Australia

Petrofac, a leading provider of services to the global energy industry, has received a major decommissioning contract by the Australian Government, which has kickstarted decommissioning services in the country’s offshore oil and gas sector.

The contract, awarded by the Federal Department of Industry, Science, Energy and Resources, follows a strict selection and due diligence process by the Government of Australia. The value to Petrofac of Phase 1 has the potential to be up to AUD$325mn (US$236mn).

Petrofac’s Australia team based in Perth, has been contracted to complete Phase 1 of the decommissioning of the Northern Endeavour FPSO (Floating Production, Storage and Offtake) facility.

The contract sees Petrofac as Outsourced Operator responsible for decommissioning and disconnection of the FPSO from its subsea equipment, and temporarily suspending the wells. Disconnection of the FPSO is likely to occur over the period of 18 months. Petrofac’s scope includes the provision of its unique integrated services, working with both local and global suppliers.

The Northern Endeavour is a 274-metre long FPSO facility, currently not producing oil, moored between the Laminaria and Corallina oil fields about 550 kilometres northwest of Darwin in the Timor Sea.

Speaking about the company’s long-term ambitions in the country, Josie Philips, Petrofac’s Regional Director, Australia, said, "This contract builds on 15 years of working in Australia and is further proof of our growing ambitions. A critical element will be upskilling the local workforce to meet the challenges of billions of dollars of decommissioning work in Australia now and in the future. It is Petrofac’s aim to be a local company, growing local jobs, local skills and the local supply chain. I’m delighted that we have Monadelphous and Linch-pin already on board."

Nick Shorten, Chief Operating Officer for Petrofac’s Asset Solutions business, said, “This contract recognises our unmatched decommissioning credentials, as the only tier one contractor with the in-house capability to manage all well and asset decommissioning phases. The contract builds on our existing track record for delivering well operator and project management services for clients globally.”

Together Petrofac and its supply chain partners, including Monadelphous and Linch-pin, will ensure the safe and cost-effective removal of the FPSO from the field in accordance with good industry practice. All activities will be done in close consultation with the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) to ensure strict safety and environmental protections.

D&A Aus 2022

From 10-11 May, the first ever Decommissioning and Abandonment conference will be arriving in Perth, Australia to provide the offshore community with the best blueprint for the wave of decommissioning projects on the horizon. For more information, download the brochure here: https://offsnet.com/da-aus/conference-brochure

Or contact:

Erin Smith

Global Accounts & Australasia Regional Manager

Offshore Network

t: +64 289 900 118

e: This email address is being protected from spambots. You need JavaScript enabled to view it.

Xodus, a global energy consultancy, has been awarded the Rigid Pipeline Non-Metallic Component Characterisation study for National Energy Resources Australia's (NERA) National Decommissioning Research Initiative (NDRI).

Alasdair Gray, Late Life and Decommissioning Lead at Xodus, made the announcement on LinkedIn, commenting, “Understanding of the chemicals used within non-steel components of rigid pipelines is one of the most significant knowledge gaps for the Australian oil and gas industry. This information is critical to understanding the long term impact of structure degradation within the marine environment, to improve the accuracy of decommissioning plan development and subsequent Environment Plan submissions.

“Xodus are well placed to undertake this work through our world class, integrated Engineering and Environment offering, working with Andrew Taylor and Jason Christie to deliver this scope which focuses on pipeline coating characterisation. This study is an important step in addressing how the region will make future decisions about assets reaching end of life.”

Gray added that the company has already started work on the project which is expected to be completed mid-2022.

D&A Aus 2022

From 10-11 May, the first ever Decommissioning and Abandonment conference will be arriving in Perth, Australia to provide the offshore community with the best blueprint for the wave of decommissioning projects on the horizon. For more information, download the brochure here: https://offsnet.com/da-aus/conference-brochure

Or contact:

Erin Smith

Global Accounts & Australasia Regional Manager

Offshore Network

t: +64 289 900 118

e: This email address is being protected from spambots. You need JavaScript enabled to view it.

Woodside Energy Limited has awarded DOF Subsea Australia retrieval of Enfield XT and offshore support services.

The campaign will involve the recovery of 18 subsea XTrees, 18 flowbases and associated spool sections, one wellhead severance and recovery of up to 18 temporary guide bases at the Enfield Field, Australia. The contract includes project management, engineering, fabrication, and decommissioning services and is expected to be undertaken in Q3 and Q4 2022, using DOF Subsea’s MPSV Skandi Hercules.

Mons Aase, CEO of DOF Subsea AS, said this is a substantial contract award. "It builds on successful campaigns delivered in the past for our client and grows our decommissioning track-record in the APAC (Asia-Pacific) region. We look forward to working with Woodside Energy Limited to deliver a safe and efficient project."

D&A Aus 2022

From 10-11 May, the first ever Decommissioning and Abandonment conference will be arriving in Perth, Australia to provide the offshore community with the best blueprint for the wave of decommissioning projects on the horizon. For more information, download the brochure here: https://offsnet.com/da-aus/conference-brochure

Or contact:

Erin Smith

Global Accounts & Australasia Regional Manager

Offshore Network

t: +64 289 900 118

e: This email address is being protected from spambots. You need JavaScript enabled to view it.

Shelf Subsea have announced that the Southern Star, DPIII Saturation Diving Vessel, has arrived in New Zealand waters to commence work on phase 2 of the Tui decommissioning project.

The New Zealand Ministry of Business, Innovation and Employment (MBIE) awarded the contract to Shelf Subsea for the removal of the subsea infrastructure from the Tui Oil Field (phase 2 of the decommissioning process). This is the next step in the decommissioning of the field after the disconnection and demobilisation of the FPSO Umuroa was completed in May 2021.

The Southern Star, a 112m vessel with a 150t AHC crane, 1000m of back deck and installed WROVs. It arrived in New Zealand after encountering some poor weather, which was easily overcome.

Shelf Subsea noted that it is the most advanced DSV operating in the Asia Pacific region and comes with Port and Starboard SPHLs for greater driver safety and more efficient operations in blow-on, blow-off scenarios. As demonstrated on the journey over, the vessel handles exceptionally well in challenging weather conditions providing a stable platform for subsea intervention work.

Expanded remedial direction provisions for offshore petroleum titles, referred to as trailing liability, came into effect on 2 March 2022.

These expanded the Government of Australia’s powers to call back titleholders, former titleholders, related bodies corporate, and related persons of current or former titleholders, to perform remedial work on offshore assets if required. The provisions apply to titles as they existed on or after 1 January 2021.

The strengthened provisions ensure that the risks and liabilities of petroleum activities remain the responsibility of the petroleum industry. Trailing liability is intended as an option of last resort and is expected to be used rarely. The primary obligation to decommission remains with the current titleholder.

The Government has now released the trailing liability for decommissioning of offshore petroleum property guideline which will help to understand the scope of the trailing liability provisions and provides general information on how these provisions may be applied.

Find the guide here: https://www.industry.gov.au/data-and-publications/trailing-liability-for-decommissioning-of-offshore-petroleum-property-guidelines

D&A Aus 2022

From 10-11 May, the first ever Decommissioning and Abandonment conference will be arriving in Perth, Australia to provide the offshore community with the best blueprint for the wave of decommissioning projects on the horizon. For more information, download the brochure here: https://offsnet.com/da-aus/conference-brochure

Or contact:

Erin Smith

Global Accounts & Australasia Regional Manager

Offshore Network

t: +64 289 900 118

e: This email address is being protected from spambots. You need JavaScript enabled to view it.

To ensure planning and management of increased levels of decommissioning activity, the Australian Government has made changes to the offshore oil and gas decommissioning framework.

These enhancements were made after extensive consultation with the public, industry and regulators. The first of a suite of measures will come into force on 2 March, 2022. The updated guidelines will assist the offshore oil and gas industry to understand and comply with the changes. The measures will strengthen and build on existing provisions in the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act) and regulations.

Policy, legislation and regulatory enhancements cover three themes – financial oversight, planning and management, accountability and trailing liability. Work is on to implement enhancements to the decommissioning framework over the coming years.

Changes to the legislation

The first stage of implementation included legislative amendments. The Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Act 2021 (Titles Administration Act) gives effect to key measures of the enhanced decommissioning framework. It also implements relevant recommendations from the independent Walker Review into the administration and liquidation of Northern Oil and Gas Australia.

The Titles Administration Act increases oversight of changes in titleholder control, expands existing trailing liability provisions, increases regulatory scrutiny of the suitability of companies operating, or looking to operate, within Australia’s offshore petroleum regulatory regime and expands information-gathering powers.

To give full effect to the changes in titleholder control and trailing liability measures, amendments were made to The Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003 (Levies Act) and Regulations under the OPGGS Act and the Levies Act.

Under these amendments, a person who receives a remedial direction will need to comply with the same regulatory requirements as a titleholder. This includes environmental management and safety requirements. The amendments also include changes that enable the regulator and titles administrator to recover the costs associated with administering these measures. This means anyone receiving a remedial direction or applying for a change in titleholder control will need to pay associated levies and fees.

D&A Aus 2022

From 10-11 May, the first ever Decommissioning and Abandonment conference will be arriving in Perth, Australia to provide the offshore community with the best blueprint for the wave of decommissioning projects on the horizon. For more information, download the brochure here: https://offsnet.com/da-aus/conference-brochure

Or contact:

Erin Smith

Global Accounts & Australasia Regional Manager

Offshore Network

t: +64 289 900 118

e: This email address is being protected from spambots. You need JavaScript enabled to view it.

The Australian Securities & Investments Commission (ASIC) has taken note of the additional US$239mn that Woodside Petroleum Limited (Woodside) has provided for its decommissioning requirements.

In its financial report for the year ended 31 December 2021, Woodside estimated that the extra costs would primarily come from the removal for rigid plastic-coated pipelines.

ASIC continued that Woodside has also improved its disclosure of the basis to provide for future restoration costs. This includes disclosing the types of offshore and onshore infrastructure assets for which full removal has been provided; that full removal has not been provided for certain pipelines and infrastructure, parts of offshore platform substructures, and certain subsea infrastructure; and an indication of the additional costs if certain items for which full removal has not been provided for are not exempted from full removal by The National Offshore Petroleum Safety and Environmental Management Authority.

Although acknowledging the extra capital that was being observed, ASIC, as part of its financial reporting surveillance programme, also raised concerns about the offshore infrastructure assets that were not included for full removal in the restoration provision in Woodside’s financial report for the year ended 31 December 2020, and the adequacy of related disclosures. ASIC said that it is continuing its inquiries about why Woodside did not allow for the full removal of certain infrastructure assets in its financial report.

D&A Aus 2022

From 10-11 May, the first ever Decommissioning and Abandonment conference will be arriving in Perth, Australia to provide the offshore community with the best blueprint for the wave of decommissioning projects on the horizon. For more information, download the brochure here: https://offsnet.com/da-aus/conference-brochure

Or contact:

Erin Smith
Global Accounts & Australasia Regional Manager
Offshore Network
t: +64 289 900 118
e: This email address is being protected from spambots. You need JavaScript enabled to view it.

Esso Australia, a subsidiary of ExxonMobil Australia, has entered into a multi-year agreement with DOF Subsea to charter a Multi-Purpose Supply Vessel for the support of its decommissioning activities in Bass Strait.

Dylan Pugh, ExxonMobile Australia Chair, said that the subsidiary is committed to safely decommissioning the Bass Strait offshore facilities and over the last few years has completed around US$600mn of early decommissioning works in the strait, including removing the Seahorse and Tarwhine facilities, completing P&A activities on Blackback and Whiting wells, and making significant progress on Kingfish B and Mackerel.

“As we continue to progress these important, early decommissioning works, we are also planning for the eventual decommissioning of our facilities that are to cease production in the near future,” Pugh commented.

The DOF Subsea vessel is expected to arrive in Bass Strait in the middle of 2022 where it will support early decommissioning works on the Perch and Dolphin facilities before moving onto other topside and subsea work scopes.

Pugh added, “We continue to assess new projects in Bass Strait with the aim of extending our production of Gippsland gas into the next decade.”

“Just last year we commissioned West Barracouta, one of the largest domestic gas projects this decade. As it showed, there is still potential left in Bass Strait and we are working hard to unlock its full value so we can continue to deliver the gas Australians need.”