DECOMMISSIONING of oil rigs occupies the headlines from time to time with opportunities of potential economic benefit for Scottish ports, recycling contractors and Scotland as these former revenue generating assets reach the end of their working lives, writes Duncan MacLean of Brodies LLP
Much of the discussion to date has focused on fixed platforms such as those in Shell’s Brent field and the sea bed infrastructure around them. The Buchan Alpha, now moved alongside Lerwick’s Dales Voe for decommissioning, was one such producing platform, but in its former life it was a mobile drilling unit or semi-submersible rig. Its working life had a strong connection with another Scottish port, with its conversion from a drilling rig to a production unit taking place at the Arnish facility in Stornoway in the late 1970s before starting production in the Buchan Field in the early 80s.
Semi-submersible drilling rigs are registered with the International Maritime Organisation and are classified as vessels. They can float and can, to a limited extent at least, manoeuvre under their own propulsion. When they are between contracts or have no contracts, they are generally taken off location to a sheltered harbour facility and "stacked"; either "hot stacked" in anticipation of an early new contract or "cold stacked" with most operational capability shut down. Over the years the Cromarty Firth, and to a lesser extent, the Firth of Forth have seen these rigs either stacked or in for repair or maintenance.
If rigs are to be taken out of service and decommissioned, various legal issues arise. International conventions on the shipment and disposal of waste, and ship recycling are both engaged. The Basel Convention 1989 which deals with the transboundary shipment of waste between states has an overarching objective of protecting human health and the environment against the adverse effects of hazardous waste. It requires the generator or exporter of waste – and the Convention has a long list of wastes in it – to provide written notification to the relevant authorities in the state of export, any state through which the waste transits and the state of import. So, if a ship or former drilling unit contains hazardous wastes, the notification and consent procedures under the Basel Convention require to be complied with.
The EU implemented the Waste Ship Regulation in 2006 which implemented the Basel Convention in the EU and prohibited exports of waste to non-OECD countries, except Turkey. The UK in turn brought in regulations in 2007, giving the Waste Shipment Regulation force of law in the UK. Essentially what the international and national legislation seeks to do is prohibit unregulated disposal of waste. If drilling rigs and ships contain waste, then their ability – particularly for ships - to move on the high seas outwith the jurisdiction of any state makes the enforcement of international and national law potentially complex.
After a conference in Hong Kong in 2009, an international convention was entered into which applies specifically to ships and is intended to cover the full life cycle of a ship from building to recycling. New build ships now have "green passports" which log all materials and waste materials on board so that when they are recycled at the end of their working life, an inventory of all hazardous materials on board is readily available.
The Hong Kong Convention has the same broad aim as the Basel Convention, which is to prevent, reduce, minimise and eliminate accident injuries and other adverse effects on human health and the environment caused by ship recycling. The intention is that ships are recycled at authorised recycling facilities in accordance with approved ship recycling plans.
As drilling units are ships for this purpose, the authorities - in Scotland’s case the Scottish Environment Protection Agency (SEPA) - therefore have an interest in the movement of any non-operational units or units which have been cold stacked for some time in Scottish ports. SEPA will want to know whether the units will be cold stacked elsewhere, or whether they will be recycled.
Ships and drilling rigs are generally free to move around the globe, and do so subject to regular marine regulations, but when they potentially become classified as waste the authorities want to know more. There then begins examination of a complex legal regime which has to be navigated against a background of national and international legislation, asking probing questions about the intention for, and nature of, the rig or vessel, its transportation and whether or not its final port of destination will be an environmentally-sound recycling facility. The iconic images of oil rigs in Scottish waters or at Scottish ports are very familiar, but the legal issues which surround their decommissioning are, like the oil that they previously drilled for, well beneath the surface.
Duncan MacLean is a partner in the Shipping and Marine team at Brodies LLP
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