RGU Law School host AIPN Decommissioning Event

Robert Gordon University’s Law School hosted the Association of International Petroleum Negotiators (AIPN) event on Thursday 21st at the Sir Ian Wood Building where over 70 delegates were present to hear two fascinating insights into the Decommissioning market.

Entitled “Decommissioning of Offshore Petroleum Installations – A comparative view”, the event, which was hosted by Uisdean Vass – Head of Oil and Gas at Ledingham Chalmers, saw two presentations which compared decommissioning landscapes across several different geographical areas including Brazil, Malaysia and Africa and juxta-positioned this against what they may be able to learn from the experience of the UK and US supply chain.

The two presenters were Jim Christie – Director of Decide Wisely Ltd, a specialist Decommissioning Consultancy and Dr Leon Moller – Programme Leader for Oil, Gas & Renewable Energy Law at RGU.

Jim provided a very pragmatic high-level oversight into the global regulatory considerations and the international treaties and conventions that are in place for the UK, Brazil and Malaysia and framed the discussion with the overriding principle that “Decommissioning activities should not result in any harm to other users of the sea or to the environment.”

Dr Leon focused on regional frameworks and Exploration and Production contracts in Africa and explained how in many areas the legal and contractual landscape is very basic and so it is difficult to choose a decommissioning plan with associated funding arrangements, as  it unclear as to whether it will be a detailed regulatory regime or an investment friendly picture.

What is clear though, is that not many Oil and Gas producing countries have experience with decommissioning and therefore there will be commercial opportunities for UK based companies.

Jim highlighted that Brazil has over 40 facilities that have ceased production and 40% are due to stop over the next 5 years. Malaysia also has over 20 facilities that are due to be decommissioned within the next 5 years and Petronas have identified almost 200 facilities that are getting ready for decommissioning.

Dr Leon made clear there is an absence of effective legal requirements in many of the African regions, with unclear roles between the government regulator, industry and stakeholders and vague guidance on funding requirements. Couple this with a lack of dismantling and onshore scrapping facilities with a limited experience base and it is clear that there are many opportunities.

Outside of the USGC, the UK holds the most decommissioning experience and many of the regions mentioned are looking to the UK for guidance.

As a university, RGU have a long history of working with the Energy sector to help share insights and provide educational platforms that will benefit the local supply chain and this event was another great example.  

With representatives in attendance from several operators, the Q & A session was lively and engaging and rich with shared insights from the floor.

RGU look forward to hosting similar events in the future and encourage the local supply chain community to come along and become part of the discussion!