Esso Australia has spent more than US$2.5bn in early decommissioning works in the Bass Strait so far as it dismantles infrastructure in the area — with the Barry Beach Marine terminal as integral to future work as it was in the establishment of the region’s offshore industry decades earlier.
The spend so far includes the permanent plug and abandonment of more than 200 wells, according to Richard Perry, a project manager for the company.
“This work will continue through to 2027, when we will then be ready to decommission by removing the platforms and transporting them to shore for dismantling and recycling,” he wrote in a recent update.
The group’s work in the Bass Strait represents perhaps Australia’s biggest decommissioning project.
The Strait is home to 19 offshore platforms that have produced oil and gas that has played a vital role in powering Australian homes and businesses and supported the nation’s energy security since the late 1960s.
Today, it supplies much-needed gas to south-east Australia from only six of these facilities.
“While ongoing investments will see us maintain our reliable supply of gas from Bass Strait into the 2030s, we are also decommissioning the 13 offshore facilities that are no longer producing oil and gas,” noted Perry.
However, decommissioning an offshore platform is a complex, multi-stage process, he added in a community outreach note.
“It begins with well plug and abandonment, which permanently seals the wells underneath the platform that have provided access to the oil and gas resources below the seafloor. Some of our platforms have up to 37 wells, while others have only a few. We then carry out essential maintenance including cleaning and disconnecting all pipelines from the platform.”
The Pioneering Spirit, the world’s largest construction vessel, will cut, lift and transfer the topsides and jackets from offshore platforms, onto barges for transport to the Barry Beach Marine Terminal, where they will be offloaded for dismantling and recycling.
For nearly 60 years, the terminal has played a central role in supporting Esso Australia’s Bass Strait operations, and will continue to do so as the emphasis shifts to decommissioning.
“The terminal has played a critical role in our safe completion of over US$2.5bn in early decommissioning works, including the permanent plug and abandonment of more than 200 offshore wells,” said Perry.
That incudes the safe recycling and disposal over 10,000 tonnes of steel and concrete at the terminal — around as much as the Eiffel tower weighs.
“As we move into the next phase of decommissioning, the terminal will continue to serve as our primary marine base, supporting both ongoing gas production and the safe, environmentally responsible and efficient removal of offshore infrastructure.”
Decommissioning activities can be complex and challenging, and unexpected costs can often arise.
This is illustrated by some of the challenges faced by Woodside, which is currently executing multiple complex decommissioning activities offshore Australia. In its Q2 2025 report it outlines progress in the quarter.
“We successfully completed the plugging of the Minerva and Stybarrow wells. Removal of other equipment at the legacy Minerva, Stybarrow and Griffin assets has been impacted by unexpected challenges, with further engineering and alternative solutions required. Whilst this has had some cost impacts, we are applying learnings to improve planning and execution,” said Woodside CEO Meg O’Neill.
The company successfully completed the plug and abandonment of the three remaining wells at the Minerva field, offshore Victoria, as well as concluding the 10-well Stybarrow plugging campaign. It recovered around 45% of the Minerva pipeline across State and Commonwealth waters. However, activities had to be suspended due to challenges to pipeline recovery and adverse weather conditions, with recommencement depending on vessel availability.
Woodside continued decommissioning activities in the Bass Strait, including the submission of environmental approvals and plugging of 22 wells.
The company is currently evaluating decommissioning work plans for Minerva, Stybarrow and Griffin.
“The as-left condition on some closed sites has continued to present challenges for safe and efficient execution of decommissioning,” the company said, adding that these challenges have pushed up spend and cost estimates.
O’Neill said the company continued to demonstrate operational excellence and world-class project execution over the second quarter, with a focus on driving future growth and value.
On its website, Woodside underlines its commitment to executing decommissioning activities with a focus on safety and the environment, coupled with efficiency. “Decommissioning is integrated into project planning and operations, from the early stages of development through to the end of field life. This includes conducting assessments to inform our planning and decision making, which is underpinned by science and marine research. In the developing regulatory environment, we continue to listen, learn and respond to our stakeholders, while expanding our global decommissioning experience,” the company says.
Woodside’s decommissioning approach recognises the importance of reusing and recycling material from its decommissioning activities where possible. Its waste mitigation hierarchy prioritises reduction, reuse, recycling, and treatment over disposal.
Two separate environmental incidents linked to ageing offshore assets off Western Australia (WA) could trigger further scrutiny into the industry’s decommissioning actions.
It follows revelations by independent news outlet, Boiling Cold, that Chevron had detected gas leaking at a recently-closed site on Barrow Island, which is now set for decommissioning, an article that was subsequently picked up by ABC News.
The US-based oil and gas giant ended production at the site, which sits 50 km north west of Karratha off the Pilbara coast, in mid-May.
A Chevron spokesperson later confirmed the leak to Boiling Cold.
“As part of detailed planning for the decommissioning of WA oil infrastructure, data analysis has indicated an environmental risk from the subsurface migration of hydrocarbons, primarily gas, to groundwater and the surface,” the spokesperson was quoted as saying by the independent news outlet, and later by ABC.
“We have informed relevant regulatory agencies, and we will work with them to develop a comprehensive investigation programme.”
The Department of Mines, Petroleum and Exploration is still investigating the leak, the ABC report added.
The incident follows a separate oil spill in May from facilities at Woodside’s Griffin field, about 58 km north-west of Exmouth, which is also set for decommissioning.
The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) is still investigating the spill.
The ABC report also cited Denise Fitch, chairperson of the environmental non-profit Cape Conservation Group based in Exmouth, questioning the industry’s commitment to the decommissioning process.
“There's no trust in their being capable of preventing oil spills,” she was quoted as saying by ABC.
“There have been, even in the last 12 to 18 months, a number of incidents where there have been spills and where decommissioning has caused issues or hasn't been done properly.”
Modern American Recycling Services Europe (MARS) has been named as the contractor to recycle Australia’s Northern Endeavour floating production storage and offtake (FPSO) vessel.
“MARS best meets the Australian government’s aims for completing this important decommissioning work,” the Department for Industry, Science and Resources said in a statement.
“We contracted MARS following a global, competitive open tender. Under the contract, MARS will recycle the FPSO and manage the waste streams, including hazardous waste. The priority is for MARS to complete the work to high safety and environmental standards and meet all Australian and international requirements.”
China’s COSCO Shipping Heavy Transport will first dry tow the FPSO to Denmark using its semi-submersible heavy transport vessel, the Hua Rui Long.There are no purpose-built facilities in Australia equipped to recycle a vessel as large and complex as the Northern Endeavour FPSO.
MARS will then complete the recycling at its ship recycling facility in Frederikshavn.
“This purpose-built facility has the capacity to recycle the Northern Endeavour FPSO and meets the European Union’s Ship Recycling Regulation,” the Department noted.
This regulation aims to prevent, reduce and minimise accidents, injuries and other negative effects on human health and the environment when recycling ships.
The Department added that recycling of the FPSO accounts for less than 2% of the overall cost of the Northern Endeavour decommissioning programme.
Australia is keen to generate work and opportunities for its domestic industry arising from the growth of the decommissioning sector.
“While the FPSO recycling will happen overseas, there will be ongoing opportunities for Australian industry involvement in the Northern Endeavour decommissioning programme,” the Department statement noted.
Procurement opportunities for the remaining work, on Phases 2 and 3, will be available to local firms.
Phase 2 focuses on permanently plugging the Laminaria and Corallina wells, while Phase 3 focuses on removing remaining subsea infrastructure, recycling and waste management.
The Centre for Decommissioning Australia (CODA) has launched three Special Interest Groups (SIGs) on hazardous materials management, well abandonment and decommissioning project management to support industry and stakeholder collaboration on priority decommissioning challenges and opportunities.
Established in response to industry feedback, these inaugural SIGs are designed to provide a forum to deepen engagement across the sector and support knowledge sharing, capability development, and integrated approaches. Each group is guided by a committee drawn from industry participants, and supported by a CODA representative. Meetings are held approximately every two months and focus on reviewing developments in the SIGs' focus areas, sharing insights, and identifying opportunities for collaboration.
The SIGs are as follows:
Focusing on best-practice hazardous materials management and lifecycle approaches to contaminants commonly encountered during decommissioning. The group will work to strengthen links between operators, the supply chain, regulators, and industry bodies, while promoting education, sharing of experience, and diverse perspectives.
Promoting safety, innovation, and efficiency in support of sustainable, world-class well P&A operations in both onshore and offshore contexts. Current areas of focus include:
• Improved approaches to regulator engagement and barrier technology qualification
• Establishing an independent industry body that can act as a conduit for and accelerator of new ideas and alternative approaches
• Alignment of offshore and onshore industry sectors to foster cross-learning and explore lower cost verification and testing environments
• Broader knowledge sharing and stakeholder engagement
Exploring challenges and opportunities in planning and executing decommissioning projects, drawing from global and local experience. Focus areas include:
• Benchmarking cost and schedule
• Contracting strategy
• Risk management and regulatory engagement
• Approaches to managing decommissioning market volatility
Membership is currently open to personnel from all CODA Partners, with several organisations already involved.
Experts from law firm Pinsent Masons have highlighted the challenges and opportunities arising from decommissioning activities in Australia.
Senior Associate Angus Frean, an energy and infrastructure specialist said, “Offshore decommissioning campaigns are incredibly complex.
“They involve lining up availability of highly specialised vessels, specialist subcontractors and equipment and port access while also navigating the logistical issues arising from the vast distances involved and work constraints arising from offshore conditions.
“Any disruption on a decommissioning campaign is likely to result in significant delays and, potentially, be very costly.”
The infrastructure can also be a long way offshore, increasing the risk of bringing contaminants from those areas back and potentially harming the fragile Australian ecosystem.
In contrast, leaving equipment or infrastructure offshore requires consideration of the environmental impact that degradation of equipment and infrastructure can have over time.
Partner Florence Riviere, an expert in planning and environment law at Pinsent Masons, speaking at the recent D&A AUS 2025 conference, said, “Research and data of environmental impacts in Australian waters is still in its infancy, but it is a constantly changing landscape, with an increased interest and awareness about the environmental impact of offshore projects, including because of an increase in offshore wind projects.
“Environmental approvals for major offshore projects are likely to be under increasingly greater scrutiny, with further challenges to environmental approvals anticipated,” she said.
“It is essential that environmental plans and assessments, including consultation, are undertaken comprehensively and exhaustively, with an eye on recent legal and scientific developments.”
You can see the full article at: https://www.pinsentmasons.com/out-law/news/decommissioning-in-australia
Sapura Energy, which has been conducting work on Australia’s Northern Endeavour project, said it intends to extend its involvement in the decommissioning and abandonment (D&A) sector as activity grows.
The Malaysia-based group stated that it is realigning its engineering and construction segment “to meet evolving industry demands” across a range of geographical areas and industry niches.“
Through its joint venture, Kitar Solutions, the group also plans to grow its presence in decommissioning services, leveraging established expertise and client networks,” it noted.
The partnership between Sapura Energy and Kitar Solutions, also links up with expertise from AF Offshore Decom, which leverages two decades of North Sea decommissioning expertise, as well as bringing in strategic offshore and onshore assets suitable for decommissioning services in Australia and across the south-east Asia region and elsewhere.
Earlier this year, the light well intervention vessel, the Sapura Constructor, completed work in the Laminaria-Corallina oil fields covering well suspension and flushing, as part of the Northern Endeavour floating production storage and offtake (FPSO) vessel decommissioning programme.
The campaign, which started in September 2024, is being overseen by Phase 1 contractor Petrofac Facilities Management Limited.
Sapura Energy said it also intends to optimise the deployment of other assets, such as Sapura 3500 and Sapura 1200, in non-decommissioning work to regions with “higher market activity”, identifying Brazil as a key area of operation, with all six of its jointly-owned pipelay vessels operating under long-term contracts.
Work to decommission the Northern Endeavour in the Timor Sea is moving to the next phase after the floating production storage and offtake (FPSO) vessel was disconnected from the Corallina and Laminaria oilfields recently.
Australia’s Department for Industry, Science and Resources reported that the decommissioning programme had accomplished what it called a “significant milestone” following the disconnection of risers and umbilical pipelines that had connected the vessel to the oilfields for 26 years, a step that “reduces risk to people and the environment.”
The process has not been without its challenges though after the FPSO reportedly lost power, resulting in the evacuation of crew as a safety precaution, according to a number of media outlets.
It is understood that power has now been restored to the ex-Woodside vessel, which is located some 550 km northwest of Darwin.
Phase 1 contractor Petrofac Facilities Management Limited and multi-purpose vessel, Skandi Hercules, cut eight risers and lowered them to the seabed.
“Removing the connection between the FPSO and the wells means there’s no risk of oil leaking from the FPSO,” the Department noted.
“The disconnection marks an important point in the FPSO’s history since its initial connection to the subsea wells in 1999.”
Nine mooring chains keep the FPSO connected to the seabed, holding it securely in place.
Cutting the chains will be one of the final milestones before removal of the FPSO from the field, an operation scheduled for later in 2025.
The COSCO semi-submersible heavy transport vessel, Hua Rui Long — the third largest of its kind in the world — will eventually tow the FPSO to a facility for decontamination, dismantling and recycling.
Dry towing is deemed the safest and most reliable method to transport a vessel of this size and condition, according to the Department.
The Northern Endeavour FPSO is 274m in length and weighs over 43,000t.
Officials are still going through tenders to find a supplier to ultimately recycle the FPSO.
The offshore decommissioning market is forecast to grow from US$9.56bn in 2024 to US$15.4bn by 2032, at a CAGR of around 6.1% during this period, according to a new report from Wise Guy Reports
The offshore decommissioning market is seeing strong activity as ageing offshore oil and gas infrastructure reaches the end of its operational lifecycle. Increasingly stringent regulatory requirements, safety concerns, economic considerations and ESG commitments are among the other factors driving the market.
Key players are increasingly collaborating with environmental and engineering firms to streamline operations and minimise environmental impact. The market is also moving from traditional heavy-lift methods to more efficient, automated, and cost-effective solutions.
Technological advancements are having a strong impact on the decommissioning sector, the report notes. Remotely Operated Vehicles (ROVs) are widely used to inspect and dismantle subsea structures, reducing the need for human involvement and enhancing safety. Advanced vessels equipped with heavy-lift cranes and modular lifting systems allow for safer and more efficient removal of topsides and jackets. Companies are leveraging digital twin technology to simulate the decommissioning process, allowing better planning and execution while minimising operational risks. There is a growing emphasis on recycling and reusing decommissioned materials. Technologies are being developed to treat and dispose of hazardous waste in environmentally friendly ways. New methods for sealing wells are emerging, including resin-based and thermite plug technologies, which enhance sealing reliability and reduce long-term environmental risks.
“The global offshore decommissioning market, once seen as a financial liability, is now evolving into a specialised and profitable sector, offering lucrative opportunities for engineering firms, service providers, and environmental consultancies,” the report comments.
The risks and challenges are also highlighted. These include the high costs of the decommissioning process, often deterring operators from initiating timely projects unless strictly mandated. Navigating different regulatory environments across countries and regions adds complexity and uncertainty to project planning and execution. There is a shortage of specialised vessels, equipment, and skilled professionals capable of executing complex offshore decommissioning tasks. If not executed properly, decommissioning activities can cause environmental damage, including oil spills, disturbance to marine ecosystems, and improper disposal of waste.
“One of the key trends anticipated is the emergence of decommissioning hubs—strategic locations equipped with recycling and waste management facilities that serve as central points for multiple projects,” the report says. “Another trend is the rise of collaborative decommissioning models, where operators with adjacent platforms work together to share infrastructure, vessels, and project timelines to reduce costs.”
Abandoned oil and gas facilities are a significant source of methane emissions, according to the IEA’s recently-released Global Methane Tracker 2025.
IEA analysis suggests that the energy sector was responsible for around 145 Mt of methane emissions in 2024 – more than 35% of the total amount attributable to human activity. Oil operations were responsible for around 45 Mt, natural gas operations for nearly 35 Mt, and abandoned wells for around 3 Mt. An additional 2 Mt of methane leaked from end-use equipment.
Most properly plugged wells emit negligible amounts of methane. But if wells are not properly decommissioned and sealed, they can continue emitting methane for many years, through cracks, fissures and gaps. Most emissions result from wells that have recently been abandoned, which highlights how essential it is to plug and monitor wells that are no longer operational in a timely fashion.
The IEA notes that emissions from abandoned facilities are not given sufficient attention in policies and regulations. It argues that governments can play a critical role, for example by requiring close and decommissioning plans to incorporate measures to mitigate methane emissions. Here, a distinction need to be made between wells for which an operator is accountable and those for which no operator can be identified, ie “orphaned” facilities. In cases where an identified operator is responsible, governments can require operators to perform closure activities for assets being decommissioned, such as plugging and well integrity monitoring. Governments can require operators to set aside funds throughout the asset’s life to finance the decommissioning of abandoned wells.
In the case of orphaned wells, governments can inventory these facilities to identify the main methane emitters. The USA for example has established a programme to identify and inventory orphaned wells on federal lands, which includes measuring and tracking their methane emissions. Western Australia is among those jurisdictions which have undertaken similar inventories. While under the EU Methane Regulation, Member states are required to establish inventories of non-producing wells, identify responsible parties, and take action to mitigate any emissions by August 2025.
To reduce methane emissions from orphaned wells, governments can provide public funding for plugging and sealing. Closure projects could also be made eligible for carbon credits, allowing project operators to trade these credits on carbon markets, the IEA suggests, adding that fees collected from operational assets could help to finance closure activities.
Decommissioning Australia’s ageing oil infrastructure will not only be a test of the industry’s technical and engineering prowess – increasingly, it will also challenge its economics.
With the slump in oil prices undermining the finances of the major oil and gas companies in recent months, operators will need to work harder and smarter to meet stringent decommissioning objectives in the face of tighter spending constraints.
Oil prices have drifted downwards for the most part this year, at times below US$60 per barrel, squeezing budgets across the board.
Max Oppenheimer, Client Advocate - Energy at Miller Insurance, said this will test decommissioning activities across all major oil and gas production basins in the world.
Potentially, it could also trigger an acceleration in decommissioning work as operators seek to retire ageing, underperforming assets.
“Previous slumps in the oil price in 2014, and during the 2020 onset of Covid-19, impacted project economics and saw periods of accelerated decommissioning activity as operator’s sought to cold stack ageing assets to mitigate their losses,” Oppenheimer noted in a 9th May 2025 briefing posted on the company’s website.
“Prices are currently testing post-Covid lows, and risk managers may once again be faced with addressing decommissioning risk concerns sooner and on accelerated timescales.”
From an insurance perspective, Oppenheimer also outlined a range of claims scenarios that could arise from decommissioning activities and that should be considered by operators, as well as risk managers.
Australia may, however, be able to learn lessons from other major producing regions across the globe, he added, notably mature basins such as the North Sea.
“Decommissioning is a global challenge to the energy industry,” said Oppenheimer. “The greatest obligations currently reside in the North Sea basin, followed by Brazil and the USA.”
In the North Sea, a total of 22 fields ceased production during 2024, and up to 40% of currently producing fields could cease production by 2030 based upon current investment plans, or sooner if investment cases falter based on a lower crude outlook.
At the end of 2024, a backlog of 483 wells in the UK sector alone required plugging and abandonment activities, a number that could double to 2030.
“The UK challenge is particularly acute,” said Oppenheimer, “with annual decommissioning spend set to average in excess of US$3bn in the mid-term outlook.”
Australia recently agreed to work more closely with the UK in the area of decommissioning as the task becomes more pressing.
Global Underwater Hub (GUH) and Subsea Innovation Cluster Australia (SICA) signed a Memorandum of Understanding (MoU) in April to collaborate in the subsea sector, with a focus on areas such as decommissioning, as well as carbon capture.
At the time of the announcement, GUH Chief Executive, Neil Gordon, said decommissioning represented a “significant opportunity” in Australia, where the inventory of subsea assets to be decommissioned includes over 1,500 wells and structures and 4,500km of pipelines.
This would stimulate “major opportunities” for specialist plugging, cutting, inspection and recovery technologies, he noted.
Offshore contractor Allseas — which has been tasked with decommissioning work in the Bass Strait for ExxonMobil Australia — is expanding its fleet.
Its new cargo barge, Braveheart, which is being added to the fleet to boost flexibility for heavy lift campaigns, is now taking shape at the CIMC Changhong Shipyard near Shanghai in China.
Following official keel laying in April, the first of 145 huge steel blocks – together weighing a massive 26,000 tonnes – has been lifted into the dry dock for assembly, outfitting and painting.
At 200 metres long and 57 metres wide, it’s a close match to another Allseas barge, Iron Lady, but with key enhancements: a deeper operational draught, a full electric ballast system for faster load transfer operations and a significantly higher deck load capacity.
Together, Allseas’ trio of purpose-built cargo barges — Iron Lady, Braveheart and Bumblebee — will support the company’s platform removal and installation operations, delivering efficient topsides and jackets loading and transfer solutions to and from disposal yards.
The company has already started planning and preparation for what will be the largest offshore decommissioning assignment in Australian yet on behalf of Exxon subsidiary, Esso Australia Pty Ltd.
Allseas last year secured the contract to remove up to 12 retired platforms from the Gippsland Basin in the Bass Strait, with a combined weight of approximately 60,000 tonnes.
It plans to remove all the structures with another vessel, Pioneering Spirit — currently active in the North Sea — during an intense campaign beginning in late 2027.
Once safely removed, the facilities will be transferred to barges or vessels for load-in to the Barry Beach Marine Terminal in Victoria for dismantling and recycling by a separate onshore contractor.
In the meantime, Allseas is expanding its fleet with the Braveheart barge, which is expected to launch this September, with delivery scheduled at the end of 2025.
At the Chinese shipyard, the first construction phase in the dock focuses on the bottom section of the ballast pump room housing critical equipment.
Installing these blocks first allows the yard to immediately begin fitting the 1.5-metre diameter ballast pipes and four powerful ballast pumps, capable of moving nearly 10 Olympic-sized swimming pools' worth of water every hour.
Once this phase is complete, construction will move on to phase two: assembling the engine room.
Allseas also announced this month two further newbuild offshore construction vessels to enhance its fleet, to be built by Wuchang Shipbuilding Industry Group in China.
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