The High Court has given judgment dealing with a number of important issues concerning security for the costs of decommissioning North Sea petroleum infrastructure.
In Apache North Sea v NEO, Esso, Shell and BP [2023] EWHC 1345 (Comm), the High Court considered the terms of a decommissioning security agreement, which is a type of agreement that is commonly used in the North Sea to ensure that there is adequate security for the costs of decommissioning. The Court determined a number of issues of construction, including the impact of inflation on the sum of security to be provided by the current field owners and the proper mechanism for the resolution of disputes about the quantum of security between the current field owners and former field owners.
The judgment is also of more general interest for its extended consideration of the expert determination and the role of the court in the event of a dispute arising from such a determination.
Michael Fealy KC and Michael Watkins represented Esso, Shell and BP and were instructed respectively by Norton Rose Fulbright, CMS Cameron McKenna Nabarro Olswang and Herbert Smith Freehills.
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