OFFSHORE FACILITIES REMOVAL — A MAJOR ISSUE NOW AND FOR THE FUTURE

Abstract

The costs associated with removal of offshore production facilities can have a serious impact on project economics, especially for the shorter- life marginal fields. The requirements for removal of offshore facilities are set out in the Petroleum (Submerged Lands) Act and the guidelines prepared by the International Maritime Organisation, a United Nations agency. Esso Australia Limited has completed a major study of the removal of Bass Strait platforms and has evaluated the costs of platform removal by various methods. Environmental considerations, the needs and safety of other users of the sea, and cost need to be considered when examining options for removal of offshore platforms. The Australian Government needs to act soon to resolve the issues of residual liability and tax deductibility and so enable the oil industry to select the optimum removal methods and reliably predict future costs for removal.