In PAA Series: Environmental Management – Decommissioning Part 2, we highlighted that, “The most significant steps in reducing adverse environmental influence are for the industry to take a proactive approach to managing operations and become educated about those activities that can potentially damage the environment. The proactive approach includes adopting an attitude of environmental responsibility not just to comply with regulations but to actually protect the environment while doing business.” [Mehdi Foroozanfar (2017) Environmental control in petroleum operations. Journal CleanWAS, 1(2): 18-22.]
We saw that the approved field development plan is the first document to contain a decommissioning plan and budget for a production area, and that this plan is called a ‘preliminary decommissioning plan’. We noted that the Petroleum Activities Act 2023 (‘PAA’) provides mandatory content for any preliminary decommissioning plan and additional options for both the preliminary and proposed decommissioning plans. In relation to a proposed decommissioning plan, we saw that sections 57(1) and 57(2) of the PAA set out the timelines and circumstances under which a Licence Holder is obligated to submit the plan for the Minister’s approval.
Overall, we reiterated that ‘decommissioning’ is a critical environmental management component of petroleum operations, and it encompasses “… the process of taking something out of active use, often followed by its safe removal, dismantling, disposal or repurposing” and that “It is typically applied in contexts such as infrastructure, equipment or facilities that have reached the end of their operational life or are no longer needed.”
In this publication, we will continue our review of the PAA’s decommissioning provisions, particularly in relation to offshore petroleum operations, highlighting those aspects that are especially focused on ensuring a safe, responsible, and environmentally sound process.
Decommissioning
Matters pertaining to decommissioning are addressed in Part IX, sections 56 to 65 of the PAA.
Temporary and Permanent Abandonment of Wells
In PAA Series: Environmental Management – Decommissioning Part 1, we noted that during the life of a licence, small-scale decommissioning activities may also be required, for example, where wells may be required to be plugged (sealed) even as other petroleum operations continue under the licence. This circumstance is provided for in relation to petroleum production activities in section 60(4) of the PAA, which states –
At the request of the licensee the Minister may allow the temporary plugging and abandonment of wells when it is necessary for proper development and production of petroleum reservoir in the licence area.
Section 60 also contains provisions relating to the permanent plugging and abandonment of wells, set out below:
Section 60(1) – The holder of an exploration or production licence shall permanently plug and abandon all wells in the licence area within one year of the expiration of the licence, cessation of petroleum operations or termination of said licence.
Section 60(2) – Permanent plugging and abandonment operations shall initiate after six months of inactivity at the production site in accordance with best international industry standards and practices.
Section 60(3) includes additional mandatory requirements for a decommissioning plan or programme “In the case of wells that are part of the infrastructure associated with an offshore oil and gas facility”, the requirements being that the “decommissioning programme for the offshore facility must contain –
(a) a listing of all active, suspended and previously plugged and abandoned wells associated with the facility; and
(b) a description of the methods used or proposed to be used to plug and abandon the wells.
Approval of Decommissioning Plan
Section 59(2) requires the Minister to consider the following in making a decision whether to approve or reject a decommissioning plan –
(a) safety and environmental factors;
(b) technical and economic aspects;
(c) disposal alternatives;
(d) impact on development of other petroleum operations, or sources of energy;
(e) impact on local communities, fisheries and agriculture; and
(f) other national interests
Where the Minister rejects a decommissioning plan, the Minister shall “…serve notice on the licensee providing the reasons for rejection of the plan and directing the licensee to resubmit a new or amended decommissioning plan in accordance with the conditions and terms included in the notice.”
In our next publication, we will continue our review of the Decommissioning provisions contained in Part IX of the PAA.
DISCLAIMER: This series is not intended to serve as a replacement for the Petroleum Activities Act 17 of 2023, nor is it a substitute for legal or other professional advice in any manner whatsoever.
