Baroness Worthington – 2015 Parliamentary Question to the Department for Energy and Climate Change

The below Parliamentary question was asked by Baroness Worthington on 2015-10-05.

To ask Her Majesty’s Government what measures they have taken to limit their exposure to costs arising from the decommissioning of North Sea oil and gas infrastructure.

Lord Bourne of Aberystwyth

There are robust safeguards in place to prevent the costs of decommissioning falling to the taxpayer. Measures under Part 4 of the Petroleum Act include the ability for the Secretary of State to require the owners of an offshore installation or pipeline to prepare and execute a decommissioning programme for those assets, and to take financial securities from those companies to protect the tax-payer from any default.

We are committed to ensuring decommissioning programmes represent value for money, which is why the Government intends to bring forward amendments at Lords Report Stage of the Energy Bill to: require decommissioning programmes to be cost effective, ensure the Oil and Gas Authority has the powers it needs to scrutinise companies’ decommissioning plans to ensure they are cost effective, and enable the Secretary of State to require a company to take specific action to reduce the costs of decommissioning to address cost overruns.