News
DECC Publishes Guidance on Charging a Fee for Approving Offshore Decommissioning Programmes - 19 Jul 2012
The Department of Energy & Climate Change (DECC) has recently published guidance on charging a fee in respect of offshore (oil and gas) installations and pipelines decommissioning programmes under the Petroleum Act 1998.
Following a consultation on DECC’s proposal’s to start charging a fee for reviewing and approving offshore oil & gas decommissioning programmes the majority of stakeholders indicated that; should such a charging scheme be adopted; their preferred charging method was one based on the type of facility. This was also DECC’s preferred charging method as it would be equitable, costs to the companies will reflect the use of Departmental resource, it minimises administrative costs, and would also be relatively simple to adopt.
The table below summarises the indicative cost for each type of installation. If an Operator is submitting both an installation and pipeline decommissioning programme the total fee would therefore be; for example; Band A) plus Band B) - these are the most common scenarios received by DECC. The Department will however apply a higher fee for a large scale installation, multiple (two or more) large or small scale installations or a combination of installations within an installation decommissioning programme.
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(1) Category of offshore installation or submarine pipeline
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(2) Indicative Fee
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A) Small scale offshore installation (any concrete or steel offshore platform or other installation including subsea with a weight of less than 10,000 tonnes)
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£100,000
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B) Submarine pipeline
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£100,000
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C) Multiple small scale offshore installation (two or more concrete or steel offshore platforms or other installations including subsea each with a weight of less than 10,000 tonnes)
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£125,000
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D) Large scale offshore installation (any concrete gravity based structure or steel offshore platform or installation with a weight of 10,000 tonnes or more)
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£200,000
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E) Combination of large and small scale offshore installation (two or more concrete gravity based structures or steel offshore platforms or installations including subsea at least one of which (but not all) has a weight of 10,000 tonnes or more)
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£225,000
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F) Multiple large scale offshore installation (two or more concrete gravity based structures or steel offshore platforms or installations each with a weight of 10,000 tonnes or more)
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£250,000
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G) Revision (Section 34)
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£50,000
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The Secretary of State will be responsible for setting the fee. In calculating the fee the Secretary of State will take the following factors into account;
• The number of days which the Offshore Decommissioning Unit estimates will be required to consider a decommissioning programme from initial discussions, through development of the programme to final programme approval (Section 29);
• The number of officers which the Offshore Decommissioning Unit estimates will be required to consider the decommissioning programme from initial discussions, through development of the programme to final programme approval (Section 29).
The fee will be payable on submission of a decommissioning programme. Before submission of the final version of the decommissioning programme (Stage 3) DECC will advise the operator to submit a final draft of the programme. When submitting the final draft the operator should at the same time request that DECC determines a fee. On receipt of the final draft programme and the request to determine a fee DECC will then make a written demand for payment (via electronic invoice).
More information can be found in the Guidance on charging a fee in respect of offshore (oil & gas) installations and pipelines decommissioning programmes under the Petroleum Act 1998.
Contact:
Kevin Munro, Offshore Decommissioning Unit, Department of Energy & Climate Change.
Email: Kevin.munro@decc.gsi.gov.uk Tel: 01224 254075
