DECOMMISSIONING IN THE UNITED KINGDOM CONTINENTAL SHELF: DECOMMISSIONING SECURITY DISPUTES

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Ben Holland

Abstract

This article focuses on whether the decrease in the oil price will result in insufficient security to cover escalating offshore decommissioning liabilities. The annual decommissioning security process requires the calculation of an amount of security in anticipation of decommissioning. This process takes place under decommissioning security agreements, whose aim is to provide mutual protection in case one party falls into financial difficulty. The funds are held in a trust until the decommissioning is completed. This article notes that disputes have begun to arise as to whether sufficient security has already been - or ought to now be - placed in trust. This article also considers the preferred dispute resolution mechanism for such disputes, namely expert determination.

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