Decommissioning in Bass Strait
Bass Strait Decommissioning Annual Report 2022
The process of decommissioning offshore facilities presents complex challenges. As operator of some of Australia’s oldest oil and gas fields, Esso Australia is committed to decommissioning our Bass Strait offshore facilities safely and effectively.
We have substantial experience in safely and effectively decommissioning facilities to achieve positive outcomes across the globe, and we are excited to be part of Australia’s growing decommissioning industry.
As we continue to plan for decommissioning our non-producing facilities, we are working with relevant stakeholders to find solutions that balance environmental impacts and benefits with the needs of the community and regulatory requirements.
Recent global decommissioning experience
Our ongoing role in Gippsland
Esso Australia has been a proud member of the Gippsland community for more than 50 years. During that time we have delivered highly skilled jobs and business opportunities to the region and created significant, long-lasting economic benefits.
We are managing the decline in Bass Strait oil and gas production by streamlining our operations, transitioning from Australia’s oldest oil and gas business to a modern Australian gas company, which will continue to provide local employment opportunities for years to come.
In addition, we will need a skilled workforce to undertake the challenging and extensive work involved in decommissioning our non-producing offshore facilities.
Regardless of how we decommission, we know we will need people employed in completing a significant scope of work throughout the further decommissioning phases, including, but not limited to, well plug and abandonment, maintenance, care and preservation, preparation for removal, top-side removal and subsea facility decommissioning.
We are also exploring innovative ideas to leverage our extensive energy network so that the Gippsland region can maintain its role as one of Australia’s significant energy hubs, supporting local jobs and our ongoing supply of energy which Australian’s rely on.
Our agreement with Air Liquide, that will see CO2 extracted from Gippsland gas reused in Australian industries and our studies to determine the potential for local carbon capture and storage, which will see our current facilities repurposed, and infrastructure utilised to reduce emissions and continue to enhance employment opportunities, are two examples of how we’re working to maintain our ongoing role in Gippsland.
The South East Australia Carbon Capture Hub
Gippsland Basin Joint Venture CO2 supply agreement with Air Liquide Australia
Maintaining our thriving ecosystem
Many of our offshore facilities have been in place for multiple decades, and over that time have developed into thriving ecosystems.
As part of our decommissioning planning, we partnered with expert researchers, academics and environmental consultants to complete a three-part comprehensive offshore environmental survey which included a detailed examination of fish and epibenthic communities, a benthic infauna identification and a sediment analysis.
As you can see in the below footage from an offshore environmental survey conducted in 2021, the majority of our structures are completely covered in marine life, including anemones and sponges.
This marine life is in turn providing a habitat and a source of food for over 55 species of fish (including those fished commercially and recreationally) and larger marine fauna such as seals and sharks.
These extensive ecosystems were observed to be very different to the surrounding seafloor and a nearby natural reef, with more reef associated species being noted on and around the structures, compared with predominantly sand associated species in the surrounding areas.
Identifying the best way forward
The Offshore Petroleum and Greenhouse Gas Storage (OPGGS) Act requires Esso Australia to remove all structures, equipment and property no longer used, unless it is demonstrated that an equal or better environmental outcome is achieved from something other than complete removal. The existing requirements to reduce environmental impacts and risks to as low as reasonably practicable and be of an acceptable level must also be met, consistent with the OPGGS (Environment) Regulations.
For our steel piled jackets, we have identified a number of decommissioning options and assessed each one in order to determine which approach balances the needs of other users of the sea by ensuring the safety of navigation and delivers an equal or better environmental outcome by retaining the marine ecosystems which have developed around the jackets.
From the outset, we identified and actively engaged with key stakeholders across the Gippsland region and continue to consult them as we work through the process. This ongoing communication has played an essential role in how we align our approach and ensure the work that we are undertaking meets the community’s needs and expectations.
All of the options for decommissioning the steel jackets include full removal of the upper sections of the platform including the accommodation and processing facilities, known as the topsides. The overall demand for a skilled workforce to support the decommissioning program will vary minimally regardless of which option is pursued for the cut off depth of the steel jackets.
Decommissioning works are already underway
Esso Australia has made significant progress on our well plug and abandonment work, which puts non-producing platforms in a safe state until final decommissioning occurs.
Over the last few years, we have completed around $600 million of decommissioning works in Bass Strait, including successfully removing the Seahorse and Tarwhine facilities, completing plug and abandonment activities at Blackback, and Whiting wells, and significantly progressing well decommissioning activities on Kingfish B and Mackerel.
We have also committed $150 million for further plug and abandonment work, including the recent introduction of a second platform based rig into the Gippsland Basin to allow concurrent plug and abandonment work.
Approximately 600 workers have thus far been engaged to facilitate the plug and abandonment work, whilst approximately 40 contract staff steward the care and preservation stage through our general maintenance contractor UGL. Further workforce requirements will be needed for facility preparation activities which will commence following the conclusion of plug and abandonment work.
In 2022, we entered a multi-year agreement with DOF Subsea to charter a Multi-Purpose Supply Vessel which will support early decommissioning works on the Perch and Dolphin facilities, before moving onto other topside and subsea work scopes.
Further to this, in June 2022 we announced we are undertaking a technical tender, requesting technical submissions from a number of experienced offshore heavy lift contractors, who will each outline how they propose to undertake the platform removal activities. While this activity is focused on the first phase of decommissioning our non-producing platforms, key learnings will be captured and carried through to future decommissioning phases for the remaining producing facilities. Future consultation and engagement with stakeholders for the later phases of decommissioning will take place once options for those assets have been similarly matured.
Esso Australia charters Multi-Purpose Supply Vessel to support decommissioning activities in Bass Strait
Esso Australia commences technical tender for Bass Strait decommissioning
Opportunities for the Gippsland Basin
Although the Gippsland Basin has been producing energy for more than 50 years, it remains today the largest single source of gas supply to the east coast domestic market.
The Gippsland Basin has the potential to continue supplying one third of south east Australia’s domestic gas demand through to the end of this decade and beyond. Our transition to a modern Australian gas business and the eventual decommissioning of our facilities are significant challenges that will provide local employment opportunities and contribute to the Gippsland economy for many years to come.
While we are currently undertaking activities to decommission our non-producing facilities, there will be further decommissioning works required in future, including the eventual decommissioning of facilities that today are still delivering much-needed gas to Australia.
Our offshore and onshore operating network spans over 300 kilometres across south east Australia, and includes 11 producing offshore platforms and installations which will continue to operate in the Bass Strait as we commence this initial phase of the decommissioning process, providing essential energy through the Longford and Long Island Point Plants.
We are actively working with multiple parties to ensure these valuable assets continue to be an important part of south-east Australia’s energy system and support Australia’s medium to long-term emissions reduction goals.