In PAA Series: Introduction we summarised the contents of Part IX of the Petroleum Activities Act 2023 (‘PAA’) which contains provisions for a critical environmental management process called ‘decommissioning’ which usually occurs at the final stage of exploration or production operations. Part IX details requirements for decommissioning and post-decommissioning activities and the obligations of the licence holder. This includes submission of a decommissioning budget and plan, the contents of the plan, the establishment of a decommissioning fund, and post-decommissioning reporting with independent verification.
In Management Themes (Part 1) we noted that the PAA has been updated to expressly include environmental management requirements in the conduct of petroleum activities. We also noted that environmental matters are considered during the process of granting of a licence, and a licence holder is obligated to conduct decommissioning activities when required. 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.
What is Decommissioning?
“Decommissioning refers to the process of taking something out of active use, often followed by its safe removal, dismantling, disposal or repurposing. 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.” (Reference: National Subsea Centre, January 6, 2025)
The scope of activities which may fall into the category of ‘decommissioning’ can be quite wide. In section 2 of the PAA, decommissioning is defined as including the process of ending petroleum operations, the temporary and permanent plugging of wells, the removal, partial removal, or abandonment in place of wells, facilities, and assets used in the conduct of petroleum operations. These include pipelines, equipment, production and treatment facilities, electrical facilities, landing fields, telecommunication facilities, site restoration and remedial operations, and the use, reuse, or relocation of petroleum infrastructure for alternative purposes.

Offshore Decommissioning
“Offshore decommissioning refers to the process of retiring and dismantling offshore structures and equipment that have reached the end of their operational lives. This involves a series of technical, environmental and regulatory activities to ensure that the decommissioning is conducted safely and responsibly while minimising environmental impacts. It is a complex and expensive process, with costs varying significantly depending on the size, location and type of facility.” (Reference: National Subsea Centre, January 6, 2025)
Decommissioning Obligation
Section 56 of the PAA places the responsibility for decommissioning solely upon the Licence Holder (Licensee). The section provides –
Following the expiration, surrender, or termination of a petroleum exploration or production licence…or cessation of petroleum operations in an area, the licensee shall solely be responsible for –
(a) the removal [of] all property used in petroleum operations from the affected area subject to any arrangements for future use of any property under an approved decommissioning plan; and
(b) remediate the affected area in accordance with best international industry standards and practices.
Key Steps in Offshore Decommissioning – Planning and Regulatory Approvals
“Feasibility Studies: Assess the condition of the platform, environmental risk, impact and logistical challenges.
Stakeholder Engagement: Consult with regulators, governments, local communities and environmental organisations.
Regulatory Approvals: Secure permits from relevant authorities to ensure compliance with national and international regulations.
Cost and Schedule Estimates: Develop a detailed decommissioning plan, including budgets and timelines.” (Reference: National Subsea Centre, January 6, 2025)

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.