Decommissioning relief deeds - a world first

摘要

The background to this is that under UK legislation, owners of offshore infrastructure at the end of its useful life are jointly and severally liable to decommission it. If the owners default, a wide range of people, including former owners, are also potentially liable to be brought back to pay for decommissioning. As a result, co-venturers in oil fields often enter into decommissioning security agreements (DSAs), under which each owner provides security to the others against the risk of defaulting on its decommissioning obligations. Oil companies selling interests in fields often also require such security from those purchasing their interest. Security is usually provided in the form of a letter of credit from a bank, and the bank will often require collateral from the party providing the security. This security therefore ties up a lot of capital which could be more usefully employed.