Decommissioning—types of decommissioning contracts
Produced in partnership with Isla Stewart of Matheson
Decommissioning—types of decommissioning contracts

The following Energy guidance note Produced in partnership with Isla Stewart of Matheson provides comprehensive and up to date legal information covering:

  • Decommissioning—types of decommissioning contracts
  • Relevant licensee contracts
  • Operator and government arrangements—decommissioning relief deed
  • Operator and contractor arrangements—well decommissioning
  • Operator and contractor arrangements—infrastructure decommissioning
  • Logic general conditions for decommissioning

Oil and gas decommissioning is usually undertaken by the designated operator of the licence (for an on behalf of its coventurers), therefore it is important to make sure that all agreements are in place for all relationships.

Relevant licensee contracts

Agreement type Parties Purpose When to be in place
Joint Operating Agreement (JOA) Licensees Used to agree the process for decommissioning and the accounting of expenditure When the licence is entered into
Decommissioning Security Agreement (DSA) Licensees To provide for future decommissioning costs Ideally should be agreed prior to field development but, in practice, this usually happens later
Trust Deed Each licensee, the Operator and the Law Debenture Trust Company Regulates the funds that have been put in place for the cost of decommissioning Determined by the DSA

For more information on JOAs and DSAs, see Practice Notes:

  1. The purpose and the principles of the