SPE-208483-MS

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

Perspective

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David Christensen and Andrew Re, National Offshore Petroleum Safety and Environmental Management Authority
NOPSEMA

2021. Crown Copyright

This paper was prepared for presentation at the SPE Symposium: Decommissioning and Abandonment to be held virtually on 30 November - 2 December 2021.

This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents
of the paper have not been reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessarily reflect
any position of the Society of Petroleum Engineers, its officers, or members.

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

Introduction
Australia's offshore petroleum decommissioning challenge is significant given its remote location, limited
availability of specialist services and the relative infancy of Australia's offshore petroleum industry in
undertaking large scale decommissioning projects. Recent events in Australia have shown that the industry
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is widely not prepared for decommissioning. In many cases titleholders decommissioning plans appear
to contain insufficient detail given the scale and complexity of the decommissioning activities required
(NOPSEMA, 2021a).
Operations associated with petroleum projects inherently present risk to people and the environment.
It is therefore imperative that risks are managed throughout the life of the project and that infrastructure
is proactively decommissioned in a manner that means exposure to risk does not continue for longer than
necessary. Recent experience indicates that titleholders appear to not have appropriate decommissioning

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plans which has potential to increase risk exposure to people and the environment.
This paper will firstly explore the Australian offshore petroleum industry and regulatory context including
the primary legislative requirements and regulatory processes in place that govern decommissioning matters.
A focus will then be given to exploring the collapse of the NOGA group of companies as this has
contributed to significant change and focus on decommissioning matters in Australia in recent years. Some
key challenges associated with decommissioning from the regulator's perspective will then be described
along with what policy, regulatory and industry reforms are needed to ensure that Australia is ready to meet
the decommissioning challenge of the future. Two case studies will be provided to support conclusions and
recommendation made in this paper.

The Australian Offshore Petroleum Industry context

The Australian offshore petroleum industry has been in operation since the early 1960s. Various types of
offshore petroleum facilities have been installed including concrete gravity platforms, fixed steel jacket
platforms, well-head platforms and floating production facilities, combined with associated equipment such
as wells, pipelines, flowlines, subsea and buoyant mooring structures.
Since the 1960s, very little decommissioning activity has been executed. Now, more than half of the
approximately 68 facilities, 3,500 km of pipelines and 1000 wells, regulated by NOPSEMA are more than
20 years old, some more than 50 years. At least 13 facilities have ceased production and remain on location.
Modelling commissioned by National Energy Resources Australia (Advisian, 2021) has estimated that
Australia's combined offshore petroleum industry decommissioning liability (including wells, pipelines,
subsea equipment and facilities) to be US$40.5 billion.
As the industry continues to mature, an increasing number of offshore petroleum projects in Australian
waters are reaching the end of their operating lives and it is anticipated that much of this infrastructure
will need to be decommissioned over the next five to ten years (Advisian, 2021). To date a number of
smaller petroleum projects have been successfully decommissioned under the current policy, regulatory and
legislative framework. However, the framework has not been tested on larger decommissioning projects.

Regulatory approach
Australian Regulatory Context
In Australia, the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act) and associated
Regulations provides the legal framework for the exploration and recovery of petroleum and greenhouse
gas activities in Australian Commonwealth waters (those areas that are more than three nautical miles
from the territorial sea baseline). The key principle underpinning the OPGGS Act and Regulations is that
responsibility for ensuring the health and safety of workers and the protection of the environment lies with
those who create the risks. An objective-based regulatory regime sets high level requirements that must be
achieved but does not prescribe how those requirements must be met.
Under the OPGGS Act, decisions about the release of new areas for exploration, bidding by companies,
title transactions and resource management for offshore petroleum in Australian waters are jointly made by
the Commonwealth and state/Northern Territory governments through a ‘Joint Authority’ (JA) arrangement.
SPE-208483-MS 3

The JA comprising the responsible Commonwealth Minister and the relevant state or NT Minister or
their delegates. The National Offshore Petroleum Titles Administrator (NOPTA) is responsible for the
administration of offshore petroleum titles in Australian waters under the OPGGS Act.
NOPSEMA has been established and appointed under the OPGGS Act as regulator for health and safety,
structural (well) integrity and environmental management of petroleum activities in Australian waters,
(3-200nm offshore) and in coastal waters (0-3nm offshore) where regulatory powers and functions have
been conferred.

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Section 572 Maintenance and removal of property
Section 572 of the OPGGS Act establishes requirements for maintenance and removal of property by the
titleholders, along with exemptions and obligation provisions. Section 572(2) of the OPGGS Act provides
that a titleholder must maintain in good condition and repair all structures that are, and all equipment and
other property that is in the title area and used in connection with operations. Section 572(3) of the OPGGS
Act provides that a titleholder must remove from the title area all structures that are, and all equipment and
other property that is, neither used nor to be used in connection with the operations in which the titleholder
is or will be engaged.
These requirements are long-standing and have been in the legislation since 1967. Failure to comply with
the requirements entail either criminal or civil penalty routes.

Section 270 Consent to surrender title

In order for the Joint Authority to determine whether it may consent to surrender a title, it requires
information from NOPSEMA as to whether the titleholder has complied with the OPGGS Act and
Regulations. Section 270 of the OPGGS Act covers the surrender of titles and includes consideration of
decommissioning matters. Specifically, section 270(3)(c) to (f) requires demonstration that a titleholder has,
to the satisfaction of NOPSEMA, made arrangements in relation to property, permanently abandoning all
wells, provided for the conservation and protection of natural resources, and made good any damage to the
seabed or subsoil in the title area to be surrendered.

Permissioning documents
One of the ways in which NOPSEMA will be informed of regulatory compliance matters is through
permissioning documents, which includes the Environment Plan, Well Operations Management Plan and
Safety Case. Depending on the nature of the petroleum activity, one or more of these documents may be
required.
Any facility used for the purpose of conducting works or operations for petroleum activities must always
have a registered operator and a Safety Case in force. Any decommissioning related operations or works
conducted at a facility must be described within the Safety Case. The Environment Plan is the primary
permissioning document under which arrangements in relation to property, conservation and protection
of natural resources, and making good damage to the seabed or subsoil can be addressed by a titleholder
and accepted by NOPSEMA. The Well Operations Management Plan is the permissioning document under
which arrangements in relation to permanently abandoning a well or wells will be undertaken by a titleholder
and accepted by NOPSEMA.

Deviation from the requirement to remove property

The legislative provisions mandating a base case full removal of property under section 572(3) of
the OPGGS Act are prescriptive. However, the legislation recognises that removal may not always be
practicable and section 572(7) of the OPGGS Act provides an exception to the duty where titleholders may
seek acceptance to deviate from the requirement to remove property.
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In this context a deviation means that a titleholder intends to do something that is different from the
requirement of section 572(3) such as repurposing or in-situ abandoning of property. A titleholder must
demonstrate that the deviation provides an equal or better environmental, safety and well integrity outcome
than the full removal case (NOPSEMA, 2020).

International frameworks
Australia is party to the following applicable international treaties, conventions, and protocols:

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• Signatory to The United Nations Convention on the Law of the Sea (UNCLOS III) 1982 (ratified);

• Signatory to The Basel Convention on the Control of the Trans-Boundary Movements of Hazardous
Waste and Their Disposal 1992 (ratified);
• Party to the London Convention 1972 and 1996 Protocol to the London Convention;

• Member of the International Maritime Organization (IMO) since 1952; and

• Party to the Regional Seas Programme – Pacific Region (Nouméa Convention, 1990) and East
Asian Seas (no regional convention)
Australia is a signatory to the UNCLOS. NOPSEMA will have regard to the principles in IMO Guidelines
and other international treaties, conventions, and protocols, as appropriate, in the course of its decision
making (Australian Government, 2018).

Considerations of objective based regulatory process

Objective based regulatory process
The Australian offshore petroleum regulatory process is essentially an objective-based regime that sets high
level requirements that must be achieved but does not prescribe how those requirements are to be met.
Regulatory policy and guidance are provided to titleholders to communicate principles, information and
expectations that will be applied in relation to compliance oversight, and where necessary enforcement of
requirements described in the OPGGS Act and Regulations.
The broad feature of objective based regulation is that the goals are set by the regulator but the methods
to reach those goals are determined by the titleholder and ultimately accepted by the regulator. An important
consideration for this form of regulation is that it is influenced by the extent of alignment between private
and public policy interests (Folarin, 2013). Alignment tends to be highly incentivised during project
development when titleholders are motivated to obtain approval to develop projects and then continue to
operate projects to generate returns from their investment. Conversely, alignment may be less incentivised as
projects enter late life operations and then final decommissioning. During these later stages project returns
are lower and eventually negative when production has ceased, and final decommissioning activities have
commenced.
In these circumstances an application of a more coercive and prescriptive approach may be necessary to
motivate relevant parties (Gunningham, 2007). In the Australian context, this can be done via the issue of
direction notices that place prescriptive requirements upon titleholders to make arrangements in relation to
the property, permanently abandoning wells, conservation and protection of natural resources, and making
good any damage to the seabed or subsoil and thereby comply with the OPGGS Act and Regulations.
SPE-208483-MS 5

Catalyst for change

The Northern Endeavour FPSO
The Northern Endeavour (Figure 1) is a floating production, storage and offloading (FPSO) facility installed
to produce petroleum products as part of the Laminaria and Corallina Field Development (Figure 2). The
FPSO is located between the two fields which are approximately 550 km offshore of Darwin in the joint
petroleum development area of Timor Leste and Australia.

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Figure 1—The Northern Endeavour FPSO

Figure 2—Conceptual overview of the Laminaria and Corallina Field Development

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Production from both fields commenced in 1999, with peak production of 180,000 bbl/day. In 2015, the
production licence and title were held by a joint venture between two corporations with one registered as
the operator of the Northern Endeavour. Based upon their own commercial and technical analysis, the joint
venture announced its intention to cease production in the second half of 2016 and move to decommissioning
the fields soon afterwards.
Northern Oil and Gas Australia Pty Ltd (NOGA) was incorporated in August 2015, with a sole company
director. In September 2015 NOGA entered into a sales agreement with the then titleholders which

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ultimately resulted in NOGA acquiring 100 per cent of the assets, including the Northern Endeavour
and titles. The NOGA group of companies entered voluntary administration in September 2019 and
subsequently, into liquidation in February 2020 (Walker, 2020). As a consequence, the Australian
Government took control of the Northern Endeavour. As of the date of this paper, the Northern Endeavour
remains on location, is not producing petroleum products and is being prepared for decommissioning. This is
the first and currently only event in the Australian offshore oil and gas industry where an offshore petroleum
asset has required administration from the Australian Government.

Immediate regulatory response

In October 2019, a Statement of Expectations was issued by the responsible Commonwealth Minister
(Australian Government, 2019), setting out the need for heightened oversight of titleholder compliance
with their decommissioning obligations. In response, regulatory compliance monitoring and enforcement
activities have increased to ensure titleholders are appropriately planning for and implementing
decommissioning.
In 2020, NOPSEMA published a Section 572 Maintenance and removal of property policy to
outline decommissioning requirements and regulatory expectations. In 2021 NOPSEMA published a
five-year decommissioning strategy and compliance plan. The decommissioning strategy sets out how
NOPSEMA will work with duty holders to ensure the timely and responsible planning and implementation
of decommissioning. The compliance plan identifies the compliance actions titleholders can expect
NOPSEMA to consider depending on the level of planning and preparation duty holders have undertaken
in respect to decommissioning.
In 2020 and throughout 2021, as part of increasing its oversight, NOPSEMA issued several direction
notices for non-producing facilities throughout Australia. The directions clearly set out regulatory
expectations for decommissioning, including mandating timeframes for permanently abandoning wells,
removing property, protecting natural resources, and making good any damage to the seabed or subsoil.

The "Walker review" (Walker, 2020)

The Australian government sought to understand the circumstances that led to it taking over the
decommissioning of the Laminaria and Corallina Field Development and implement changes to minimise
the risk of it occurring again. On 23 March 2020 the Minister for Resources, Water and Northern Australia
appointed Mr Steve Walker to conduct an independent review into the circumstances leading to the
administration and liquidation of NOGA (the "Walker review").
The review examined the roles, responsibilities and behaviours of the key stakeholders; NOGA,
NOPSEMA, NOPTA and the Joint Authority and advised on potential reforms of the offshore oil and gas
regulatory regime. The review made 9 recommendations to improve practices, policies and legislation.

Some of the Decommissioning Challenges in Australia

Australia's regulatory regime
Australia is considered to have a robust and comprehensive regulatory regime in place to ensure all
petroleum activities are conducted in a manner that ensures optimal safety, well integrity and environmental
SPE-208483-MS 7

management outcomes. IOGP report 584 (IOGP, 2017) considers Australia along with the United Kingdom,
Norway, the United States, Thailand and Brunei, to have the most comprehensive decommissioning
regulations. The report reviewed the national legislation of 32 countries as well as relevant international
and regional frameworks.
Notwithstanding the above, the Walker review highlighted gaps in the regulations that could be open to
exploitation. The sale of the Laminaria and Corallina development along with the Northern Endeavour FPSO
and subsequent transfer of decommissioning liability to a newly formed company with minimal financial

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security may have been undertaken legally, however the ethical deliberations continue to be debated in
public forums today (Milne, 2021).

Extent of planning for decommissioning

The concept of life cycle planning is a requirement of a holistic asset management system and promoted
by international standards such as ISO 55001 (2014). However, a recent assessment of projects that have
either ceased operations, or are nearing the end of operations, has found that permissioning documents
specifically Safety Cases and Environment Plans, contain little information regarding decommissioning
(NOPSEMA, 2021a). Experience in Australia and internationally has shown the ability to decommission
appropriately is increasingly at risk the longer the period between cessation of production and completion
of decommissioning activities.
Many petroleum projects are now approaching the end of their operational lives and very little planning
for decommissioning has been completed to date. For example, in case study 1, production from a facility
had ceased in 2008 and when requested in 2021, the titleholder was unable to provide plans to the level
of planning and timing commensurate with the scale of decommissioning activities required. Similarly, in
case study 2, petroleum production from a project had ceased in 2009 and the FPSO departed the field later
that same year. Approximately 4 years later the FPSO mooring system which had not been removed, lost
buoyancy and sank to the seabed. To date there is petroleum property remaining on the seafloor with no
regulatory approvals in place to remove or otherwise deal with the property.

Australia's remoteness and capability

Preparations for decommissioning and the eventual removal of property requires specialist services that will
have long supply lead times. Australia is located a significant distance from established petroleum industry
provinces such as those in the Gulf of Mexico and the North Sea. As a result, the availability of specialist
services such as well intervention vessels, diving spreads and heavy lift vessels in the Asia-Pacific region
is limited. Mobilisation to the region is costly and may require years of planning.
For complicated decommissioning projects, supporting studies to determine the optimal solution
followed by the engineering and design will need to occur in parallel or prior to the establishment of contracts
for specialist services. In this event, the development of detailed decommissioning plans may take several
years and therefore must be commenced in advance of the end of production to enable decommissioning
activity to be completed within reasonable timeframes.

Company growth, profits, and decommissioning expenses

Final decommissioning outcomes can be influenced by cost as these activities occur late in the operations
life when titleholder returns are low or negative. Economic factors such as commodity prices and reservoir
performance may impact the end of field life forecasts and other planning outcomes. Further, petroleum
commodity prices have historically been cyclical and affected by uncontrollable influences such as weather
patterns, outbreak of armed conflicts and more recently, events such as the Covid-19 pandemic.
Titleholders often have limited capital budgets available and annual budgets may be fixed at corporate
levels. Decommissioning activities will always be in competition for capital budget allocation and when
8 SPE-208483-MS

considering that these activities are not seen to contribute to company growth, they may get deferred to
make way for revenue generating projects.

Industry acceptance of full removal of all property as base case

Decommissioning requirements upon titleholders are long-standing. Further, the Australian Government's
Offshore decommissioning guideline (Australian Government, 2018) outlines the policy position that the
removal of all infrastructure is the base case. The policy acknowledges that alternative end states such as
repurposing or in situ abandoning may be justified when demonstrated to deliver equal or better outcomes

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and comply with relevant laws and international treaty obligations.
Notwithstanding the above, some titleholders have submitted permissioning documents describing
outcomes of all property being left in-situ with little or no demonstration of an equal or better outcome to
the full removal case, and a poor demonstration of adherence with international treaties, conventions, and
protocols. Titleholders should also avoid "reverse ALARP" outcomes where it is attempted to show that
moving to a less protected situation will meet the legal requirement to reduce risks to a level that is ALARP,
arguing that the increase in risk is more than balanced by gains in reduced operational costs or increased
operating profit. The requirement to reduce risks as low as reasonably practicable would rule out acceptance
of a less protected but significantly cheaper approach to the control of risks (NOPSEMA, 2020).

Clarity in an objective based regulatory regime

In an objective based regulatory regime with high level requirements, clarity on administrative principles
and expectations is necessary to enable effective regulation (Freiberg, 2017). For example, the OPGGS
Act and Regulations do not apply timeframes to when decommissioning activities should commence or
be completed by. Similarly, it does not provide details on what infrastructure must be removed and what
will be considered for deviation to remain in-situ. Widely untested in Australia, these two issues result in
uncertainty with titleholders.
There is not a one-size fits all approach to decommissioning. The nature and complexity of infrastructure
varies considerably between projects and when combined with safety, environment, economic and technical
considerations means that decommissioning each piece of infrastructure will have its own unique challenges.
As such, decommissioning outcomes must consider the specific circumstances of the petroleum activity or
project. Regulators need to find a balance between providing guidance and clarity on these issues whilst
avoiding overly and unnecessary prescriptive requirements.

Changes in understanding of risk and public expectations

Petroleum activities provide many sources of potential contaminants to the environment. The impact from
oil spills, drill cuttings and produced water released back into the environment are generally understood.
However, the impact and risk of pollutants and toxic by-products from petroleum production associated
with decommissioning activities are less so (Melbourne-Thomas et al., 2021).
Facilities and pipelines used for petroleum production often contain significant volumes of toxic materials
such as plastics, paint and fire-retardant coatings. If these are not removed, they will break down over
time and be released into the environment. Similarly, facilities and pipelines that have contained petroleum
products may be left with by-products either absorbed into their surfaces or deposited within. Contaminants
may include heavy metals (Mercury) and naturally occurring radioactive materials (NORMs). These
contaminants if left inside facilities and pipelines that are subsequently left in-situ will be released back into
the environment over time. The effects of this on the marine biota is less understood and as a result, the
longer-term environmental impacts are at times inadequately considered.
Public expectation with respect to plastics and net-zero carbon emissions are much higher today than
when the petroleum industry began in the 1960s. Some decommissioning outcomes that may have been
SPE-208483-MS 9

considered appropriate as little as 10 years ago are simply no longer acceptable. Titleholders must be
prepared to adapt to changing public expectations as part of maintain a social licence.
For example, in 2021, the Australian Government released its National Plastics Plan (Australian
Government, 2021) in response to increasing community concern. The plan describes actions and targets to
reduce plastic consumption and increase recycling with the aim of reducing the volume of plastics entering
landfill and the marine environment. Whilst this plan was not developed for the offshore petroleum industry
it is certainly an indication of public expectations with respect to plastic wastes.

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The Way Forward
Policy change
As a result of the Walker review, the Australian Government initiated legislative and regulatory reform.
In the first instance, amendments to the OPGGS Act have been proposed. The Offshore Petroleum and
Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021 (the Bill), aims
to strengthen and clarify Australia's offshore oil and gas regulatory framework. The proposed measures
include:

• oversight of changes in company control (such as through a corporate merger or acquisition)

• an expansion of existing powers to ‘call back’ previous titleholders to decommission and remediate
the environment (also known as trailing liability)
• the inclusion of decision making criteria and expanded information gathering powers to assess
suitability of companies operating in the offshore oil and gas regime.
Further to the changes proposed in the Bill, the Australian Government is also reviewing arrangements for
regulatory oversight of titleholder compliance with financial assurance obligations, with particular attention
to decommissioning activities. Other legislative and regulatory changes are being considered through the
enhanced decommissioning framework being developed by the Australian Government Department of
Industry, Science, Energy and Resources.

Reforming regulatory practice

In recognition of the Minister's Statement of Expectation (Australian Government, 2019), NOPSEMA has
modified its practice in relation to regulatory oversight of decommissioning matters. The first key reform
area relates to having a much greater focus on results. This has entailed moving away from traditional
measures of output or agency productivity to specific targets framed around a well-defined problem area.
In this case, a problem relating to a lack of timely completion of decommissioning activities by titleholders
as illustrated in case studies 1 and 2 explained below.
To provide this focus on results, clarity of expectations and a benchmark for good practice, NOPSEMA
issued a Decommissioning Compliance Strategy (NOPSEMA, 2021b) which set targets of:

• All wells have been permanently abandoned, in accordance with the accepted Well Operations
Management Plan and demonstrated by a written report of the abandonment process, within 3 years
of permanently ceasing production (or from when no longer used).
• Moored or tethered buoyant structures have been removed within 12 months from departure of the
floating production facility; and
• All other property is decommissioned to its approved end state within 5 years.

Notwithstanding the strategy targets above, actual timelines will be based upon sound decommissioning
plans. Considerations that will inform decommissioning timelines (both accelerate and defer) include
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assessment of risk, level of preservation and integrity management of infrastructure being decommissioned
and the outcomes of studies that support alternative timelines.
The second key reform area relates to adoption of a tailored problem-solving approach in the form
of a Decommissioning Compliance Plan (NOPSEMA, 2021a). A range of regulatory tools and processes
have been and will continue to be used by NOPSEMA for securing compliance and eliminating risks
associated with decommissioning matters. All facilities and activities have been risk rated using a range of
criteria to determine the type of compliance tool and processes that will be applied based on their specific

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circumstances to ultimately ensure the safe, timely and environmentally responsible decommissioning of
petroleum activities in the future.
The third key reform area relates to NOPSEMA working collaboratively with titleholders and other
stakeholders to develop further policy guidance, promote and share good practice and other supporting
material. This will provide greater certainty on how to comply with decommissioning obligations and ensure
appropriate decommissioning outcomes are achieved (NOPSEMA, 2021b).

Industry planning for proactive decommissioning

Operations associated with petroleum projects inherently present risk to people and the environment. It is
therefore imperative that infrastructure is proactively decommissioned in a manner that means exposure to
risk continues for only as long as necessary. The safe and environmentally responsible decommissioning
of infrastructure is a key objective that titleholders should plan for over all stages of the life cycle of a
petroleum project. The development of decommissioning plans should not be left until after production
operations cease.
Figure 3 emphasises how decommissioning should be considered during all stages of a petroleum project.
Key decommissioning focus areas that relate to the stage of the project's life are shown below each stage.
This illustration is intended to be a simple linear representation and may not portray more complex scenarios
including multi facility projects, phased or campaign-based decommissioning or collaboration with other
petroleum projects. However, the fundamental principle of effective planning applies to all scenarios.

Figure 3—The process of decommissioning over the life cycle of a petroleum project

It is possible that the final decommissioning programme will vary from that originally envisaged.
Factors such as end of field life predictions, environmental conditions, technological advances, and public
expectations may change over the project life. As a result, decommissioning plans must be developed to
suit the specific circumstances of the petroleum project and reviewed regularly as assumptions change.
Titleholders should integrate decommissioning requirements as key inputs into asset management decision
making throughout the life of a project.
The level of decommissioning planning detail should mature over the project life cycle. During the early
Project Development stage, a lower level of decommissioning detail will be available. Any infrastructure
SPE-208483-MS 11

that is not designed nor intended to be removed (eg. that associated with the well bore) should be identified
during this early stage of project development. The intent with respect to this infrastructure should be
highlighted early to avoid misalignment with the regulator and other stakeholders.
Prudent titleholders should consider decommissioning during the project approval stage and include
associated costs in overall project economics and planning. These costs would then be expected to be
carried forward as liabilities on company balance sheets. Decommissioning cost estimates should have a
firm assumption basis and not be based upon unaccepted "best case" scenarios involving in situ abandoning

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much of the petroleum infrastructure if approval has not been given.
Compliance with decommissioning obligations throughout the life of a petroleum project and a focus
upon the final decommissioned end state will enable effective regulation and prevent regulatory intervention
such as that being seen in Australia currently.
Through the integration of decommissioning planning into overall asset management plans combined
with effective and robust planning, titleholders will be able to realise many other benefits. Most importantly
from a regulators point of view, the delivery of well planned outcomes will enable titleholders to achieve
increased safety and environmental performance. Concurrently, titleholders will also realise efficiencies and
economic benefits through staged and campaign-based decommissioning, sharing of resources with other
titleholders and the opportunistic contracting of specialist vessels, materials and equipment as occasions
arise.

Definitions
Decommissioning
The process of removing or otherwise satisfactorily dealing with offshore petroleum property (or
infrastructure) in a safe and environmentally responsible manner when it is neither used nor intended to
be used. This includes permanently abandoning wells, remediating the offshore area, and carrying out any
necessary monitoring.

Titleholder
The entity registered as the holder of a petroleum permit, lease or licence over a title area and is ultimately
responsible for compliance with the OPGGS Act.

Infrastructure
Means all vessels, structures, equipment, facilities, pipelines, wells (including those for exploration,
appraisal and production), and other property associated with a petroleum activity or an offshore petroleum
project. Also referred to as "property" in the Australian regulatory context.

Presentation of Data – Case Studies

Case Study 1 (NOPEMA, 2021c)
Production commenced from a group of fields in 1969 and to date consists of 421 wells, 19 platforms,
five subsea facilities (four existing and one proposed) and ∼600 km of subsea pipeline provided for by 38
licensed pipelines. The offshore operations assets are of considerable age.
Production of hydrocarbons has ceased at ten (10) platforms, three (3) subsea facilities, sixteen (16)
pipelines and over half of all wells drilled. Production is expected to cease at a further six (6) platforms
and seven (7) pipelines by 2025. The decommissioning of the offshore operations assets is a large and
complex series of activities and would include petroleum activities beyond the scope of the recently accepted
Environment Plan.
12 SPE-208483-MS

NOPSEMA's records indicate that the property remaining in the title areas may include, but not be
necessary limited to:

• 16 steel pile jacket and 2 concrete gravity structure platforms

• 2 monopod structures

• 6 subsea production systems

• Offshore pipelines, flowlines, secondary lines, umbilicals and associated equipment

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• Production, exploration, and appraisal wells.

The scale and complexity of the decommissioning activities is substantial, however there has been a
sustained passage of time since several pipelines and facilities have ceased production, with thirteen (13)
out of twenty-four (24) facilities ceasing production between 2008 and 2020. A further six (6) platforms
are expected to cease production by 2025. In addition, 16 pipelines have ceased production and a further
seven (7) are currently expected to cease production by 2025.
It is NOPSEMA's view that the titleholders ability to decommission appropriately is increasingly at risk
the longer the period that elapses between cessation of production and completion of decommissioning
activities. Further it is NOPSEMA's view that risk to safety of people at facilities and environmental risks
and impacts are also observed to be increasingly challenging to manage the longer non-producing facilities
remain.
NOPSEMA is of the opinion that while the titleholder has provided an overview of the decommissioning
activities proposed, the level of planning and timing proposed for removal is not commensurate with the
scale of decommissioning activities required.
Regarding asset integrity. Between March 2020 and May 2020 NOPSEMA inspected several non-
producing facilities in Bass Strait to determine the status of registered holder activities in relation to the
maintenance and removal of structures, equipment, and property from the title area. On completion of these
inspections, NOPSEMA concluded that the titleholder was not undertaking adequate field maintenance
activities at two of the facilities.
There is also uncertainty regarding the status of structural integrity for several other facilities. This may
have implications for the titleholders’ ability to execute decommissioning activities safely in the future and
ensure that there is certainty with respect to what is required to maintain property and equipment in good
condition and repair.
There is uncertainty regarding whether the registered holder's arrangements for maintaining non-
producing facilities, structures and equipment in good condition and repair are of an appropriate standard
so as not to preclude their full removal in the future.

Case Study 2 (NOPSEMA, 2021d)

Production commenced from a group of fields in 1994 via a Floating Production, Storage and Offloading
vessel (FPSO) vessel. Production from the fields ceased in September 2009 and the FPSO permanently
departed the fields in November 2009.
Between January and May 2013, the FPSO's Riser Turret Mooring (RTM) buoy lost buoyancy and sank
to the seabed. In 2017, the titleholder permanently abandoned production wells in the field. Wellheads were
left in place and production trees laid on the seabed. Mid depth buoys were removed from the field in 2018.
To date, the registered holders have not yet competed the removal of all the remaining property from the
title areas and NOPSEMA's records indicate that there is substantial property remaining on the seabed.
There is no Environment Plan providing for the remaining property to be left in-situ. Further, accepted
permissioning documents do not describe how the registered holders will maintain all property in good
condition and repair so as not to preclude full removal in the future.
SPE-208483-MS 13

It is recognised that to meet the content of the directions, the titleholders will need to undertake necessary
planning and submit relevant permissioning documents.

Conclusion
So, is Australia prepared for the decommissioning challenge?
Australia has a robust and comprehensive regulatory regime in place. Australia is considered, along with
the United Kingdom, Norway, the United States, Thailand and Brunei, to have the most comprehensive

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decommissioning regulations. However, when the NOGA group of companies entered into liquidation
in 2020 and the Australian Government took control of decommissioning the Laminaria and Corallina
field development, this unprecedented event highlighted a number of key issues in the Australian offshore
petroleum industry which can be summarised into two key matters:
1. Inadequate regulatory oversight, and;
2. Inappropriate level of planning for decommissioning across industry.
The first issue above is being addressed via policy and regulatory reform, and immediate regulatory
intervention such as the issue of direction notices in several cases. The second issue can be attributed to the
widespread lack of approved plans for the decommissioning of petroleum projects.
With more than half of the approximately 68 facilities, 3,500 km of pipelines and 1000 wells in Australian
waters having already ceased production or are planned to in the next decade, Australia faces a combined
offshore petroleum industry decommissioning liability of US$40.5 billion.
The successful execution of this work will be centred on early, effective and robust planning. This
will enable titleholders to realise increased safety and environmental performance. Good safety and
environmental performance are often associated with good project cost and schedule performance. As a
result, titleholders will also realise efficiencies and economic benefits through staged and campaign based
decommissioning, sharing of resources with other titleholders and the opportunistic contracting of specialist
vessels, materials and equipment as occasions arise.
Robust plans enable titleholders to demonstrate their intent with respect to decommissioning of
infrastructure. This will facilitate effective regulation and alignment with all stakeholders including public
interest groups.

Acknowledgments
This work acknowledges the support and information provided by NOPSEMA which has been used in the
content.

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