The federal government will look to support the offshore decommissioning industry with the launch of its new Offshore Resources Decommissioning Roadmap.
The federal government will look to support the offshore decommissioning industry with the launch of its new Offshore Resources Decommissioning Roadmap.
Launched today by Resource minister Madeleine King, some $30 million will be invested to establish an offshore decommissioning directorate to coordinate and plan activities.
Also, part of the roadmap was a newly announced memorandum of understanding with the UK government to support investment flow and collaboration.
Complimenting this was the appointment of the former chief executive of the UK’s Offshore Petroleum Regulator for Environment and Decommissioning (OPRED), Wendy Kennedy, to the board of Australia’s National Offshore Petroleum Safety and Environmental Management Authority.
She brings with her more than 30 years’ leadership experience in offshore oil, gas, and environmental regulation – including having previously chaired the International Offshore Petroleum Environmental Regulators.
An intergovernmental agreement between the federal government and the WA government has also been finalised – aimed at streamlining decommissioning regulations.
It’s the first such intergovernmental agreement, with other states expected to follow.
Resource Minister Madeleine King said the program formed part of the Future Made in Australia plan and would support jobs creation in WA.
“With an estimated $60 billion of infrastructure in Australian waters to decommission, we cannot afford to miss this opportunity to grow a new industry right here in WA,” she said.
“Whether it is growing our offshore decommissioning industry or growing our critical minerals industry with production tax credits, this government has a plan to create new jobs and bring in new investment right here in Western Australia.”
According to the Australian Institute of Marine Science, by 2040, more than 2500 offshore oil and gas structures will cease operations globally and will require decommissioning at a cost of up to $US13 billion per year.
In Australia, a cost of $US40.5 billion is estimated, with well plugging and abandonment for at approximately 1000 wells, and more than 8000km of pipeline removal required.
Half of those activities will be off the WA coast.
Recognising this, CessCon Group - a global leader in offshore decommissioning - has announced its entry into the Australian market, establishing an Australiasian regional headquarters in Perth this year.
"Australia's decommissioning sector is at a critical crossroads," CessCon Group chief executive Lee Hanlon said.
"In regions like the North Sea, we've seen firsthand how the right decommissioning practices not only protect the environment but also create economic opportunities.
"Australia is just begining this journey, and we have the experience to support local operators in preparing for a safe, efficient and environmentally responsible decommissioning process."
Mr Hanlon said due to the long lead time of the decommissioning process, asset owners needed to act now.
"To ensure the highest chance of success, asset owners should collaborate with decommissioning experts during the late-life operational phase - ideally around five years before production ends."
Last year, Woodside announced it had awarded contracts for the decommissioning of subsea infrastructure at its Enfield, Griffin, Stybarrow and Echo Yodel oil and gas fields off the WA coast.
It has also disclosed its spending on decommissioning will increase from about $US500 million in 2023 to $US800 million in 2024, before falling back to about $US400 million in 2025.
Woodside’s quarterly investor updates now include progress reports on its decommissioning activities.
The latest update said the Ngurra RTM had been successfully transported to Perth to be cleaned and dismantled ready for recycling.
Chevron has also been active.
It completed onshore decommissioning at its Thevenard Island oil field last year, nine years after production ceased, and is due to commence onshore decommissioning of its Barrow Island oil facility next year.
