مهین فلاحتی

Decommissioning of petroleum installation and facilities is part of E&P operations that consists of plugging of wells, dismantling of installations and clearance of the site. Technical, financial, economic costs and environmental issues associated with the decommissioning process, compel host countries to enact laws and regulations dealing with all the details of decommissioning operations. However, in some countries, there is no system of law governing the decommissioning project. In the countries with the decommissioning law system, the contents of the laws and regulations are different due to the level of technology and environmental awareness. Identifying law-making gaps in the decommissioning law system of Iran requires the comparative study of the other countries′ laws and regulations especially oil pioneer countries. Therefore, this article at first, analyses the laws and regulations governing the decommissioning of oil and gas installations in the countries with more production capacity such as the UK, the US, Norway and Canada and the countries with lower production capacity such as Nigeria, China, Thailand, Australia, New Zealand, Brunei, Indonesia and the Netherlands comparatively and then deals with decommissioning laws and regulations in Iran.

After exploration and production operation in an oil or gas field comes to an end, decommissioning of facilities and installations becomes inevitable. Difficulty of this process results from unprofitability of the field and duty to financing the decommissioning costs at the same time. This fact that the decommissioning process starts when the field is unproductive, falls host states and international oil companies in vague conditions in respect of decommissioning costs. Unlike many developed countries, in oil exporting countries such as Iran, there is no suitable legislative framework for dealing with the different aspects of decommissioning process. For this reason, the contractual terms are used to cover this deficiency. This article, first examines contractual arrangements governing decommissioning process and rights and obligations of each party in this area and then analyses the Iranian oil contracts in compliance with examined arrangements.