As some offshore oil and gas fields in Australia approach the end of their reserves, the Centre of Decommissioning Australia (CODA) led by National Energy Resources Australia (NERA), has been launched to focus on the decommissioning of aging infrastructure.
CODA is a collaboration between major oil and gas companies Chevron, Woodside Energy, Santos Limited, Esso Australia, Vermilion Oil and Gas Australia and BHP, as well as research organisations Baker Hughes, Atteris, Linch Pin, AGR, Curtin University and Xodus Group.
The aim of CODA is to address the challenges and maximise the opportunities of decommissioning in Australia.
In 2020, NERA commissioned Worley Group’s global consulting business Advisian to complete an assessment of Australia’s offshore decommissioning liability which concluded that there is more than A$50 billion of necessary decommissioning work on Australia’s offshore oil and gas infrastructure.
Over half of this work needs to be started within the next 10 years.
The Advisian report found that there are substantial opportunities for cost reduction through well-established initiatives, such as knowledge share and multi-asset campaign approaches, as well as a need to continuously improve data sets and centralised planning.
A common theme that emerged from the report is the potential for significant cost reduction and socio-economic benefits to be realised through collaboration between industry and government, as well as within industry and within the supply chain.
Advisian said NERA identified that a tool, such as a Decommissioning Planning System, would automate potential efficiency and collaboration by promoting:
An integrated view of decommissioning scope and timelines;
Collaboration and stakeholder engagement;
An understanding on disposal paths and options, navigation of the regulatory framework;
Transparency in asset information;
The potential benefits from completing a Comparative Assessment;
Recognition that the removal of facilities results in a reduction in activities with limited economic flow on and the potential to dis-incentivise future sale and/or long-life operations;
Early late-in-life activity planning, incorporating lessons learned and leveraging activities elsewhere in the region;
The potential to grow a new sub-industry in Australia that supports jobs and investment.
Federal Minister for Resources, Water and Northern Australia Keith Pitt welcomed the establishment of CODA.
“We want to ensure we have a sound regulatory framework and that the offshore oil and gas industry can manage the current and future decommissioning challenge,” Mr Pitt said.
WA Mines and Petroleum Minister Bill Johnston also congratulated the launch of CODA.
“Western Australia is already a global hub for the oil and gas sector, accounting for 60 per cent of Australia’s LNG exports in 2019, and now has the potential to be a world-leading centre for decommissioning,” Mr Johnston said.
NERA Chief executive Miranda Taylor said the launch of CODA marked an important step in maximising value for the community, the environment and for Australian industry.
“We are looking at $50 billion of work over the next 50 years, so decommissioning represents a multi-generational challenge for Australia,” Ms Taylor said.
“CODA will play a critical role in transforming our approach to late-life planning and decommissioning to maximise the value for Australia.”
The Department of Industry, Science, Energy and Resources’ Enhancing Australia’s decommissioning framework consultation paper, released last year, said the time is now for Australia to adapt its policies and regulatory practices to a changing oil and gas industry.
It outlines the department’s proposal for an enhanced framework to ensure the Australian regime is clear, fit for purpose and leading practice.
Key objectives in the framework are to ensure companies are planning for decommissioning early and to enable research and collaboration to optimise decommissioning outcomes.
According to NERA, the aim for CODA will be to connect industry, research and government, help Australia become a leading source of technology and capability in late-life asset planning and decommissioning, reduce decommissioning costs by at least 35 per cent, and provide opportunities for local service and technology companies.