This is the first year in which the full impact of the oil price decrease will have to be factored in to the annual decommissioning security process. This article focuses on the increasing concern across the offshore oil & gas industry as to whether the decrease in the oil price will result in insufficient security to cover escalating decommissioning liabilities.
Whether sufficient security has already been, or ought to now be, placed in trust is an area raising significant concern in the industry. It is likely to be a key focus in H1 2016, with the approach of the typical yearly deadline for decommissioning security estimates of 30 June. Against a backdrop of historic collaboration and practical co-operation, disputes about the level of decommissioning security have begun to arise.
This article has also been published in Issue 189 of the Platform Oil and Gas Magazine.