Dismantling oil and gas rigs to cost $52b

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Dismantling oil and gas rigs to cost $52b

Australia’s offshore oil and gas infrastructure has a hefty $52 billion decommissioning price tag attached to it.

The costing is the focus of a report released on Wednesday to coincide with the announcement of the Centre of Decommissioning Australia, which aims to streamline the process in a bid to save $18 billion.

The centre brings together major oil and gas companies including Chevron, Woodside Energy, Santos Limited, Esso Australia Pty, Vermilion Oil & Gas Australia and BHP.

It also involves service and research groups.

CODA has been set up by National Energy Resources Australia, whose general manager for decommissioning Andrew Taylor says about half of the $52 billion worth of work will begin within 10 years.

“If we are to improve our approach to decommissioning, we need to start today,” he told AAP.

“All of these companies are required to carry decommissioning liabilities on their books, so it’s in their interest to engage in a collaborative way to find a more efficient way to do this work.

“We are driving this to maximise the value for Australia out of these activities.”

Most of the offshore oil and gas infrastructure is off the coast of Victoria and Western Australia.

Decommissioning is expected to take 30 to 40 years.

CODA wants Australian businesses to take up much of the work, which it says will lead to more opportunities as other nations go through the same process.

Australia is looking to the UK and Norway for tips.

“If we’ve got 10 years to greatly accelerate our understanding and approach to these activities, then we really need to look at some of these other jurisdictions and work out how they’ve done it,” Mr Taylor said.

“We are agnostic on whether things are good or bad for the environment but the companies doing the decommissioning have the opportunity to demonstrate if they think there is a potential environmental benefit to leaving structures in the ocean.”

The centre is seeking proposals until April 9 for its first three projects, one of which is designed to ensure better understanding of local disposal and recycling opportunities.

The other two projects relate to a review of decommissioning plans around the world and an innovation and technology road map for the process.

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