Estimating appropriate levels of financial assurance for offshore petroleum activities in Australia
David Horn A , Felicity Harrison A , Andrew Woodhams B and Miranda Taylor BA GHD Pty Ltd
B APPEA Ltd
The APPEA Journal 55(1) 277-282 https://doi.org/10.1071/AJ14021
Published: 2015
Abstract
APPEA has developed a method to assist titleholders estimate appropriate levels of financial assurance for pollution incidents arising from petroleum activities. In 2013 the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act) was amended to strengthen the polluter pays principles of the act and clarify and broaden its financial assurance requirements. Those amendments included provision for regulation requiring titleholders to demonstrate financial assurance as a prior condition for the acceptance of an environment plan (EP) by the National Offshore Petroleum Safety and Environment Management Authority (NOPSEMA). The Australian Petroleum Production and Exploration Association (APPEA) has developed a standard method that can be used by titleholders to estimate the level of financial assurance required under the OPGGS Act. The APPEA method broadly follows the approach first proposed by Oil & Gas UK in their Guidelines to assist licensees in demonstrating Financial Responsibility to DECC for the consent of Exploration & Appraisal Wells in the UKCS. The method involves two steps: (i) estimate the cost of well control (if appropriate); and, (ii) estimate the cost of the operational response. For the purposes of estimating the cost of operational response, a pollution incident is assigned to one of eight cost bands, according to its potential impact, based on three parameters: the hydrocarbon type, the total spill volume and the potential shoreline impact. The APPEA method was applied to 10 case studies, spanning a range of petroleum activities, hydrocarbon types and geographical regions. The case studies demonstrated that the operational response costs for each of the case studies are broadly captured by their respective cost bands.
David Horn is a Chartered Professional Engineer and Fellow of Engineers Australia with a degree in Civil Engineering and a PhD in Environmental Engineering. He has over 25 years’ professional experience and currently leads the GHD environment business in Western Australia. |
Felicity Harrison has a Bachelor of Environmental Engineering degree from the University of Western Australia. She completed her Honours thesis in collaboration with GHD, titled Fluorescent signatures of North West Shelf crude oils and condensates, in November 2012, and has generated much interest in industry partners from this project. Felicity has three years’ experience in the oil and gas industry, working in both construction (at AJ Lucas for Chevron Australia) and consulting. She now works at GHD in the Marine and Ecology Service Group, delivering high-quality OSCPs and Environmental Plans to clients such as Apache, Santos and CalEnergy. |
Andrew Woodhams is a Fellow of the Institution of Chemical Engineers with over 25 year’s professional experience in the oil and gas industry, including 17 years with BP. Andrew is now Director of Operational Performance at APPEA. |
Miranda Taylor is APPEA’s national director of environment, safety, and productivity; she has worked with APPEA for more than six years. She sits on a number of key industry policy committees and forums, including supporting the APPEA Montara task force, which is now established as a permanent well safety and integrity committee. Prior to joining APPEA, she spent more than 20 years in HSE management and labour relations in the oil and gas and resources sector; in addition, she has extensive experience in strategic policy and political advocacy, working with state and federal governments in Australia. She has an honours degree (international economics and politics) from the London School of Economics, London University, and a postgraduate degree (industrial relations). |
