Decommissioning is the final stage of any oil or gas project and poses significant technical, economic, social and environmental risks. It is a long, costly, and complex process that if not effectively planned, managed, and executed can have disastrous consequences.

With over 95 producing countries, relatively limited experience to date, increasing risks of stranded assets and weak regulatory frameworks, decommissioning is set to become a critical issue – for the industry, governments and citizens.

Download the Oil and Gas Decommissioning Toolkit

Executive Summary

This Guidance highlights the following key issues associated with decommissioning which have significant implications for governments:

  1. Relative to other oil and gas activities, decommissioning is at an infancy stage with limited country and company experience
  2. Decommissioning carries significant environmental and safety risks which should be factored across the entirety of a project’s life cycle.
  3. Decommissioning costs are extremely large and can easily amount to billions of US dollars. Estimates are subject to large uncertainties and can increase significantly closer to the time when decommissioning activity is required.
  4. Decommissioning occurs when the asset no longer generates revenues. It is therefore imperative that there are adequate funds available when needed – i.e. an effective financial assurance mechanism is in place.
  5. As decommissioning is at a relatively early stage across the world there is limited technical guidance and experience in managing complex social and economic aspects.
  6. The local communities and general public are important stakeholders that need to be considered as fields enter the decommissioning phase. Experience has shown that without early engagement, data-driven debate and timely communication, there can be resistance and opposition to a selected decommissioning solution.
  7. In many jurisdictions the regulatory and liability frameworks for decommissioning is weak – ultimately posing significant risk to the public and the taxpayers.
  8. The energy transition and growing bankruptcy rates in the sector are increasing the decommissioning risks to countries.

This toolkit provides guidance to governments on the key issues associated with oil and gas decommissioning and recommendations for effective management. A summary of the key recommendations to help address key challenges associated with decommissioning is shown below:


Graphic of the recommendations

Contents of the Toolkit

Practical Tools