Forecast tool to increase visibility of upcoming oil and gas decommissioning projects in Australia

The Centre of Decommissioning Australia’s (CODA) recently released Forward Outlook tool intends to share forecasted decommissioning activity using publicly available data on all offshore oil and gas projects in Australia. By increasing the visibility of upcoming decommissioning projects, the tool is expected to create future opportunities for those in the industry.  

Angus Frean, a construction law expert at Pinsent Masons, said the forecasting tool would help support the industry, especially given the immense difficulty and expense usually associated with securing vessels to undertake decommissioning projects in Australia.

“The new tool will provide opportunities to the Australian oil and gas industry to plan and collaborate in terms of their upcoming decommissioning commitments – helping to manage their risk and exposure in doing so - and will give certainty to vessel owners that there is plenty of work to be undertaken in Australia in the immediate term and for some time to come,” he said.

“While this is a positive move forward, whether the industry utilises the new tool is yet to be seen. In the meantime, there are still various challenges ahead for Australia’s fledging decommissioning industry, including the need to find appropriate locations for dismantling, recycling, and disposal facilities to ensure that this work is undertaken in Australia rather than internationally, so Australian businesses can benefit from this expanding industry.”

Frean also highlighted skills gaps posing additional challenges for the decommissioning industry which were identified in a recent report published by CODA (54-page / 2.7MB PDF). According to the report, despite adequate technical skills in key areas - including engineering and operational skills for pipeline and facilities management - significant skills gaps remain in areas like recycling, decommissioning program planning and reporting, and specific technical skills for subsea preparation and removal.

Josh McGettigan, a planning and environmental law expert at Pinsent Masons, said that these skill shortages are problematic, particularly given the complex environmental approval processes to be followed and the significant amount of work predicted to occur in the short term.

“The Forward Outlook Tool predicts that, of the estimated $60 billion (AUD) decommissioning work left to do in the next 35 years, the majority of that will occur prior to 2039, with a larger proportion expected in the current decade than any other,” he said.

“With no decommissioning works permitted until the required suite of State and Federal environmental approvals are in place, and the numerous delay, cost, and long lead time risks on the road to obtaining them, decommissioning proponents should be seeking advice on how best to navigate environmental approval processes as a matter of priority.”