Decommissioning in the Middle East

With a significant number and concentration of older oil and gas facilities, decommissioning is becoming a hot topic in the Middle East.

While jurisdictions vary, many producing countries in the region do not yet have mature legislative and regulatory structures for decommissioning and older oil and gas contracts do not address the issue in detail. This creates the potential for uncertainty regarding the allocation of decommissioning liabilities, the standards applicable to the abandonment of infrastructure and the handling of residual long-term liabilities. Bearing in mind the potential severity of civil and criminal sanctions for breach of environmental laws, it is of paramount importance that companies and their partners understand the extent of their responsibility for decommissioning and abandonment liabilities and obligations.

This article discusses the technical, commercial and legal challenges that industry players are facing in the region (with reference to the authors’ first-hand experience) and which will become more urgent as installations approach their end of life. It discusses the types of contractual, legal and regulatory regimes currently in place in the Middle East and, drawing from more mature jurisdictions such as the UK, the advantages and disadvantages of alternative approaches to regulating decommissioning.

Finally, the article looks to the future by assessing the challenges and opportunities for upstream companies and consultants and explores some of the potential ways to achieve a satisfactory outcome for all stakeholders.

Read the full article by clicking on the link below:

Decommissioning in the Middle East – Opportunities and Challenges

This exclusive insight is published by The Oil & Gas Year and provided by Lloyd’s Register and Devine & Severova.