Offshore decommissioning

A platform is not meant to stay. The OSPAR Convention, in Decision 98/3, prohibits as a rule leaving an end-of-life offshore installation at sea, and requires its removal. In the United Kingdom, the Petroleum Act 1998 makes those who profited pay: the state serves the obligation on the operator, the licensees and their associated companies, jointly and severally liable for the whole bill, and it can come back to a former licensee after a sale. A company that sold its share in 2005 may receive a claim in 2025 if the buyer has become insolvent. Hence the decommissioning guarantee: partners provide a bond, a letter of credit or a letter of guarantee to secure future payment. Decommissioning security agreements organize these guarantees among the parties. For insurers, decommissioning is a high-risk job: lifting structures of several thousand tonnes, cutting, towing, with a pollution risk as wells are pulled. Well control remains until the final plug, which ties this entry to making the well safe. Costs are uncertain and often overrun estimates, which holds the surety market back: a commitment whose amount is known only at the end. Not to be confused with dismantling a nuclear plant, subject to other regimes.