Petroleum Act 1987

Petroleum Act 1987
Act of Parliament
	Parliament of the United Kingdom
Long title	An Act to make provision in respect of the abandonment of onshore installations and submarine pipe-lines and in respect of safety zones around offshore installations; to amend the Petroleum (Production) Act 1934 and to make provision in respect of licences under that Act; to amend the law relating to pipe-lines; to repeal sections 34 to 39 of the Petroleum and Submarine Pipe-lines Act 1975; and for connected purposes.
Citation	1987 c. 12
Introduced by	Viscount Davidson (second reading) (Lords)
Territorial extent	United Kingdom Continental Shelf
Dates
Royal assent	9 April 1987
Other legislation
Amended by	Petroleum Act 1998
Status: Amended
Text of the Petroleum Act 1987 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk.

Last updated April 17, 2024

The Petroleum Act 1987 (c. 12) is an Act of the Parliament of the United Kingdom which updates the arrangements for regulating offshore installations and their operation. In particular it makes provisions for the licensing and the safe and orderly abandonment of installations and submarine pipelines.

Background

The cost of totally removing all existing offshore installations on the UK continental shelf was estimated, in 1984, to be £6 billion (1984 prices).^[1] The government hoped that costs could be saved by allowing the partial, rather than the total, removal of installations. It was necessary that an appropriate framework should be in place to set standards for the removal operations. Apart from the interests of oil companies there were those of fishermen and mariners, the UK's obligations under international law^[2] and the interests of the taxpayer. The responsibility for removal rested with the owners of an installation or pipeline. There should be criminal offences for failure to comply with obligations. The government gave the Secretary of State enabling powers to make regulations concerning detailed standards for abandonment.^[1]

In addition to an abandonment regime it was necessary to update the royalty regime by rationalising the procedures for royalty accounting and arbitration and the provisions for the measurement of petroleum.^[1] Furthermore, enabling powers were needed to allow repayment of royalties to make allowance for abandonment costs. The UK offshore licensing regime needed to be extended to the territorial waters of Northern Ireland.^[1]

In 1987 each safety zone round an installation had to be established by statutory instrument. Legislation was necessary to provide for the automatic creation of a 500 metre safety zones around offshore installations.^[1] Updated legislation for onshore pipelines was required, especially provisions for insurance arrangements; the Secretary of State was empowered to prohibit the use or testing of any pipeline unless funds were available to discharge any liability for loss or damage.^[1]

The Petroleum Act 1987

The Petroleum Act 1987 (1987 c. 12)^[3] received royal assent on 9 April 1987. Its long title is: ‘An Act to make provision in respect of the abandonment of onshore installations and submarine pipe-lines and in respect of safety zones around offshore installations; to amend the Petroleum (Production) Act 1934 and to make provision in respect of licences under that Act; to amend the law relating to pipe-lines; to repeal sections 34 to 39 of the Petroleum and Submarine Pipe-lines Act 1975; and for connected purposes.’

Provisions

The Act comprises 32 Sections in 4 Parts and 3 Schedules:^[3]

PART I Abandonment of Offshore Installations
- Sections 1 to 16 – Programmes for abandonment, appropriate persons to submit programmes, notices, approvals, failure to submit programmes, revision of programmes, withdrawal of approval, duty to carry out programmes, default in carrying out programmes, financial resources, making regulations, offences, the powers of the Secretary of State, notices.
PART II Licensing
- Sections 17 to 20 – existing licences, future licences, extension to Northern Ireland territorial waters, annual reports.
PART III Miscellaneous
- Safety zones – Sections 21 to 24 – automatic establishment of safety zones, establishment by order, safety zone offences.
- Pipe-lines – Sections 25 to 27 – construction authorisations, funds, compulsory acquisition of rights.
- Refineries – Section 28 – construction of refineries (repealing existing legislation).
PART IV Supplementary
- Sections 29 to 32 – expenses, repeals, commencement, short title and extent.
SCHEDULES
- Schedule 1– Amendment of Existing Licences
- Schedule 2 – Amendment of Model Clauses
- Schedule 3 – Repeals

Effects of the Act

The 1987 Act provided a framework for the abandonment of offshore installations on the UK continental shelf.^[2]

The first decommissioning approval was given in 1988 for the abandonment, by toppling, of the remains of the Piper Alpha platform.^[4] The first decommissioning approval for a floating production facility (FPF) was given in 1991 for the Crawford FPF. The first fixed steel platform to be entirely removed to shore was the Forbes AW platform in 1993.^[4]

Later enactments

Parts I and II of the 1987 Act were repealed on 15 February 1999 by the Petroleum Act 1998.^[5]

Part III section 28 (construction of refineries) was repealed on 15 February 1999 by the Petroleum Act 1998.^[5]

Related Research Articles

Norpipe is a subsea oil and natural gas pipelines system in the North Sea. It supplies oil from the Norwegian Ekofisk and associated fields in the North Sea to the United Kingdom and natural gas to Germany.

"Offshore", when used in relation to hydrocarbons, refers to operations undertaken at, or under the, sea in association with an oil, natural gas or condensate field that is under the seabed, or to activities carried out in relation to such a field. Offshore is part of the upstream sector of the oil and gas industry.

The Bacton Gas Terminal is a complex of six gas terminals within four sites located on the North Sea coast of North Norfolk in the United Kingdom. The sites are near Paston and between Bacton and Mundesley; the nearest town is North Walsham.

The oil and gas industry plays a central role in the economy of the United Kingdom. Oil and gas account for more than three-quarters of the UK's total primary energy needs. Oil provides 97 per cent of the fuel for transport, and gas is a key fuel for heating and electricity generation. Transport, heating and electricity each account for about one-third of the UK's primary energy needs. Oil and gas are also major feedstocks for the petrochemicals industries producing pharmaceuticals, plastics, cosmetics and domestic appliances.

Commercial offshore diving, sometimes shortened to just offshore diving, generally refers to the branch of commercial diving, with divers working in support of the exploration and production sector of the oil and gas industry in places such as the Gulf of Mexico in the United States, the North Sea in the United Kingdom and Norway, and along the coast of Brazil. The work in this area of the industry includes maintenance of oil platforms and the building of underwater structures. In this context "offshore" implies that the diving work is done outside of national boundaries. Technically it also refers to any diving done in the international offshore waters outside of the territorial waters of a state, where national legislation does not apply. Most commercial offshore diving is in the Exclusive Economic Zone of a state, and much of it is outside the territorial waters. Offshore diving beyond the EEZ does also occur, and is often for scientific purposes.

Petroleum Act is a stock short title used internationally for legislation relating to petroleum.

The Gas Act 1986 created the framework for privatisation of the gas supply industry in Great Britain. This legislation would be replacing the British Gas Corporation with British Gas plc. The Act also established a licensing regime, a Gas Consumers’ Council, and a regulator for the industry called the Office of Gas Supply (OFGAS).

<span class="mw-page-title-main">Submarine pipeline</span> Pipeline that is laid on the seabed or below it inside a trench

A submarine pipeline is a pipeline that is laid on the seabed or below it inside a trench. In some cases, the pipeline is mostly on-land but in places it crosses water expanses, such as small seas, straits and rivers. Submarine pipelines are used primarily to carry oil or gas, but transportation of water is also important. A distinction is sometimes made between a flowline and a pipeline. The former is an intrafield pipeline, in the sense that it is used to connect subsea wellheads, manifolds and the platform within a particular development field. The latter, sometimes referred to as an export pipeline, is used to bring the resource to shore. Sizeable pipeline construction projects need to take into account many factors, such as the offshore ecology, geohazards and environmental loading – they are often undertaken by multidisciplinary, international teams.

The Petroleum (Consolidation) Act 1928 is a UK Act of Parliament to consolidate the enactments relating to petroleum and petroleum-spirit. It specified and updated the conditions for the granting of licenses for keeping petroleum spirit; the labelling of containers for petroleum spirit; its transport; and regulations for certain uses.

The Petroleum Act 1998 is an act of the Parliament of the United Kingdom which consolidated arrangements for the licensing, operation and abandonment of offshore installations and pipelines. As a consolidation Act, it did not change the substantive law, although certain Acts were amended and repealed.

The Mineral Workings Act 1971 is an act of the Parliament of the United Kingdom which provided for the safety, health and welfare of people on installations undertaking the exploitation of, and exploration for, mineral resources in UK offshore waters.

The Offshore Safety Act 1992 is an Act of the Parliament of the United Kingdom which extends the application of the Health and Safety at Work etc. Act 1974 to secure the safety, health and welfare of people on offshore installations. It increases the penalties of certain offences under the 1974 Act and empowers the Secretary of State to secure supplies of petroleum and petroleum products.

The Oil and Gas (Enterprise) Act 1982 is an Act of the Parliament of the United Kingdom which started the process of privatisation of the oil and gas industries in the UK. It empowered the government to float off and sell shares in Britoil the upstream production side of the British National Oil Corporation. It ended the British Gas Corporation’s monopoly on the transportation and supply of gas, opening up the gas market to other gas suppliers. The Act made miscellaneous provisions relating to the oil and gas industries concerning Petroleum Licences and Offshore Installations.

The Petroleum and Submarine Pipe-lines Act 1975 was an act of the Parliament of the United Kingdom which addressed the licensing, ownership, exploitation, production, transportation, processing and refining of petroleum and petroleum products in the UK. Enacted in 1975 when the UK’s first North Sea oil was produced, the act aimed to provide greater public control of the oil industry. The act established the British National Oil Corporation and a National Oil Account; modified the conditions of petroleum licences; controlled the construction and use of underground pipelines; and controlled the development of oil refineries.

The Oil and Pipelines Act 1985 is an Act of the Parliament of the United Kingdom which established the Oil and Pipelines Agency to buy, sell or deal in petroleum and to manage on behalf of the Crown petroleum pipelines and storage installations. The act abolished the British National Oil Corporation and transferred its assets to the Agency.

The Energy Act 1976 is an act of the Parliament of the United Kingdom which empowered the Secretary of State to control the production, supply, acquisition and use of fuels and electricity, and included measures for the conservation of fuels.

The Petroleum Act 1868 is an Act of the Parliament of the United Kingdom to amend the Petroleum Act 1862 relating to the licensing, storage and sale of petroleum and petroleum products.

The Petroleum Royalties (Relief) and Continental Shelf Act 1989 is an Act of the Parliament of the United Kingdom which abolished petroleum royalties for gas fields in the southern basin of the North Sea and onshore, and enacted an agreement with the Republic of Ireland on the extent of the continental shelf.

The Petroleum (Consolidation) Act 1929 is an act of the Parliament of Northern Ireland which consolidates enactments relating to petroleum and petroleum products that already applied to other parts of the United Kingdom.

References

1 2 3 4 5 6 "Hansard, House of Lords, Petroleum Bill 1987". Hansard. 10 March 1987. Retrieved 26 August 2020.
1 2 Hill, Adrian D. G. (1987). "Notes and Comments Petroleum Act 1987". Journal of Energy and Natural Resources.
1 2 "Petroleum Act 1987". Legislation.gov.uk. 1987. Retrieved 26 August 2020.
1 2 "Decommissioning Programmes". a barrel full. Retrieved 26 August 2020.
1 2 "Petroleum Act 1998". legislation.gov.uk. 1998. Retrieved 26 August 2020.

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.

[:0-1] 1 2 3 4 5 6 "Hansard, House of Lords, Petroleum Bill 1987". Hansard. 10 March 1987. Retrieved 26 August 2020.

[:1-2] 1 2 Hill, Adrian D. G. (1987). "Notes and Comments Petroleum Act 1987". Journal of Energy and Natural Resources.

[:2-3] 1 2 "Petroleum Act 1987". Legislation.gov.uk. 1987. Retrieved 26 August 2020.

[:3-4] 1 2 "Decommissioning Programmes". a barrel full. Retrieved 26 August 2020.

[:4-5] 1 2 "Petroleum Act 1998". legislation.gov.uk. 1998. Retrieved 26 August 2020.

[1]

[2]

[3]

[4]

[5]