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26 November, 2019

Decommissioning – Are we on the right track?Pauline InnesOPRED

Photograph provided by Total, showing section of

pipeline from Janice, James & Affleck fields being

recovered to deck

OPRED Decommissioning Objectives

2

Achieve

decommissioning

solutions that are

consistent with

regulatory obligations

and meet public

expectations.

Protect the taxpayer

from paying for the

full cost of

decommissioning

We seek to:

Decommissioning First Principles

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• Takes place once an oil or gas field reaches the end of its

economic life

• Is the process that sees infrastructure removed from service

• Is underpinned by “precautionary” and “polluter pays”

principles

• Is governed by the Petroleum Act 1998 as amended by the

Energy Acts

• Meets international obligations

• Proposals are set out in approved Decommissioning

Programme, which is required before work commencesPhotograph provided by Spirit Energy showing drill rig at

DP4 platform in preparation for decommissioning

International Obligations(OSPAR, UNCLOS, Geneva Convention 1958)

UK Legislation(Petroleum Act 1998, Part IV)

Policy Guidance

Guidance driven by International Obligations and UK Legislation

4

National Audit Office Report

• Evidence gathering in 2018

• The role oil and gas has played in the UK economy

• Potential costs and taxpayer contribution

• How government is managing the risks to the taxpayer

5

Are the various government departments involved in

decommissioning effectively protecting taxpayers’ interest?

OSPAR Contracting Party Feedback andMedia interest

• Consultation on proposed derogation permits (NinianNorthern and Brent)

• Objections from some Contracting Parties

• Media interest

• Stakeholder interest

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Are we on the right track?

Decommissioning Projects approved to date

Complete Removal

Platforms/Surface Installations 69

Subsea Installations 116

Derogations

Steel Jackets removed to top of footings 4

Concrete Gravity Base to be left in situ 3

Toppling 1

Achieve

decommissioning

solutions that are

consistent with

regulatory obligations

and meet public

expectations.

Projects vary in

complexity

Are we on the right track?

0

5

10

15

20

25

30

35

2012 2013 2014 2015 2016 2017 2018 2019

No

. P

roje

cts

Ap

pro

ve

d

Year

Decommissioning Project Approvals 2012-2019

Approved Anticipated Approval

9

Decommissioning in ActionSmaller-scale projects/preparatory works

Photograph provided by Perenco

showing removal of Pickerill B Comms

Tower

Photograph provided by Apache showing

recovered Nevis N11 wellhead protection

structure

Photograph provided by Spirit Energy showing

recovery of Ann A4 wellhead protection structure

10

Decommissioning in ActionWell P&A

Photograph provided by Spirit Energy

showing jack-up drill rig at DP4 platform

Photograph provided by Spirit Energy

showing slant drill rigs on DP4 platform

Photograph provided by CNOOC International

showing production string recovered from Ettrick &

Blackbird field

11

Photograph provided by Total showing recovery of

Janice Water Injection Manifold

Decommissioning in ActionSubsea Infrastructure

Photograph provided by Repsol Sinopec showing

recovery of Hannay Mid Water Arch

Photograph provided by Utility ROV Services Ltd

showing mattress recovery at Neptune Energy’s

Juliet field

12

Decommissioning in ActionPipelines & Stabilisation Features

Photograph provided by Fairfield Energy Limited

showing onboard the Normand Clipper with

pipeline from Merlin 8” Water Injection Flexible

sailing away from Dunlin Alpha

Photograph provided by Fairfield Energy Limited showing

pipe/flexibles from the Greater Dunlin Area at Greenhead

Base, Gremista, Lerwick Photograph provided by Fairfield Energy Limited

showing mattresses and full debris baskets

onboard the Normand Clipper at Greater Dunlin

Area

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Decommissioning in ActionTopsides and Jacket Preparation and Lifting

Photograph provided by Spirit Energy

showing recovery of ST-1 jacket

Photograph provided by Shell showing Brent Delta

platform topsides lifted clear of GBS legs (April 2017)

Photograph provided by Perenco showing Energy

Endeavour DSU working alongside Pickerill B during

hydrocarbon-free campaign

Re-use/Repurposing

14

CO²

H

Offshore wind farm

Aquaculture Carbon Capture

Utilisation & Storage

Offshore hotel

Are we on the right track?

15

Protect the taxpayer

from paying for the

full cost of

decommissioning

£844m in financial security(1)

9 DSAs (1)

(1) NAO Report 25 January 2019

Active M&A market

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No space for complacency!

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Achieve

decommissioning

solutions that are

consistent with

regulatory obligations

and meet public

expectations.

Protect the taxpayer

from paying for the

full cost of

decommissioning

• Stakeholder interest increasing

• Differing views on the “right” thing to do

• Repurposing and reuse

• Technology advancements

Government has low risk appetite

Taxpayers adequately protected?

New players in the basin

Commercial risk and commercial DSAs

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