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Decommissioning With Abandonment

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Disposing of offshore installations has been a major concern of the petroleum industry for the last 25 years, as they increased in size and number. Tony Higginson, at Baker Botts, reviews the latest changes to the law governing decommissioning

Responsibility for removing abandoned offshore installations was addressed as long ago as 1958 in the Geneva Convention. The subject received growing attention in the 1980s and 1990s as reflected in the development of convention law. While recent use of floating production facilities may lessen the burden of decommissioning in the longer term, today there are around 450 offshore installations whose abandonment, or decommissioning, will provide practical challenges and raise serious environmental, safety and cost issues.

Geneva Convention

Article 5(5) of the 1958 Geneva Convention on the Continental Shelf provides that: “Any installations that are abandoned or disused must be entirely removed”. This convention remains in full force and binds the states that are party to it. But in relation to Article 5(5) states have taken the view that it no longer reflects customary international law, a view held since 1987 by the UK government.

It is argued that the 1958 convention must be interpreted in a way that is consistent with its object and purpose, which was to allow the exploitation of natural resources without unjustifiably interfering with other uses of the sea.

UN Law of the Sea Convention

The UN Convention on the Law of the Sea came into force in November 1994 and has been ratified by 135 states, including the UK, but excluding the US. Its provisions on the abandonment of installations have been accepted as representing customary international law, a view embraced by the UK government.

Article 60.3 provides that: “Installations or structures that are abandoned or disused shall be removed to ensure safety of navigation, taking into account any generally accepted international standards established in this regard by the competent international organisation. Such removal shall also have due regard to fishing, the protection of the marine environment and the rights and duties of other States”. The “competent international organisation” is the International Maritime Organisation (IMO), which in 1989, pursuant to a resolution of the IMO, issued Guidelines and Standards for the Removal of Offshore Installations and Structures on the Continental Shelf and in the Exclusive Economic Zone.

The IMO resolution recommends that member governments take the guidelines and standards into account when making decisions regarding the removal of abandoned installations. The latter provide that an abandoned installation must be removed “except where non-removal or partial removal is consistent with the following guidelines and standards”. The guidelines provide for the coastal state to consider each platform on a case-by-case basis and specify matters to be taken into consideration, including: the “effect on the marine environment”; “the costs, technical feasibility, and risks of injury to personnel”; and “the determination of a new use or other reasonable justification for allowing the installation ... to remain on the seabed.”

The standards provide for the entire removal of installations in water depths of less than 75 metres, or 100 metres for those installed after 1 January 1998, and weighing less than 4,000 tonnes (excluding the deck and superstructure), unless removal is not technically feasible, would involve extreme cost, or is an unacceptable risk to personnel or the marine environment. Installations in water depths exceeding 75 metres, or a weight of 4,000 tonnes need not be removed if they do not unjustifiably interfere with other uses of the sea. The standards also allow for partial removal, provided an unobstructed water column of 55 metres is left. The placement on the seabed of parts of an installation to create an artificial reef - as has occurred off the Florida coast to encourage fish breeding - is permitted, and all installations placed on any continental shelf or in an exclusive economic zone after 1 January 1998 are to be designed and built so that their entire removal is feasible.

Article 210 of the 1982 Law of the Sea Convention is also worth noting. This article requires states to adopt rules: “to prevent, reduce and control pollution of the marine environment by dumping”; to establish global and regional rules and procedures to prevent, reduce and control such pollution; and to adopt national laws no less effective than the global rules and standards. Dumping is defined to include any deliberate disposal of platforms and man-made structures.

The London Convention

The Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter was signed on 29 December 1972, following an inter-governmental conference held in London in the same year. It entered into force on 30 August 1975 and the IMO acts as the secretariat to the convention. Seventy-eight states have ratified or acceded to the convention, including Brazil, China, Denmark, the Netherlands, Norway, the Russian Federation, the UK and the US.

The London Convention applies to all seas, worldwide, and defines “dumping” as the deliberate disposal at sea of wastes or other matter (not incidental to normal operations) and of platforms and man-made structures. Article IV of the convention prohibits the dumping of “any wastes or other matter” except as specified in that article, which prohibits the dumping of hazardous substances specified in Annexe 1; permits the dumping of substances listed in Annexe II, on issuance of a special permit; and otherwise grants the appropriate national authority a right to issue a general permit for the dumping of other wastes or matter, subject to careful consideration of all the factors set out in Annexe III.

The latter, which covers platforms, includes: consideration of the practical availability of land-based disposal or treatment methods, and selection of a sea disposal site having regard to potential hazards to human health, harm to living resources and marine life, and damage to amenities and other legitimate uses of the sea. An analysis of the physical, chemical and biological composition of the waste, and the measurement of its quantity, must be carried out, appropriate disposal methods and conditions chosen, and a monitoring programme developed. Article IV of the convention shall not apply if dumping is necessary to secure safety or to avert a danger to human life.

1996 Protocol

Significant amendments to the London Convention were proposed in the 1996 Protocol, which supersedes the convention as between contracting parties that are parties to both the London Convention and the 1996 Protocol. However, by June 2001, only 14 countries had ratified the protocol - and 26 ratifications are required to bring it into effect. The UK has ratified, but the US, although a signatory, has not. The changes relating to the decommissioning of offshore platforms are:

  • The definition of dumping is extended to include “any abandonment or toppling at site of platforms, or other man-made structure, at sea, for the sole purpose of deliberate disposal”;
  • The 1996 objectives include “where practicable” the elimination of “pollution caused by dumping or incineration at sea of wasting or other matter”;
  • The 1996 Protocol embraces the principle that the polluter pays; and
  • The 1996 Protocol prohibits the dumping of any waste or other matter except for those listed in Annexe 1, and those matters listed in Annexe 1 require a permit. This is the most radical change to Article 4.

In Annexe 1, platforms, or other man-made structures at sea, are included, provided:

  • Materials capable of creating floating debris or pollution have been removed;
  • Dumping poses no serious obstacle to fishing and navigation; and
  • Materials containing levels of radioactivity exceeding exempted concentrations are not eligible for dumping.

A permit must comply with Annexe 2 and a contracting party should avoid dumping in favour of environmentally preferable alternatives, such as reuse, off-site recycling, destruction of hazardous constituents and land disposal.

The Ospar Convention

The Convention for the Protection of the Marine Environment of the North-East Atlantic (the “Ospar Convention”) was signed in Paris, in September 1992, and has been ratified by all of the 14 contracting parties to the 1974 Convention for the Prevention of Marine Pollution from Land Based Sources (the Paris Convention) and the 1972 Convention on the Prevention of Marine Pollution by Dumping from Ships and Aircraft (the Oslo Convention), and by Luxembourg and Switzerland. It entered into force on 25 March 1998. As its name suggests, on coming into force, it replaced the Oslo Convention and the Paris Convention.

The Ospar Convention defined dumping as including the deliberate disposal in the maritime area of offshore installations, but provided that such disposal does not include:

  • “The placement of matter for a purpose other than the mere disposal thereof”, which would cover, for example, the use of platforms as reefs for fish breeding; and
  • Leaving wholly or partly in place a disused platform, provided it is in accordance with the provisions of the convention and other relevant international law.

In other words, the convention, as originally drafted, recognised the right of toppling in situ and the IMO Guidelines and Standards, and the dumping, or leaving of a platform in place, provided the contracting party issued a permit – which it was to do on a case-by-case basis. Permits were prohibited if an installation contained substances hazardous to human health, living resources and marine ecosystems, or damaged amenities, or interfered with other legitimate uses of the sea. A contracting party intending to issue a permit for the dumping of an installation after 1 January 1998 was first required to inform the other contracting parties to allow prior consultation. The convention also applies to pipelines.

Sintra decision

Following a ministerial meeting of the Ospar Commission, held in Sintra, Ospar Decision 98/3 was adopted and issued on 23 July 1998, coming into force on 9 February 1999. The decision was the result of concerns arising from an attempt to dump, in deep water, the 14,500 tonne Brent Spar platform in 1995, and provided that the dumping, or leaving in place, of disused offshore installations is prohibited. The Decision allows contracting parties to derogate from that prohibition in respect of:

  • The footings of steel installations installed prior to 9 February 1999 and weighing more than 10,000 tonnes;
  • Concrete installations; and
  • Installations whose removal presents difficulties because of unforeseen and exceptional circumstances.

In granting a permit to dump, or leave permanently in place, an offshore installation in derogation of the prohibition, the contracting party must be satisfied that no alternative disposal or reuse option is available and to have consulted other contracting parties, as provided in Annexe 3, over the decision.

The decision went on to state that contracting parties will only use concrete installations when it is strictly necessary for safety or technical reasons. The Ospar commission committed to review the decision from time to time in the light of developments, with the objectives of reducing the scope of possible derogations. The decision does not apply to offshore pipelines.

The regional Ospar Convention is an important development, in that contracting parties require owners of offshore platforms in the North Sea to remove them at the end of field life. It reflects the concerns of the contracting parties and the desire to put in place more rigid requirements than imposed by the IMO guidelines, which previously applied. Although contracting parties have the discretion to issue permits for platforms falling within the derogation, it is only after being satisfied that alternative disposal is available. Since the Brent Spar incident, the UK government has only granted an abandonment consent for one large platform, Maureen. In July 2001, this platform was successfully removed and towed to a Norwegian fjord. While it is hoped it may be possible to reuse the platform on another offshore field, if that possibility does not materialise, it will probably be cut up and disposed of onshore.

Under the Ospar Convention, there are several large platforms, including concrete installations, to be decommissioned. It remains to be seen whether disposal solutions will be found, or whether permits will be issued to allow them to be dumped or left in situ. However, whether the more restrictive provisions of the Ospar Convention will be adopted in other international conventions is less than certain. From the lack of ratifications to the 1996 Protocol to the London Convention, it would seem unlikely. Outside the northeast Atlantic the case-by-case approach, based upon the IMO guidelines, appears to be the prevailing international legal standard for the foreseeable future.

This article refers to international conventions applicable to abandonment and decommissioning of offshore installations. There are also regional conventions that apply to decommissioning, but only the Ospar Convention is considered here, in view of its specific provisions and its application to the North Sea.

The international conventions and the domestic law of many states use the terms “abandonment”, “removal” and “disposal” rather than “decommissioning”. The latter is the preferred term of the industry, as it more accurately reflects the considered approach of dealing with a disused platform and avoids any connotation that the industry is abandoning its responsibilities.

 

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