Decommissioning – a path forward for Australia

Abstract

Australia has embarked on a review of its decommissioning law and practice with a comprehensive discussion paper being issued by the Department of Industry, Innovation and Science. Initial stakeholder comments and submissions have been made, and the Department is now considering those submissions with a view to issuing recommendations to the Minister. The discussion paper ultimately proposes that new laws will be implemented to ensure that Australia has a 21st century fit-for-purpose decommissioning regime to apply to its offshore petroleum installations. After an overview of the review process and the selected issues that the Department regards of significance, this article considers a selection of the issues that emerge. It is evident that diverse views exist on almost all topics, and it will not be an easy task to find a balance that both meets the goals and aspirations of industry and community sectors. This challenge is compounded by the scale of decommissioning operations and the cost that will be incurred to remediate wells and remove associated facilities. The balance sought is one that does not stifle industry’s capacity to further invest nor impose onerous or uncompetitive imposts or controls, but also assures that adequate funding is available to carry out decommissioning works. Everyone seemingly accepts that it is not the role of the Australian Government to remove the facilities and restore the sea bed. Globally, techniques that are being increasingly utilised to manage this risk involve the imposition of securities or other assurance and enhanced statutory liability mechanisms. These legal and commercial considerations are given particular focus in the article.