The lack of standard market wording for decommissioning, along with serious concerns regarding environmental losses arising during the decommissioning process, is likely to cause significant problems for insurers, according to Anthony Menzies of legal firm DAC Beachcroft, in its latest publication on trends in the marine industry.
Many major North Sea structures still in operation are more than 40 years old. More than 5,000 wells and 475 platforms are expected to be decommissioned over the next 30 years in the North Sea alone.
The maturity of such structures and the impact low oil prices have had in restricting maintenance programmes mean this is a particularly difficult area of risk to evaluate, DAC Beachcroft said.
It noted that there would be pressure to adopt a market-wide approach to decommissioning “akin to the existing offshore construction market wording.
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