Revised abandonment laws impose advance broadcasts on licensees

New abandonment legislation has been passed by Norway's Storting and will come into effect as part of a new petroleum law on 1 July. The measures give further shape to the country's body of abandonment legislation, which is developing as its experience with abandonment develops. Some changes have been made to previous provisions, but these contain no great surprises. The fundamental principle of keeping all options open and deciding each case on its merits is maintained, according to

Onshore disposal of the North-East Frigg facilities enabled Elf to end it's liability.

New abandonment legislation has been passed by Norway's Storting and will come into effect as part of a new petroleum law on 1 July. The measures give further shape to the country's body of abandonment legislation, which is developing as its experience with abandonment develops. Some changes have been made to previous provisions, but these contain no great surprises.

The fundamental principle of keeping all options open and deciding each case on its merits is maintained, according to Trond Kubberud, an adviser on abandonment matters in the Oil and Energy Ministry.

One provision which has already proved to be influential is the requirement for licensees to retain responsibility for decommissioned installations left in the sea. This responsibility can be transferred to the state, but only if a satisfactory agreement can be reached.

The state also has the right to take over installations where operations have ceased or the license has expired, but no such case has yet arisen.

Had Esso persisted with its original plan to topple the Odin jacket, it would have had to take on the responsibility for it. When this became clear, it was willing to accept the eventually approved alternative of bringing the jacket back to land. Once the jacket is disposed of - it was being removed in February and March - its responsibility ends.

In time, Norway may come to adopt some kind of insurance scheme - a foundation is one idea which has been proposed - which would take on this liability in exchange for payments by licensees, Kubberud says.

Licensees are now required to submit an abandonment plan two to five years before either the end of field life or the license expiration date. Previously they were given until up to two years after the cessation of production.

The idea is to allow the plan to be approved by the time of cessation of production. However, the law is flexible on this point, and if it proves impracticable to reach approval by this time, an extension will be granted.

Flexibility is an important matter, in Kubberud's view. One should be careful not to make legislation prematurely, but to let it develop in the light of experience, he says. The flexibility should be such as to allow the best solution to emerge.

Some flexibility will have to be shown in the case of Phillips, which has already announced its intention of closing down a number of platforms in and around Ekofisk starting next year. When the new law comes into effect, it will be given its own timetable for submitting a plan, Kubberud says.

Plans must be properly costed and must include assessment studies of the impact of the proposed method on the environment and other users of the sea, an assessment of the safety implications, and so on. These studies are made public and comments are invited from interested parties. This degree of public consultation puts Norway at the more open end of the international spectrum of abandonment planning.

As abandonment on fields in which the state has a stake involves public spending, these plans must be approved by the Storting. This was not the case for Esso's Odin facilities, but as Esso's was one of the first plans to be submitted, it also went to the Storting.

In a few years' time, Kubberud thinks, the lower-cost projects may well be left to the government to decide, as has already happened with lower-cost development plans.

There is as yet no legal provision on what will happen to pipelines. Instead the Storting has approved a government proposal to carry out a three-year research program to decide what options are to be applicable under what circumstances.

An open seminar was held last year in which ideas were culled from interested parties. By this spring the contents of the research program should be worked out, after which a tender will be held for its implementation. The program is likely to concentrate mainly on the consequences of leaving pipelines in place, Kubberud says.

On the international front, Norway is maintaining its opposition in bodies such as Ospar to any attempts to force it to accept a ban on dumping. It is not a good idea for countries not involved in offshore oil and gas activities to try and force measures on to countries that are, Kubberud says. Given the big differences in types of platforms, and the technical difficulties in removing the large platforms, case-by-case consideration is the most sensible policy, in his view.

Nevertheless Norway has taken on the lead role in the work of Ospar's Seba sub-committee with a mandate to lead the search for areas in which international consensus could be reached. It might be possible to have an agreement on all floaters, or all subsea templates, being recycled, Kubberud says.

But it will not be possible to take any decisions in this respect until the Ospar ministerial meeting which has now been put back from June until September.

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