Australia Gets Center for Oil and Gas Infrastructure Decommissioning

National Energy Resources Australia (NERA) has established what it calls The Centre of Decommissioning Australia (CODA), citing "a much-needed collaborative effort to address the challenges and maximize the opportunities of decommissioning Australia’s aging oil and gas infrastructure."  

"CODA brings together many of the world’s major oil and gas companies — Chevron, Woodside Energy, Santos Limited, Esso Australia Pty Ltd, Vermilion Oil and Gas Australia and BHP — as well as many leading service and research organisations such as Baker Hughes, Atteris, Linch-Pin, AGR, Curtin University and Xodus Group," NERA said.

Federal Minister for Resources, Water and Northern Australia Keith Pitt MP on Wednesday welcomed the establishment of the new decommissioning body:  "Congratulations to NERA for the establishment of the Centre of Decommissioning Australia. We all want to ensure we have a sound regulatory framework and that the offshore oil and gas industry can manage current and future decommissioning challenges."

WA Mines and Petroleum Minister, Bill Johnston MLA, said: "Western Australia is already a global hub for the oil and gas sector, accounting for 60 percent of Australia’s LNG exports in 2019, and now has the potential to be a world-leading center for decommissioning. Congratulations to NERA on launching this impressive initiative.”

NERA’s Chief Executive Miranda Taylor said the launch of CODA marked an important step in maximizing 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. CODA will play a critical role in transforming our approach to late-life planning and decommissioning to maximise the value for Australia.”

“NERA is an expert facilitator, bringing our stakeholders together to work on collaborative solutions, like those required to reduce decommissioning costs, create opportunity for local suppliers and improve our understanding of the impact of decommissioning decisions.”

$50 billion of decommissioning work

In 2020 NERA commissioned the first assessment of Australia’s offshore decommissioning liability, produced with support and involvement from oil and gas operators.

The report by Advisian, Worley’s global consulting business, concluded that there is more than $50 billion (US$40.5 billion) of necessary decommissioning work on Australia’s offshore oil and gas infrastructure, over half of which needs to be started within the next ten years.

With the study highlighting the urgency of the situation, NERA said that CODA would the way on supporting industry, government, the community and other stakeholders to ensure that these activities actively seek to maximize opportunities for local service and technology companies in local and regional decommissioning projects.

Chevron Director of Operations, Kory Judd, said: “Industry has a responsibility to manage asset retirement in an environmentally responsible and efficient manner while ensuring opportunities to deliver long-term environmental and socio-economic outcomes for Australia.

“By providing a focal point for collaboration, technology sharing, and local capability opportunities, CODA will enable a coordinated approach to drive positive asset retirement results for the benefit of all stakeholders.”

Woodside Senior Vice President Operations, Fiona Hick, said: “Decommissioning will become increasingly prominent in our industry in Australia in coming years. The launch of CODA presents industry with a fantastic opportunity through which to share best practice and to further contribute to undertaking decommissioning safely and efficiently, while delivering benefits to the environment and local communities.”

Graham Gillies, VP of Australia, New Zealand and Papua New Guinea at Baker Hughes, said: “Decommissioning oil and gas infrastructure in a safe and responsible manner is critical for the future of the industry and for energy transition. As an energy technology company, we are excited to join the CODA network and to work closely with the oil and gas operators in Australia to carefully plan and execute decommissioning projects, leveraging our local resources and expertise in onshore and offshore environments.”

Marking the launch CODA announced a series of foundation projects designed to rapidly accelerate cross-industry understanding of our decommissioning challenge.

These are:  Understanding Opportunities for Local Disposal and Recycling; A Global Review of Decommissioning Planning and Execution Learnings; Development of a Decommissioning Innovation and Technology Roadmap; 

These projects, along with other work being progressed by CODA, represent critical early-stage building blocks in delivering CODA’s objective of maximizing value for Australia from decommissioning activities, NERA said. 

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