Initiatives in UK Offshore Decommissioning Following the Wood Review: Applicability for Decommissioning in Norway

Abstract

The 2014 Wood Review is a report reviewing UK offshore oil and gas recovery and its regulation, led by Sir Ian Wood. The report identifies and addresses key challenges in the UK petroleum industry, among them the lack of a strong regulatory body and a decommissioning strategy. The UK petroleum industry is mature, and Norway may benefit from UK's experiences in decommissioning. The article investigates the applicability of the Wood Review recommendations for decommissioning in Norway. The analysis of the recommendations in the Wood Review is carried out by a SWOT-analysis of the general recommendations with a high potential impact on decommissioning as well as the five recommendations specific to decommissioning. The recommendations in the Wood Review were broadly accepted by UK authorities and formed the basis for numerous initiatives aimed at improving policies and practices in UK decommissioning. The key initiatives are presented to illustrate how the Wood Review recommendations has been interpreted. A summary of the key differences between the petroleum industries and the regulatory authorities in Norway and the UK is provided for background. Decommissioning in Norway face similar challenges to those identified in the Wood Review. The analysis indicates that several of the UK initiatives following the recommendations in the Wood Review has the potential of improving decommissioning in Norway. Differences in regulatory regimes between the regions may complicate the implementation of some of the initiatives following the Wood Review in Norway. In most cases only minor changes to regulations and/or practices are required. Recent UK initiatives with a high impact on decommissioning include increased focus on sharing of information and lessons learned, increased collaboration, the development of a decommissioning strategy, benchmarking of decommissioning cost estimates for all projects and the development and publishing of annual UK decommissioning cost estimates. There are indications that the Norwegian Petroleum Directorate (NPD) and the Norwegian Ministry of Petroleum and Energy (MPE) are falling behind their UK counterparts in key areas. Norway has limited experience with decommissioning, and scrupulous analysis of lessons learned in other regions is essential. Decommissioning of Norwegian offshore infrastructure is a major undertaking and even minor improvements may have a substantial impact on personnel risk, risk to the environment or the total decommissioning expenditure. The Norwegian regulatory regime has been an integral part of the Norwegian petroleum industry's success in previous decades, and changes to the regime require careful deliberation. The recent implementation of initiatives aimed at improving decommissioning regulations and practices in the UK represents a unique learning opportunity for Norwegian authorities. The analysis suggest that Norway may benefit from adopting some of the UK initiatives following the Wood Review recommendations.