Sent to the industry on 15 January 2020, the letter draws attention to section 25, subsection 3, litera d of the management regulations.
This specifies that the PSA must be informed when the decision is taken to initiate a process for possible lifetime extension of an NCS facility. The operator must secure consent before using offshore and onshore facilities beyond the lifetime and assumptions which form the basis for approval of the plan for development and operation (PDO) or plan for installation and operation (PIO).
A revision of the Norwegian Oil and Gas Association’s guidelines 122 was issued in 2017, and the PSA regards these as good guidance for the process of reaching a decision to extend producing life and a good tool for assisting operators to document prudent operation in the period of extension.
However, the authority has found that more of the consent applications it is now receiving for extending production lifetime are missing conclusions about the measures required to achieve safe operation during such a period.
Furthermore, it sees that the necessary analyses and assessments which should underpin such conclusions are either not carried out or insufficiently documented with regard to health, safety and the environment for activities and offshore/onshore facilities covered by the application.
When applying to extend producing life, the operator must document that facilities and activities will be prudent in the period applied for. See sections 10 and 11 of the framework regulations on prudent activities and risk-reduction principles respectively.
Section 23 of the framework regulations requires the responsible party to prepare and retain material and information necessary to ensure and document that the activities are planned and carried out in a prudent manner.
Requirements for consent applications relating to lifetime extension and their content follow from section 25, subsection 3, litera d of the management regulations and from section 26.
According to subsection 1, litera g of the latter, applications for consent pursuant to section 25 must contain: “a description of the analyses and assessments that have been carried out as regards health, safety and the environment for the activities and offshore or onshore facilities covered by the application, and the results and measures that will be implemented as a result of these assessments.”
Furthermore, subsection 4 of the same section states: “When applying for a lifetime extension pursuant to section 25, third subsection, litera d, the application shall also contain a summary of the results of analyses and assessments of the facility's technical condition which is the basis for the application.”
In describing the assessments made, the application should clearly present possible technical and operational weaknesses which are significant for the decision on lifetime extension. See also section 11 of the management regulations on the basis for making decisions and decision criteria as well as the guidelines to section 26 of the same regulations on the content of extended lifetime applications.
Where existing facilities are concerned, older technical requirements can be applied. See section 82, no 2 of the facilities regulations. This is conditional on the requirement for prudent operation also being met.
In cases where the responsible party has opted to apply older technical requirements to a facility, questions may arise over time about how the facility’s technical condition compares with today’s standard for prudent operation.
It would be natural for the operator to assume that the requirements in today’s facilities regulations specify an acceptable level for measuring such prudent operation against.
An assessment of this kind comes in addition to the overview of possible nonconformities from the older technical requirements which the responsible party has chosen to apply pursuant to section 82, no 2 of the facilities regulations and the way they are applied with regard to risk reduction.