilandgasuk.co.uk). Net worth data is taken from the companys
published balance sheet.

Step 2 Company Risk Classification

15. Using the following table, allocate a risk classification to each company for
tests 2 and 3 and a classification for each corporate group for test 4.

Class 1 Class 2 Class 3 Class 4

0-30% 31-50% 51-70% 71%+
Company can Funds are Company should Company would
easily afford costs adequate to meet be able to meet have considerable
costs costs but may difficulty meeting
have some costs
difficulty

105
16. The primary financial measure used for assessing a company's
capacity to meet its share of the decommissioning costs associated with a
licence interest is a comparison of the liability against net worth. The
question is, if the decommissioning liability should crystallise today could the
company, or any corporate group to which it belongs, meet its share of those
costs? If the expected decommissioning costs associated with the licence a
company is seeking to acquire ranges between 1% - 50% of the net worth of
the company or of the corporate group to which it belongs, we would
consider that there are adequate resources to meet those costs when they
crystallise. If the potential liability ranges between 51% - 70% of net worth
we would consider that the company/group should be able to meet the costs
but may have some difficulty in doing so. If the liability exceeds 70% of
shareholders funds we would consider that the company/group would have
considerable difficulty in meeting the decommissioning. If the initial
assessment outlined above indicates the company may have difficulty
meeting its obligations, we review the company's/group's accounts, taking
note of significant cash balances, liquidity, gearing, capacity to borrow,
existing but under-utilised lines of credit, shareholder's guarantees,
undertakings etc. We may look at prospects for future revenues from the
relevant fields and will always discuss the assessment with the company if it
wishes to do so. We will not disclose our assessment outside DECC or the
company concerned without its permission.
Step 3 Section 29 Group Risk Classification

17. Once a classification has been assigned to each current section 29 notice
holder and any incoming party it is possible to assess the risk of the group of
notice-holders as a whole, i.e. the section 29 group risk. This should be
calculated both with and without the presence of any outgoing party to consider
the impact of withdrawing their notice.

18. Whether a section 29 group is low, medium or high risk will depend on
the balance of class 1, 2 and 3 companies. The classification assumes
companies are registered in the UK. If a company is not UK registered it may be
discounted when determining the group classification. For example:

Low risk section 29 groups: If there is a company with a relatively high

percentage interest in the field, say above 35%, that is class 1 for test 2
and 3, as they can easily afford both their share of the decommissioning
costs of the project and their wider UKCS costs, we are likely to conclude
that the section 29 group is low risk. Alternatively if all companies
involved are class 2 for tests 2 and 3, as their funds are still considered
adequate the section 29 group could be given a low risk allocation.

Medium risk section 29 groups: Similar to low risk, if there is a company

with a relatively high percentage interest that is class 2 for test 2 and 3 or
if all companies are class 3 for tests 2 and 3 we are likely to conclude that
the section 29 group is medium risk. Class 2 companies have adequate
resources to meet the costs. Although class 3 companies should also

106
 have adequate funds they may have some difficultly. It is therefore only
possible to allocate the section 29 group a medium risk based on class 3
companies as on balance, if all companies are at least of this rating,
overall there should be sufficient assets within the section 29 group.

High risk section 29 groups: If a low or medium risk classification is not

justified, by default the section 29 group will be high risk.

19. In addition to the above examples the strength of the corporate groups of
the companies will be considered, test 4. The involvement of one or more
corporate group with significant resources may be sufficient to allocate a lower
risk classification to the section 29 group.

Step 4: Consider Whether to Withdraw Notice

20. Once a section 29 group risk classification has been calculated, the
following guidelines are used to indicate whether to withdraw a section 29 notice
from an exiting party. These guidelines are indicative and the Secretary of State
reserves the discretionary nature of his withdrawal powers. Where DECC judges
that the remaining group of section 29 notice holders would be weakened to an
unacceptable extent by the departure of a company from it, the Secretary of
State will not exercise his discretion to withdraw the notice given under section
29 of the Act from the selling party.

Section 29 Group Risk Withdraw? Notes

High Do not withdraw

Medium Withdrawal probable if If all current Section 29

costs are 25m holders are class 1 for test
2, the cost threshold may
Low Withdrawal probable if be overruled.
costs are 100m
The threshold is only
indicative. Experience
suggests that estimates
above this level can be
unreliable. There may be
considerable uncertainties
due to the type of
structure and associated
decommissioning
complexities.

21. Qualifying factors:

If there is an exited company (sold interest and section 29 not withdrawn)

in the section 29 group further withdrawals are not considered unless a

107
 subsequent transfer is intra-group or the exited company is a result of the
following class 2 for test 2 consideration.

Do not withdraw unless the purchasing company is at least class 2 for

test 2. Basically, the incoming company should have adequate funds to
meet their share of the decommissioning costs prior to withdrawing the
notice on the selling company. This addresses concerns raised by
industry during consultation and in representations on specific cases that
the Secretary of State should not depend solely on the joint and several
nature of the liability but take account of an individual companys ability to
fund their share of costs.

Do not withdraw if only one party left in the section 29 group unless they
are class 1 for test 2 and test 3. This takes account of the inherent risk of
one party holding 100% of the interests in a project.

Relevant security agreements will be taken into account. Where a

security agreement of the type described in Annex G has been
established we are likely to look favourably on the release of a departing
licensee. However, this will only be possible if at least 2 other section 29
holders remain. If the transfer will result in 100% ownership the last
party to sell will normally be required to police the agreement and their
section 29 notice will not be withdrawn.

We will also take account of any knowledge that the remaining companies
wish to sell their interest in the field or may be sold by their corporate
parents.

Step 5: Mitigation Measures

22. If the assessment indicates a medium or high risk, we will consider

whether the company has a parent or other associate which is UK registered and
has sufficient assets to cover decommissioning costs at the appropriate time.
We may apply section 30(1)(e) of the Act in respect of installations or section
30(2)(c) in respect of a pipeline and serve a notice under section 29 on the
relevant parent or associated party.

23. If the risks to the taxpayer are assessed as unacceptable, section 38(4) of
the Act, as amended by the Energy Act 2008, enables the Secretary of State to
require a company to provide security if they have been served with a notice
under section 29, or have a duty to carry out an approved decommissioning
programme. We do not expect to initiate section 38(4) if other mitigation
measures, such as serving on associated parties, can be used to reduce the risk.
Prior to issuing a notice requiring the provision of security the Secretary of State
would first give the company an opportunity to make representations regarding
whether they should receive such a notice and consult the Treasury. If such a
notice is issued the Secretary of State would respect any company concerns
regarding confidentiality. The provisions would only be discussed with the
companies directly involved.

108
24. When considering the risks, the Secretary of State will take account of
any relevant security agreements. We are not likely to issue a notice under
section 38(4) requiring security if there is a satisfactory security agreement in
place.

25. A company which fails to comply with a notice under section 38(4) will be
guilty of an offence unless they can prove that they exercised due diligence to
avoid the failure. In deciding the best way forward in such a situation the
Secretary of State will consider the reasons for the default and continue to look
for mechanisms to protect the taxpayer. Where security has been provided in
accordance with a notice and the security provider is down rated during the
period covered by the security, the Secretary of State will discuss any necessary
action with the company. The required action will depend on the new rating and
continued standing of the security provider.

26. Details of the relevant 2008 Act provisions and further information
regarding security provisions are given in section 3 and Annex G, respectively, of
this guidance.

New Field Developments

27. New fields may be developed by companies with limited financial

resources and DECC may be concerned about their ability to fund
decommissioning, especially if something should go wrong in the early phase of
the development. When a developer puts forward proposals for a new field we
will assess the financial strength of the companies involved, using the stepped
process outlined above and taking account of any additional information relevant
to the case. Each assessment is confidential but DECC will always be willing to
discuss it with the company and would take into account any proposals to
establish securities.

28. At this stage we are primarily considering the risk of premature

decommissioning resulting from disappointments in the performance of the
reservoir or installation. As with existing fields, if we feel that the field is high
risk a notice under section 29 may be served on associated parties and, if the risk
remains high, we will consider whether to require the provision of security.

29. Where security has been provided, we will reassess the position after
say, 6 months of production to decide whether to suspend the security
requirement as satisfactory field performance and assurance of future revenues
has been demonstrated. In such cases, we would expect to re-instate the
security closer to the end of field life as the field reservoir depletes. The net
value of the remaining recoverable reserves and the financial position will be
reviewed and discussed with the company.

109
Examples of Risk Assessment Process

Example 1

Decommissioning Costs 10m

Company % interest Share of Net Test 2 Company Test 3 Group Net Group Test 4
Decom Worth UKCS Worth UKCS
Costs liability liability
X 60 6m 100m 6%(class 1) 30m 30%(class1) 800m 80m 10%(class 1)
Y 20 2m 50m 4%(class 1) 30m 60%(class3) 90m 50m 56%(class 3)
Z 20 2m 20m 10%(class 1) 15m 75%(class4) 25m 20m 80%(class 4)
Assessment:
Company X has a significant percentage interest in the field and can easily afford both its share of the decommissioning costs
(tests 2) and its UKCS liability (test 3). Company X is also part of a group with significant resources (class 1 for test 4).
Companies Y and Z can easily afford their share of the decommissioning costs (test 2) but may have difficulty meeting both their
UKCS liability (test 3) and their groups UKCS liability (test 4).
Decommissioning costs for this project are relatively low.
Based on the strength of company X, this is a low risk case and risk mitigate is not necessary.

110
Action 1: Company Y sells to Company A
Company % interest Share of Net Test 2 Company Test 3 Group Net Group Test 4
Decom Worth UKCS Worth UKCS
Costs liability liability
X 60 6m 100m 6%(class 1) 30m 30%(class1) 800m 80m 10%(class 1)
A 20 2m 15m 13%(class 1) 10m 67%(class3) 40m 15m 37%(class 2)
Z 20 2m 20m 10%(class 1) 15m 75%(class4) 25m 20m 80%(class 4)
Y Withdraw N/A 50m N/A 28m 56%(class3) 90m 48m 53%(class 3)
Assessment:
The group remains low risk due to inclusion of company X.
Withdrawal is therefore probable as costs are less than 100m.
As incoming company (A) can afford its share of the project decommissioning costs (test 2) withdraw notice from company Y.

Action 2: Company Z sells to Company B

Company % interest Share of Net Test 2 Company Test 3 Group Net Group Test 4
Decom Worth UKCS Worth UKCS
Costs liability liability
X 60 6m 100m 6%(class 1) 30m 30%(class1) 800m 80m 10%(class 1)
A 20 2m 15m 13%(class 1) 10m 67%(class3) 40m 15m 37%(class 2)
B 20 2m 3m 67%(class 3) 2.5m 83%(class4) 10m 4m 40%(class 2)
Z Exited N/A 20m N/A 13m 65%(class3) 25m 18m 72%(class 4)
Assessment:
The group remains low risk due to the inclusion of company X.
As before withdrawal is probable as costs are less than 100m.
However, withdrawal is not considered unless the incoming company has adequate funds to meet its share of the
decommissioning costs. As company B may have difficulty meeting its costs (test 2) do not withdraw notice from company Z.

111
Action 3: Company A sells to Company C
Company % interest Share of Net Test 2 Company Test 3 Group Net Group Test 4
Decom Worth UKCS Worth UKCS
Costs liability liability
X 60 6m 100m 6%(class 1) 30m 30%(class1) 800m 80m 10%(class 1)
C 20 2m 20m 10%(class 1) 5m 25%(class1) 50m 10m 20%(class 1)
B 20 2m 3m 67%(class 3) 2.5m 83%(class4) 10m 4m 40%(class 2)
Z Exited N/A 20m N/A 13m 65%(class3) 25m 18m 72%(class 4)
A Withdraw N/A 15m N/A 8m 53%(class3) 40m 13m 32%(class 2)
Assessment:
The group remains low risk due to the inclusion of company X.
If there is an exited company further withdrawals are only considered if a subsequent transfer is intra-group or, as is the case
here, the exited company (Z) was retained because they sold to a company (B) that may have difficulty meeting its share of the
project decommissioning costs.
As the incoming company (C) in this case can afford its share of the project decommissioning costs (test 2) withdraw notice
from company A.

112
Action 4: Company X sells to Company D
Company % interest Share of Net Test 2 Company Test 3 Group Net Group Test 4
Decom Worth UKCS Worth UKCS
Costs liability liability
D 60 6m 50m 12%(class 1) 38m 76%(class4) 60m 45m 75%(class 4)
C 20 2m 20m 10%(class 1) 5m 25%(class1) 50m 10m 20%(class 1)
B 20 2m 3m 67%(class 3) 2.5m 83%(class4) 10m 4m 40%(class 2)
Z Exited N/A 20m N/A 13m 65%(class3) 25m 18m 72%(class 4)
X Exited N/A 100m N/A 24m 24%(class1) 800m 74m 9%(class 1)
Assessment:
If the notice is withdrawn from company X the section 29 group is no longer low risk.
Company C is the only company that can easily afford both its share of the project decommissioning costs (test 2) and its UKCS
liability (test 3). However, they only hold 20% interest in the field. In order to take comfort from the finances of one company
they need to hold a substantial interest, at least over 35%. Given that the other companies may have difficulty meeting their
UKCS liabilities, by default the section 29 group would be high risk, if notice withdrawn from company X, unless corporate groups
registered in the UK bring sufficient strength to mitigate the risk (test 4).
Given the relatively modest strength of the corporate groups in this case do not withdraw notice from company X.

113
Example 2

Decommissioning Costs 50m

Company % interest Share of Net Test 2 Company Test 3 Group Net Group Test 4
Decom Worth UKCS Worth UKCS
Costs liability liability
X 60 30m 250m 12%(class 1) 60m 24%(class1) 800m 100m 12%(class 1)
Y 20 10m 150m 7%(class 1) 30m 20%(class1) 250m 50m 20%(class 1)
Z 20 10m 80m 12%(class 1) 15m 19%(class1) 100m 20m 20%(class 1)
Assessment:
All companies can easily afford both their share of the decommissioning costs (test 2) and their UKCS liability (test 3). In addition
they are all part of corporate groups that can easily afford their overall UKCS liability.
This is a low risk case and risk mitigation is not necessary.

Action: Companies X and Y sell to Z

Company % interest Share of Net Test 2 Company Test 3 Group Net Group Test 4
Decom Worth UKCS Worth UKCS
Costs liability liability
Z 100 50m 80m 62%(class 3) 55m 69%(class3) 100m 60m 60%(class 3)
X Exited N/A 250m N/A 30m 12%(class1) 800m 70m 9%(class 1)
Y Exited N/A 150m N/A 20m 13%(class1) 250m 40m 16%(class 1)
Assessment:
Due to the inherent risk of one party holding 100% of the interest, withdrawal of notices from exited companies is only
considered if the remaining company can easily afford both its share of the decommissioning costs and its UKCS liability (class 1
for tests 2 and 3).
As company Z is class 3 for tests 2, 3 and 4 - do not withdraw notices from companies X and Y.

114
Example 3

Decommissioning Costs 250m

Company % interest Share of Net Test 2 Company Test 3 Group Net Group Test 4
Decom Worth UKCS Worth UKCS
Costs liability liability
X 60 150m 200m 75%(class 4) 190m 95%(class4) 250m 190m 76%(class 4)
Y 40 100m 150m 67%(class 3) 120m 80%(class4) 170m 130m 76%(class 4)
Assessment:
Both companies are likely to have difficulty meeting their share of the decommissioning costs (test 2) and their UKCS liability
(test 3).
This is a high risk case and risk mitigation measures will be considered.
The corporate groups of both companies are likely to have considerable difficulty meeting their liabilities (test 4) and the risk is
therefore not adequately mitigated by serving on the associates.
Given the high risk and high costs of this project security will be necessary. Prior to serving a notice requiring establishment of
security the Treasury will be consulted and the company given an opportunity to make representations.

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 ANNEX G

DECOMMISSIONING SECURITY AGREEMENTS TO WHICH THE

SECRETARY OF STATE IS A PARTY

General Background

1. The Secretary of State is not usually a party to the industrys security

agreements but the presence of an acceptable agreement may facilitate the
withdrawal of a section 29 notice on a departed licensee. DECC has participated
in the industry initiative to develop a standard template Decommissioning
Security Agreement, (DSA). As far as possible DECC will accept the terms in the
standard DSA but it contains options that licence groups will sometimes prefer
to use between themselves when the Secretary of State is not a party. The
template DSA and associated guidance are available from the Oil & Gas UK
website .www.oilandgasuk.co.uk. Although DECC will also consider security
agreements that do not utilise the DSA template they would need to meet the
same minimum requirements. For simplicity the DSA is referred in this Annex.

2. The over-riding aim of a DSA is to ensure that guaranteed funds (which

may include future revenues in appropriate cases) will be available to cover the
decommissioning costs at all times. For example, if a company becomes
insolvent before decommissioning, the security posted under the DSA would be
triggered and held in trust. This security will be equal to the insolvent
participants share of the decommissioning costs reduced by an allowance for
their share of any remaining oil and gas reserves and the operating expenditure
that would be spent in recovering those reserves, in line with a formula
contained in the DSA. This formula underpins the DSA and has to be
recalculated regularly by an independent third party to ensure that the levels of
security are realistic and up to date.

3. The Secretary of State for Energy and Climate Change may become a
party to a DSA to facilitate withdrawal of a section 29 notice from a departing
licensee, to ensure that changes to the agreement cannot be made without his
written consent, and, in certain cases, to enable him to take action to resolve a
default situation.

4. As DSAs are to be stand-alone documents, entirely separate from the

JOA (or similar agreement), agreement to any licence assignment granted by
DECCs Licensing Section does not imply consent to any change to the parties to
the DSA. Such changes should be agreed separately, through the Offshore
Decommissioning Unit, by written amendment to the DSA.

5. Cases where 100% ownership results following a licence transfer require

a special approach. In cases where there are two or more remaining licensees
each party effectively ensures that the other(s) adheres to the agreement (if they
do not do this they may become liable for another participants share, under the
joint and several provisions of the Act). However, in cases, where following
licence transfer one party will own 100% of the interests, DECC will require a
departed licensee to police the DSA. This party will usually be the last licensee
to sell their interests, and to ensure they police the agreement effectively their
section 29 notice will not be withdrawn. In addition, if this scenario is not
already incorporated, the format of the DSA will require amendment to reflect
the differences arising from the situation.

116
6. Where the Secretary of State has concerns about the ability of a group of
section 29 notice holders to fund the decommissioning of a project he can
initiate section 38(4) of the Petroleum Act 1998 to require security ( see Annex F).
This would only be done if other mitigation measures had not adequately
reduced the risk. When section 38(4) is used a DSA is not required. Although
the Secretary of State may become a party to a DSA and take the presence of an
acceptable agreement into account when considering whether to withdraw a
section 29 notice and/or issue a notice under section 38(4), these are commercial
agreements setting the security requirements between the companies. Where a
section 38(4) notice is issued it will specify what security is required including
the amount, the credit rating of security provider and the timing. The Secretary
of State will be the beneficiary and establishment of a trust fund is not
necessary. There will however be similarities with the Secretary of States
minimum requirements for a DSA and the types of security and risk factor
discussed below will apply. DECC will discuss the situation with the company
(which has a legal right to object) before issuing a notice under section 38(4).

Minimum Requirements for a DSA to which the Secretary of State is a

party

7. DECC recognise the impacts that the security requirements of DSAs can
have, particularly on smaller companies. Our requirements are as detailed below
but we do encourage proposals for alternative forms of security. Alternatives
must provide a similar level of security to letters of credit, i. e. be irrevocable, on
demand and issued by a UK body of substance (see below).

8. We require the parties to a DSA to provide security such as cash,

irrevocable standby Letters of Credit (LoCs) issued by a Prime Bank, or on-
demand (performance) bonds from Prime Banks or issued by an Insurer
regulated under the Financial Services and Markets Act 2000. For these
purposes the security must be issued by a body established in an EU or OECD
country with a UK lending or insurance office and which have an AA rating or
better as defined by Standard and Poors, Aa2 rating or better as defined by
Moodys or an equivalent rating by another recognised rating agency. We may
consider proposals which do not fully meet these criteria and take account of
factors such as the level of risk and decommissioning costs and the presence of
other parties to the DSA.

9. The DSA should be on a full field basis and should establish a mechanism
to allocate a share of the costs to each party. The security should cover each
partys share of the pre-tax costs of decommissioning the installations and
pipelines in the relevant field. In the event of default, although obligations
remain joint and several, in the first instance other parties should cover the share
of the default proportionate to their percentage interest.

10. The security should provide at least 100% of estimated costs including
site clear-up after the main removal work. In most cases it will also be
necessary to add a risk factor to cover the uncertainties surrounding cost
calculations. The need for and the amount of this will vary depending on the
complexities of the facilities to be decommissioned but in most circumstances
will add 50% to the total cost estimate. Unless one party owns 100% of the
interests, where the field concerned is in production and future revenues can be
reasonably predicted, allowance would be made for those revenues on a post tax
117
basis. However, salvage value of the equipment can only be discounted if the
security covers an FPSO type facility which has real intrinsic value. Following
completion of the main removal activities ongoing security to cover the site clear
up activities will be required (this amount will be in the range of 1-3% of the total
decommissioning costs). Further information on the formula to be used to
calculate the costs of decommissioning is contained within the template DSA
and its accompanying guidance notes.

11. Unless alternative forms of security are agreed, the DSA should provide
for the security in the form of LoCs, on-demand performance bonds or similar, to
be renewed annually, 2 months before the next period of security is due to
commence. In the event of the failure by any party to renew security before the
next period, that party would be in default and the LoC or performance bond
would be triggered and the money drawn down and deposited in a regulated
Trust Fund to accrue interest until it is needed to pay for decommissioning costs.

12. In addition to cash, LoC or on demand bonds we would accept that a

company of substantial financial standing can demonstrate its ability to meet all
its potential liabilities without providing a financial security. The particular
circumstances of the case and the level of decommissioning costs will
determine whether this is feasible and what defines an acceptable financial
status. However, the company would as a minimum have sufficient assets to
easily afford both its potential liabilities for the project and its wider UKCS
portfolio; with costs for each equating to less than 30% of the companys net
worth (see Annex F). The assets backing the net worth figure would need to be
held by the section 29 notice holder.

13. This approach does not change our policy on parent company guarantees
discussed below because it is based on the statutory obligation of the section 29
notice and the assets of the company.

14. The DSA should be drafted to ensure that any potential liability of the
Trust Fund to inheritance tax is accounted for in the calculation of the amount of
security.

Unacceptable Security

Parent Company Guarantees (PCGs)

15. PCGs are not considered to represent acceptable security for the
following reasons (although we are willing to consider any solutions which
address them).

16. A standby letter of credit imposes a primary contractual obligation on the

issuer to pay a specified sum of money on the happening of a specified event. It
can be argued that a PCG is related to the underlying contract and is not
therefore a primary obligation on the part of the guarantor. There remains,
therefore, the possibility that the guarantor might dispute the basis on which the
obligation in the underlying contract has arisen which could result in the matter
becoming the subject of litigation.

17. There are companies with interests in the UKCS which are subsidiaries of
major overseas companies but do not have significant UK assets and are reliant
upon support from the overseas parent. DECC is concerned about the
difficulties and potential delays in enforcing a PCG through foreign courts. Delay
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could hamper our objective of ensuring timely decommissioning. This situation
in turn creates a difficulty in accepting PCGs from UK parents. We are
concerned that different approaches could be alleged to discriminate against
recipients of section 29 notices whose parents are domiciled in other EU
Member States as the Treaty of Rome prohibits discrimination on the basis of
nationality. It is not our practice to accept PCGs from European parents. Whilst
the Brussels Convention of 1968 ensures that it is possible for judgments
obtained in one signatory state to be enforced in another such state, the
Convention does not extend to revenue, customs or administrative matters and
the recovery of decommissioning costs would be classed as an administrative
matter

18. In some cases the parent company may not itself have the long-term
financial strength we are looking for and in cases where a subsidiary is in
financial difficulty this may indicate that the parent and/or group as a whole is in
financial difficulty, as the need for the security to be called upon is most likely to
arise in cases where the group as a whole is in financial difficulties. Moreover, in
such cases, if the guarantor cannot or will not pay up under the guarantee, the
remaining participants would be left without any easily accessible assets to
cover the defaulting licensees share of decommissioning costs. This might
therefore expose the Secretary of State to the risks involved in trying to recover
decommissioning costs from overseas parent companies.

Independent Audit

19. Estimates of decommissioning costs and of the net value of remaining

recoverable reserves used to calculate the required levels of security must be
carried out at least every 3 years and may be required annually depending on the
project timescales. An independent third party expert approved by DECC must
verify this audit process. Further details about the timing and frequency of such
audits are contained within the template DSA.

Role of the Secretary of State

20. Where the parties agree to enter into a DSA of the kind described in the
preceding paragraphs, the Secretary of State will become a party to the
agreement to prevent any alterations being made to it without his consent. Any
proposed changes to the agreement, in the event of a licence assignment, for
example, would require a separate approval from the Secretary of State.

21. It is also conceivable that in the event of a default by all the other parties
to a DSA, the Secretary of State may need to arrange decommissioning and
draw on the securities arranged by the parties.

Independence of the DSA

22. The DSA must be a stand-alone document, entirely independent of the

JOA and any other similar agreements.

119
 ANNEX H

STATUTORY CONSULTEES FOR A DECOMMISSIONING PROGRAMME

The National Federation of Fishermens Organisations

NFFO Offices
30 Monkgate
York
YO31 7PF
(Tel: 01904 635430)

Scottish Fishermens Federation

24 Rubislaw Terrace
Aberdeen
AB10 1XE
(Tel: 01224 646944)

Northern Ireland Fishermens Federation

1 Coastguard Cottages
The Harbour
Portavogie
Co. Down
BT22 1EA
(Tel: 028 42771954)

Global Marine Systems Limited

New Saxon House
1 Winsford Way
Boreham Interchange
Chelmsford
Essex
CM2 5PD
(Tel: 01245 702000)

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 ANNEX I

ANNEX 16
(Ref. 9.19)
OSPAR CONVENTION FOR THE PROTECTION OF THE MARINE
ENVIRONMENT OF THE NORTH-EAST ATLANTIC
MEETING OF THE OSPAR COMMISSION (OSPAR)
STOCKHOLM: 26-30 JUNE 2006

OSPAR Recommendation 2006/5 on a Management Regime

for Offshore Cuttings Piles

RECALLING Article 2(3)of the Convention for the Protection of the Marine
Environment of the North-East Atlantic (OSPAR Convention), which, inter alia,
requires Contracting Parties to take full account of the latest technological
developments and practices when adopting programmes and measures and to
this end requires Contracting Parties to define with respect to programmes and
measures the application of best available techniques (BAT) and best
environmental practice (BEP), including, where appropriate, clean technology;
RECALLING Article 5 of the OSPAR Convention, which requires the Contracting
Parties to take all possible steps to prevent and eliminate pollution from offshore
sources in accordance with the provisions of the Convention, in particular as
provided for in Annex III;
RECALLING the programmes and measures contained in OSPAR Decision 98/3
on the Disposal of Disused Offshore Installations;
RECALLING the programmes and measures contained in OSPAR Decision
2000/3 on the Use of Organic-Phase Drilling Fluids (OPF) and the Discharge of
OPF-Contaminated Cuttings;
The Contracting Parties to the Convention for the Protection of the Marine
Environment of the North-East Atlantic RECOMMEND:
1. Definitions
1.1 For the purpose of this Recommendation:
BAT means best available techniques as defined in
Appendix 1 of the OSPAR Convention;
BEP means best environmental practice as defined
in Appendix 1 of the OSPAR Convention;
cuttings means solid material removed from drilled rock
together with any solids and liquids derived
from any adherent drilling fluids;
cuttings pile means an accumulation of cuttings on the sea
bed which has been derived from more than
one well;
operator means a company controlling the operations of
an offshore installation in a part of the maritime
area which is under the jurisdiction of a
Contracting Party;
121
organic-phase drilling fluid (OPF) means an organic-phase drilling fluid, which is
an emulsion of water and other additives in
which the continuous phase is a water-
immiscible organic fluid of animal, vegetable or
mineral origin;
other discharges means discharges other than discharges of
OPFs which contain either chemicals on the
OSPAR list of chemicals for priority action or
radioactive substances;

2. Purpose and Scope

2.1 The purpose of this Recommendation is to reduce to a level that is not
significant, the impacts of pollution by oil and/or other substances from
cuttings piles.
2.2 This recommendation is in addition to the programmes and measures
contained in OSPAR Decision 98/3 on the Disposal of Disused Offshore
Installations and OSPAR Decision 2000/3 on the use of Organic Phase
Drilling Fluids (OPF) and the discharge of OPF-Contaminated Cuttings.
2.3 This Recommendation applies to Contracting Parties which have cuttings
piles within their jurisdiction in their internal waters or territorial sea, or on
their continental shelf.

3. Programmes and Measures

3.1 The Cuttings Pile Management Regime is divided into two stages. Stage
1 involves initial screening of all cuttings piles. This should be completed within 2
years of the Recommendation taking effect. Stage 2 involves a BAT and/or BEP
assessment and should, where applicable, be carried out in the timeframe
determined in Stage 1.

Stage 1 (to be completed within 2 years of the Recommendation coming

into effect)
3.2 Contracting Parties should require that all cuttings piles are screened,
using existing information and relevant research, to identify those that require
further investigation.
3.3 Where water-based drilling fluids were used and no other discharges have
contaminated the cuttings pile, no further investigation is necessary.
3.4 Where organic-phase drilling fluids (OPF) were used and discharged or
other discharges have contaminated the cuttings pile the following process
should be completed:
3.4.1 Contracting Parties should require that the rate of oil loss and the
persistence over the area of seabed contaminated are assessed using
existing evidence where this is sufficient to carry out this process, and
undertaking the relevant research where more information is needed;
3.4.2 The rate of oil loss should be assessed on the basis of the quantity
of oil lost from the cuttings pile to the water column over time. The unit
used should be tonnes per year (tonnes/yr);

122
 3.4.3 The persistence should be assessed on the basis of the area of the
seabed where the concentration of oil remains above 50mg/kg and the
duration that this contamination level remains. The unit used should be
square kilometre years (km yrs). 2

3.5 The results of this process should be compared against the following
thresholds:
Rate of oil loss to water column: 10 tonnes/yr
Persistence over the area of seabed contaminated: 1
500 km yr 2

3.6 Where both the rate and persistence are BELOW the thresholds and no
other discharges have contaminated the cuttings pile, no further action is
necessary and the cuttings pile may be left in situ to degrade naturally.
3.7 Where either the rate of oil loss or the persistence are ABOVE the
thresholds, stage 2 should be initiated at a time to be determined by the
Contracting Party, taking into account the rate of oil loss, the persistence over
the area of seabed contaminated and the timing of the decommissioning of the
associated installation.

Stage 2 (to be carried out in the timeframe determined in Stage 1)

3.8 The Contracting Party should require that a study is carried out to
determine the best available techniques (BAT) and/or the best environmental
practice (BEP) for the cuttings pile.
3.9 The study should characterise the cuttings pile, review the impacts and
carry out a comparative assessment to determine BAT and/or BEP.
3.10 Characterisation should include determining the position, area and
topography, hydrography, volume, physical characteristics, and chemical content,
as well as a biological characterisation.
3.11 The current edition of the publication from Oljeindustriens Landsforening
(OLF) Guidelines for Characterisation of Offshore Drill Cuttings Piles (available
on www.olf.no) may be used in the completion of the study, or other methods
accepted by the Contracting Party.
3.12 Contracting Parties may require that a sampling programme should be
used to define the limit of areas contaminated or to determine the effects on the
macro-fauna, together with a more detailed characterisation of the cuttings pile.
3.13 When assessing BAT and/or BEP, consideration should include, but not
be limited to, the following options:
Onshore treatment and reuse
Onshore treatment and disposal
Offshore injection
Bioremediation in situ
Covering in situ
Natural degradation in situ
3.14 The comparative assessment should be made on the same basis as a
comparative assessment made under OSPAR Decision 98/3 on The Disposal of
Disused Offshore Installations and include consideration of the following
matters:

1
A persistence of 500 km2yr could mean an area of 1km2 is contaminated for 500 years or an area of 500
km2 is contaminated for 1 year.
123
3.14.1 The assessment should consider the potential impacts of the
proposed disposal of the cuttings pile on the environment and other
legitimate uses of the sea. The assessment should also consider the
practical availability of re-use, recycling and disposal options;
3.14.2 The information collated in the assessment should be sufficient to
enable a reasoned judgement on the practicability of each of the disposal
options, and to allow for an authoritative comparative evaluation;
3.14.3 The assessment of the disposal options should take into account,
but need not be restricted to:
a. technical and engineering aspects of the option, including re-use
and recycling and the impacts associated with cleaning the
cuttings pile while it is offshore;
b. the timing of the decommissioning;
c. safety considerations associated with removal and disposal,
taking into account methods for assessing health and safety at
work;
d. impacts on the marine environment, including those arising from
exposure of biota to contaminants associated with the cuttings
pile, other biological impacts arising from physical effects,
conflicts with the conservation of species, with the protection of
their habitats, or with mariculture, and interference with other
legitimate uses of the sea;
e. impacts on other environmental compartments, including
emissions to the atmosphere, leaching to groundwater,
discharges to surface fresh water and effects on the soil;
f. consumption of natural resources and energy;
g. other consequences to the environment which may be
expected to result from the options;
h. impacts on amenities, the activities of communities and on
future uses of the environment; and
i. economic aspects
3.14.4 For the matters outlined in 3.14.3, Contracting Parties should
require each option to be assessed using appropriate methodologies.
The preferred option should be selected by focussing on matters
where there are significant differences. The means used to select the
preferred option should be described and allow the Contracting Party
to make consistent decisions;
3.14.5 The assessment should take into account the inherent
uncertainties associated with each option, and should be based upon
conservative assumptions about potential impacts. Cumulative effects
from the disposal of material in the maritime area and existing
stresses on the marine environment arising from other human
activities should also be taken into account;
3.14.6 The assessment should also consider what management
measures (including responsibilities, resources and funding) might be
required to prevent or mitigate adverse consequences of each option,

124
 and should indicate the scope and scale of any monitoring that may
be required;
3.14.7 The assessment should take account of the decommissioning of
the associated installation and especially the decommissioning of any
seabed structures, the effect this may have on the cuttings pile and
any opportunities that may emerge in relation to carrying out
simultaneous activities to minimise the overall environmental impacts;
3.14.8 The assessment should also take account of potential disturbance
of the pile due to other legitimate uses of the sea after
decommissioning of the associated installation;
3.14.9 The assessment, which should be based on scientific principles
and should be linked back to the supporting evidence and arguments,
should be sufficient to enable the Contracting Party to reach a
judgement on the proposal for BAT and/or BEP. Documentation
should identify the origins of the data used, together with any relevant
information on the quality assurance of that data.
3.15 The Contracting Party, taking account of the conclusions of the
comparative assessment, should approve a plan, including a timeframe, to
implement BAT and/or BEP.
3.16 The Contracting Party should consider whether to require reporting to
confirm that the plan is progressing as expected and/or independent
confirmation (e.g. from relevant fishing organisations) that it has been completed
satisfactorily.

4. Entry into Force

4.1 This Recommendation has effect from 30 June 2006.

5. Implementation Report
5.1 Reports on the implementation of this Recommendation should be
submitted by Contracting Parties with cuttings piles in their jurisdiction, using as
far as possible the format set out in Appendix 1.
5.2 The reports should be submitted to the appropriate OSPAR subsidiary body
in the meeting cycle 2008/2009. Subsequent reports on implementation should
be made if deemed necessary by the Commission.

125
 Appendix 1

Format for Reporting on Implementation of OSPAR Recommendation

2006/5 on a Management Regime for Offshore Cuttings Piles

(Note: In accordance with paragraph 5.1 of the Recommendation, this format

should be used as far as possible in implementation reports)

I. Implementation Report on Compliance

Country:

Reservation applies yes/no *

Is measure applicable yes/no*

in your country?

If not applicable, then state why not (e.g. no relevant cuttings piles)

................................................................................................................................................
................................................................................................................................................
................................................................................................................................................
................................................................................................................................................

Means of by legislation by administrative by negotiated

Implementation: action agreement
yes/no* yes/no* yes/no*

Please provide information on:

specific measures taken to give effect to this measure;
b. any special difficulties encountered, such as practical or legal problems, in
the implementation of this measure;
c. the reasons for not having fully implemented this measure should be spelt
out clearly and plans for full implementation should be reported;
d. if appropriate, progress towards being able to lift the reservation.

................................................................................................................................................
................................................................................................................................................
................................................................................................................................................
................................................................................................................................................

*
Delete whichever is not appropriate.
126
 II. Implementation Report on Effectiveness

NOTE: The following data and information should be reported to the extent
possible. Please state the reasons, if some required data and information
cannot be provided.

Total number of cuttings piles for which Stage 1 Assessment has been completed
Total number of cuttings piles for which Stage 2 Assessment has been completed

Total number of cuttings piles receiving:

onshore treatment and reuse
onshore treatment and disposal
offshore injection
bioremediation in situ
covering in situ
natural degradation in situ
other treatment option
explain

For cuttings piles assessed under Stage 1

Field Rate of oil loss (te/yr) Persistence (km2yr)

127
 ANNEX J

DECOMMISSIONING PROGRAMME PROCESS: FLOWCHART

STAGE 1 Operator initiates discussions with DECC

Up to 3 years in advance of COP (5 years for potential derogation cases)
Outline timetable

STAGE 2
Detailed discussions between operator and DECC
leading to submission of consultation draft programme

Consideration of programme by DECC, Statutory consultations by Operator.

OGDs & Agencies Wider consultation by public notice/internet

DECC sends written comments on draft to operator

Non- Derogation cases Derogation cases

Operator submits post consultation draft

programme incorporating comments

Operator submits extracts incorporating

DECC consults ministers with regard to
comments and outcomes of consultations
derogation. Operator submits separate
derogation document

DECC consults OPSAR contracting

Parties. DECC makes decision on
derogation in light of OSPAR Consultation

STAGE 3 DECC formally directs owners to submit decommissioning programme

Approval of programme by Secretary of State

STAGE 4 Operator carries out decommissioning in accordance with the programme.

Debris/environmental surveys/seabed clearance carried out

STAGE 5 Operator carries out post-decommissioning monitoring as specified in programme.

Reports submitted to DECC. DECC then reports to OSPAR.

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INDEX

References are to paragraph numbers, e.g. 3.23; Annex E.17. Annex B has
four annexes marked, e.g. Annex B/3.

A
activities requiring approval, Annex D (Summary table)
Admiralty Charts, 15.2, Annex E.17
B
beneficial interest, 3.23
body corporate, 3.23
C
carbon capture and storage (CCS), 2.21-2.22
charging a fee for approving/revising programmes, 2-13-2.16
climate change 1.1 -1.2, 6.4 Annex A notes, C.10
Close-out report, 5.16, 12.20, 13.1-13.2
Coast Protection Act 1949, 2.3, Annex D.2
combined decommissioning programmes, structure, Annex C.18
company risk classification, Annex F.15-F.16
concrete installations, 1.9 1.11, 5.4, 5.12, 6.5, 7.13-7.17, Annex A,
Annex B.1
consents required, Annex D (Summary table)
consultation see decommissioning programme
Continental Shelf Act 1964, Annex D.2, E.20
controlled waste, Annex D.7-D.11
controlled waters, Annex D.4
Convention on the Protection of the Marine Environment of the NE Atlantic
1992 (OSPAR Convention), 1.5
Convention on International Trade in Endangered Species, 12.11,
Annex D (Summary table)
costs, 6.11, Annex A (Notes), C.12, F.14
Council for Nature Conservation and the Countryside (CNCC), Annex E.11
Countryside Council for Wales (CCW), Annex E.11
Crown Estate, 10.18, Annex E.20-E.21
D
dangerous substances in harbour areas, Annex D.16
debris clearance, 12.12-12.15, 13.1, Annex C.15
decommissioning liabilities, 3.1-3.14, Annex F
decommissioning programme,
approval, 2.1, 6.30
changes to approved programme, 6.33
consultations, 6.24-6.29, C.11, Annex H
contents, 2.2, 6.1-6.11, Annex C
derogation cases, 6.21-6.23
persons required to submit, 3.1 3.14
reporting progress, 6.31-6.32
submission, 2.12, 6.12-6.20
Decommissioning Security Agreement, Annex G
Decommissioning Technology Forum (DTF), 17.2
deferral and phased decommissioning, 5.18-5.23
Department for Environment, Food and Rural Affairs (DEFRA), Annex E.1-E.2
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Department for Transport (DfT), Ports Division, Annex E.6
Department of the Environment for Northern Ireland (DOENI), Annex E.9-E.10
deposits of materials at sea, 2.5, Annex D.3-D.4, E.2-E.4
derogation, 1.9-1.11, 5.4, 6.21-6.23, 6.5, 7.3 7.5, 7.10 7.14, 7.23
Annex A.1-A.7, Annex B
Dismantlement Safety Case, 2.3, D.18 D.25
disposal of materials see waste
Disused Pipeline Notification, 10.13
drill cuttings, 11.1-11.5, 15.3, Annex C.9, Annex I
E
emissions trading scheme, 12.7, Annex D (Summary table)
Energy Act 2008, 2.17 2.22, 3.22 -3.28
Environment Agency (EA), 9.1, Annex D.6-D.15, E.13
Environment Permitting (England and Wales) Regulations 2007 (EPR),
Annex D.5
environmental considerations, 9.1-9.2, 10.3-10.17, 12.1-12.20, Annex C.10,
D.3-D.17, E.1-E.2, E.12-E.13
Environmental Impact Assessment (EIA), 6.4, 12.1, Annex A (Notes), C.10
environmental surveys, 12.9-12.10, 12-16-12.20, Annex C.16
explosives, Annex C.10, D (Summary table)
export controls, Annex D.26-D.29
F
Facility Information Request (FIR), 3.3
field licence, relinquishment, 16.5
financial security agreements, 4.1, Annex G
Fisheries Legacy Trust Company, 16.4
floating installations, 7.18-7.20
footings, 1.9-1.11, 7.11, Annex A, Annex B.1
G
gas storage and import infrastructure, 2.19-2.20
grout bags, 2.5, 10.9, Annex C.4
H
Habitats Directive, 6.4, 12.3, Annex C.10
harbour areas, dangerous substances, Annex D.16
hazardous waste, Annex D.12
Health and Safety at Work etc Act 1974, Annex D.18-D.25, E.14
Health and Safety Executive (HSE), Annex ,D.18-.25, E.14-16
HM Revenue & Customs (HMRC), 13.2, Annex D (Summary table)
Annex E.19
HM Treasury, Annex E.19
hybrid installations, 7.15-7.17
Hydrographic Office, 12.20, 15.1-15.4, Annex E.8, E.17
I
IMO guidelines for removal of offshore installations, 1.4, 8.1-8.5
Industrial Pollution and Radiochemical Inspectorate (IPRI), Annex E.9
industry co-operation and synergy, 17.1-17.2
Industry Technology Facilitator (ITF), 17.2
insolvency, protection of funds, 3.25
installations, 3.2, 7.8-7.22, Annex B.1, B.2, C.4
interim pipeline regime, 10.16
international obligations, 1.3-1.7
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J
Joint Nature Conservation Committee (JNCC), 12.3, Annex D (Table),
Annex E.11
L
letter of credit, Annex G.8, G.11
liabilities see decommissioning liabilities
licence holders, 3.23
limited liability partnerships, 3.23
LNG (Liquefied Natural Gas), 2.16
Lophelia pertusa coral, 12.11, Annex D (Summary table)
M
manager of an installation, 3.15-3.16
Marine Management Organisation (MMO), Annex D.4
marine safety, Annex E.7-E.8
marking of remains and safety zones, 15.1-15.6, Annex D (Summary table)
mattresses, 10.9, Annex C.4
median line facilities, 5.24
Ministry of Defence (MOD), Annex E.17-E.18
mitigation of financial risk, 3.24, Annex F.22 26, Annex G.6
monitoring of remains, post-decommissioning, 14.1-14.5, 16.2
multiple sub-area / multiblock licences, 3.23
N
National Hydrocarbons Data Archive (NHDA), 13.3
Natura 2000, Annex C.10
Natural England, Annex E.11
navigation safety, 15.4, Annex D.2, E.7
new field developments, 3.3, Annex F.27-F.29
Northern Ireland Environment Agency, Annex E.9-E.10
Notices to Mariners, 15.1 15.2, Annex E.17
O
Offshore Petroleum Activities (Conservation of Habitats) Regulations 2001,
12.3, Annex C.10
Open General Export Licences (OGEL), Annex D.28
OSPAR Decision 98/3, 1.8-1.11, 7.1 - 7.23, Annex B
OSPAR derogation candidates - derogation
OSPAR Recommendation 2006/5 on the Management Regime for offshore
cuttings piles, 11.1-11.5, Annex C.9, Annex I
ownership changes, 3.9 3.13, 4.1, Annex F
P
parent company guarantees, Annex G.15-G.18
permits required, Annex D (Summary table)
Petroleum Act 1998, 2.1-2.12, 3.22-3.28, Annex C.8, F, G.6
phased decommissioning, 5.18-5.23, Annex C.6
piggyback pipelines, 10.6
Pilot Brownfields initiative, 17.1, Annex A (Notes)
pipeline decommissioning, 1.7, 3.6, 3.28, 6.10, 10.1-10.18, Annex C.4, C.6
pipelines safety regulations, 2.3, Annex D.23, E.15
pollution prevention and control, Annex D (Table), Annex D.5-D.11,
E.12 E.13
PON5 process, Annex C.8
Portal, 18.1-18.4

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post-decommissioning monitoring and maintenance, 5.16, 12.16-12.20, 13.1,
14.1-14.5, Annex C.16
prime banks, G.8
project management and verification, Annex C.14
protected assets, 3.25
public notice, 6.25
Q
quantitative risk assessment (QRA) techniques, Annex A (Notes)
R
radioactive material, 2.7, 9.2, Annex D.14, D.15, E.12 E.13
records, provision for historically important, 19.1-19.6
remains, 14.1-14.5, 15.1-15.4, 16.2
residual liability, 16.1-16.5
re-use of facilities, 6.3, Annex C.6
risk assessment process, Annex F
calculation of risk, Annex F.8 F.12
guiding principles, Annex F.2 F.4
legislation, Annex F.5 F.7
tests, Annex F.13 F.14
rock-dump, 2.5, 10.10, Annex C.4
removal and disposal options, 7.1 7.23, Annex C.6
S
Sabellaria worm, 12.11
safety case, Annex D.20-D.21
safety criteria, Annex A
safety zones, 15.5-15.6, Annex D (Summary table)
Scottish Environment Protection Agency (SEPA), 9.1, Annex D.6 D.17, E.12
Scottish Government Marine Scotland (SG-MS), Annex E.3-5
Scottish Natural Heritage, Annex E.11
seabed clearance certificate, 12.20, 13.1, C.15
seabed deposits, 2.5, Annex D3 D4, Annex D (Summary table)
section 29 group risk classification, Annex F.17-19
section 29 notice, 3.1-3.14, 3.23, 6.9, 18.3, Annex F.5-F.12, F.20-F.21
Shipping and Ports Directorate, Annex E.7
Sintra statement, 7.17
Special Area of Conservation (SAC)/Special Protection Areas (SPA),
Annex C.10
special waste, Annex D.12
steel installations, 1.9 1.11, 7.8 - 7.12, Annex A, Annex B.1,
subsea installations, 7.21-7.22
T
territorial sea, 2.18, 10.18, Annex E.20-E.21
The Early Decommissioning Synergy Group (TEDS), 17.1
tiebacks, 3.17-3.21
topsides, 1.8, 5.2, 5.20, 7.7, 7.14, Annex C.4
U
umbilicals, 10.6, Annex C.4
V
VAT, Annex D (Summary Table)

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W
waste, 2.3, 2.6, 6.2, 9.1-9.2, Annex D.5 - D.15
wells, suspension/abandonment, 2.3, Annex C.4, C.8, D.25
Wild Birds Directive, 12.3, Annex C.10

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