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Abstract

This paper examines the evolving landscape of decommissioning costs and financial guarantees in the global oil and gas industry, focusing on current trends and regulatory frameworks across key jurisdictions, such as Brazil, Canada, China, Ghana, Nigeria, Norway, the United Arab Emirates, the United Kingdom, and the United States, particularly in light of emerging technologies and how they reshape legal liability structures and cost estimation models. As the oil and gas industry faces increasing pressure to transition toward sustainable energy but at the same time manage the energy trilemma, decommissioning of offshore installations has become a critical and costly challenge. This comparative analysis demonstrates that existing decommissioning legal frameworks remain critically under-calibrated to the scale of the liabilities they govern. A 2024 report by the U.S. Government Accountability Office found that the Department of the Interior held only approximately $3.5 billion in supplemental bonds to cover between $40 billion and $70 billion in total estimated offshore decommissioning costs, with more than 2,700 wells and 500 platforms overdue for decommissioning in the Gulf of Mexico as of June 2023.

Digital Object Identifier (DOI)

10.55496/JPJT5314

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