Decommissioning Of Gas And Oil Offshore Structures Case Solution & Answer

Decommissioning Of Gas And Oil Offshore Structures Case Solution


Although the offshore oil and gas industry has a responsibility to protect biodiversity as part of upstream exploration and development, there are few guidelines for the conduct of decommissioning activities. In addition to protecting the environment, decommissioning activities must be carried out efficiently, safely, and environmentally. It is important for the industry to consider the impact of these activities on the biodiversity of the area(Wang X. Z., 2019). There are numerous factors that may have an impact on the ecosystem, including the type of species that live there.

Offshore oil and gas decommissioning activities may affect the diversity of the environment in two ways: during and after the process. Direct impacts can be mitigated through mitigation measures, while indirect impacts are difficult to quantify(Judge, 2019). While direct impacts may involve the destruction of habitat, indirect impacts may alter local food webs, which can create a bottom-up or top-down feedback loop. Therefore, understanding the effects of decommissioning operations on biodiversity is vital to the success of the process.Offshore oil and gas decommissioning projects may cause impacts to biodiversity. The effects can occur during and after decommissioning. The direct impacts can be mitigated through mitigation measures, but indirect impacts can be difficult to quantify because they involve changes to local food webs and ecosystems(Topham E. M., 2019). Furthermore, the effects can be irreversible, resulting in long-term, negative impacts. By properly addressing environmental issues and biodiversity concerns, companies can reduce their risk and protect their reputation(Judge, 2019).

While the impact on biodiversity from offshore oil and gas decommissioning can be mitigated through the use of mitigation measures, these studies often focus on the hard substratum and do not consider the impact on aquatic ecosystems(Methratta, 2019). Observational studies will help us better understand the faunal assemblages supported by the oil and gas infrastructure and can predict how they are affected by its removal. In a recent study, a small structure that was decommissioned from an oil field in the North East Atlantic was found to have a high biomass of aquatic organisms and a high diversity of invertebrates(Fowler, 2020).

Indirect effects on biodiversity from offshore oil and gas decommissioning can be mitigated by mitigation measures(Fazeres-Ferradosa, 2019). These measures should include mitigation measures. Indirect impacts on biodiversity can include the loss of habitat or the regrowth of invasive species. Further, the impact on the habitats of marine animals will depend on the nature of the surrounding ecosystem(uit het Broek, 2019). The potential loss of species will increase the costs and the overall cost of the process.

Gas and Oil Decommissioning In UK and Australia

The pace of abandonment of stranded offshore oil and gas reserves is accelerating and more countries will need to review their legal frameworks for oil and gas decommissioning(Hodgkinson J. H., 2018). Governments will be looking to other jurisdictions for guidance, and failure to do so could mean a large bill for taxpayers and awkward questions about what to do with abandoned facilities. In this context, the UK and Australia are likely to be important benchmarks(Ioannou, 2018).

The government of the UK and Australia is working on legislation that will improve decommissioning practices in the UK and Australia. The new legislation will increase the scrutiny of asset sales, and ensure the new owner has the capacity to complete the project. It will also introduce a new concept called trailing liability, which is modeled on the UK’s North Sea decommissioning regime and holds former owners of assets responsible for their decommissioning(Sun, 2019). Selling aging offshore fields has been common practice across the world, particularly in the North Sea and the U.S. Gulf of Mexico, and has become standard in Australia and the UK.

The UK and Australian governments’ policies are likely to affect decommissioning in their countries. Although decommissioning has many benefits, there are few economic and social benefits. In the UK, for example, the Buchan floating production facility provided 35 jobs, but left nothing(Robak, 2018). Furthermore, decommissioning drains public money, and the Government is yet to comment on any alternatives. However, the UK government has announced that it will consult on draft legislation in December, in order to ensure the integrity of offshore infrastructure.

The Australian government is working on new legislation that allows oil and gas infrastructure to be repurposed, creating artificial reefs, and reducing the cost of decommissioning. Regulatory frameworks allow this, and the Government is committed to providing support for the new scheme. In the UK, the government has set a target of cutting the costs of decommissioning by 35% by 2022, and has already achieved 19% of the reduction(Topham E. G., 2019).

While the oil and gas industry has been buoyed by a strong recovery in oil prices, it is also facing increasing pressure from environmental campaigners and investors. A shift away from fossil fuels could accelerate the closure of oil fields and bring on decommissioning costs sooner than expected(Sedlar, 2019). Currently, both governments have no alternative legislation, and the negotiations with the industry are ongoing. The government is not commenting on the alternative proposals, but plans to consult on draft legislation before the end of the year(Kirchgeorg, 2018).The UK and the US governments’ respective laws have very different responsibilities for oil and gas development and decommissioning. In the UK, a section 29 notice, issued by the government, requires the license holder to present a detailed plan for the process(uit het Broek, 2019).The changes are also a significant step forward for the industry in the UK and Australia. Changing the laws for the oil and natural gas sector is vital for the economy. There are no clear regulations in place in the UK, but the new laws will help the industry get back on track.Both countries have adopted a stringent regime for decommissioning in the UK and have imposed stricter requirements on former license holders(Hannon, 2019). The Australian government’s new laws will help oil and gas companies to make sure that their obligations are fulfilled. It also wants to ensure that the process goes smoothly in the UK.

Evaluation of Gas and Oil Decommissioning: Recent Practices

The CNRI engaged BMT Cordah, a global consultancy firm, to provide environmental support and facilitate the comparative assessment process(Jensen, 2020). Using a range of criteria and sub-criteria, the assessment procedure narrows down the alternatives and provides a clear ranking. It takes into account the full range of contributing factors, and it is accessible to all stakeholders, including oil and gas companies, government agencies, and industry associations(Syed, 2020).Recent policy reports have reported that decommissioning costs range from $27,000 to hundreds of thousands of dollars per well. However, the estimates are subject to considerable variability, and many factors affect the cost of decommissioning. One such study by Ho et al. (2004) expanded the data set by three states and included data from nearly 7,000 additional wells. It also quantified key well characteristics, such as the number of wells and size…………………………….

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