Xodus advises Japanese groups on decommissioning liabilities

Sept. 18, 2017
Xodus Group has completed a decommissioning ‘trend survey’ for Japan Oil & Gas and Metals National Corp.

Offshore staff

ABERDEEN, UKXodus Group has completed a decommissioning ‘trend survey’ for Japan Oil & Gas and Metals National Corp. (JOGMEC).

The aim was to provide Japanese oil and gas companies, some of which have interests in mature offshore fields in the North Sea, Southeast Asia and Australasia, with a better understanding of thedecommissioning process and how to manage their global asset and abandonment liabilities.

Over six months Xodus researched international decommissioning best practices and presented its conclusions to more than 100 operators and companies at JOGMEC’s Technology Research Center in Chiba, east of Tokyo.

It also provided guidelines on how to approach planning for cessation of production, and further data to help the companies understandcost modeling methodology and refine their cost estimates as assets approach cessation of production.

Peter Tipler, decommissioning lead at Xodus Group said: “Our research has helped put into context the complexities of global decommissioning such as timing and cost implications for decommissioning, current and future oil and gas transactions or how an operator’s relationship with its partners, stakeholders, regulators and government is as important as its relationship with supply chain.

The project covered well abandonment; decommissioning technology; cost estimation; regulations; HSE; security; tax; insurance; partner and stakeholder engagement, planning methodology and guidelines.

“Operators want to ensure they understand the extent of their potential liabilities because of the ‘joint and several’decommissioning liability which applies in the UK and other regions,” Tipler said.

“In certain cases, Japanese (non-operating partner) operators have inherited decommissioning liabilities which they had not previously anticipated. Consequently, there has been great interest in the project.”


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