The 2024 revision of the Australian Energy Producers Method for estimating the cost of oil spill response
Tom Sullivan A * , David Horn A and Jason Medd BA
B
Tom is a Senior Environmental Engineer and Team Leader of GHD’s Marine and Aquatic Sciences team in Perth, Western Australia. Tom has 13 years of experience providing technical services to the Australian oil and gas industry, spanning oil spill modelling, drill cuttings dispersion modelling, chemical discharge modelling, impact assessment and financial assurance estimation. Tom led the delivery of the 2018 update of the APPEA Method and the 2024 update of the FA Method for estimating the costs of oil spill response. |
David Horn is a Chartered Professional Engineer with a PhD in Environmental Engineering. He has over 30 years of professional experience in environmental and civil engineering. David is a Principal at GHD, providing environmental consulting services to the oil and gas industry. He has been involved in projects including baseline environmental surveys, the preparation of Environmental Plans, oil spill modelling and oil spill contingency plans, incident management planning, and financial assurance advice. David was engaged by APPEA in 2014 to develop industry guidelines for estimating financial assurance requirements under the OPGGS Act (the APPEA Method) and to oversee the 2018 and recent 2024 review. He advises titleholders and NOPSEMA on financial assurance requirements. |
Jason is responsible for Australian Energy Producers offshore environment, health and safety and decommissioning policy and advocacy. His 25-year career includes senior positions within government petroleum policy and reform, covering unconventional oil and gas exploration and development, geothermal energy, hydrogen, environmental regulation, decommissioning, and stakeholder engagement. His industry experience includes a commercial advisor role for a joint venture partner for the Gorgon and Pluto LNG projects. Jason has a Bachelor’s Degree in Applied Chemistry, an MBA from Curtin University and a Graduate Certificate of Economics from Murdoch University. |
Abstract
In 2014, GHD and the Australian Petroleum Production and Exploration Association (APPEA), now named Australian Energy Producers Ltd, developed a standard method to estimate the level of financial assurance necessary to meet the requirements of the Offshore Petroleum and Greenhouse Gas Storage Act 2006. That method was further reviewed and updated in 2018 (the 2018 APPEA Method). In 2024, following a review of the 2018 APPEA Method’s suitability for estimating costs in the current market, GHD and the Australian Energy Producers produced the Australian Energy Producers 2024 Method for Estimating Levels of Financial Assurance (the 2024 FA Method). The 2024 FA Method was endorsed by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) in October 2024. The 2024 FA Method contains two parts – the General 2024 FA Method and the Vessel-based Activities (VBA) 2024 FA Method. Both methods were validated against an extensive set of contemporary case studies from the Australian oil and gas industry. This paper details the methodology undertaken to develop the 2024 FA Method, and the validation assessments undertaken. It provides additional context to support the cost relationships of the methods.
Keywords: 2024 FA Method, APPEA Method, Australian Energy Producers, Australian Energy Producers Method, financial assurance, General 2024 FA Method, GHD, NOPSEMA, oil spill response costs, OPGGS Act, VBA 2024 FA Method.
Tom is a Senior Environmental Engineer and Team Leader of GHD’s Marine and Aquatic Sciences team in Perth, Western Australia. Tom has 13 years of experience providing technical services to the Australian oil and gas industry, spanning oil spill modelling, drill cuttings dispersion modelling, chemical discharge modelling, impact assessment and financial assurance estimation. Tom led the delivery of the 2018 update of the APPEA Method and the 2024 update of the FA Method for estimating the costs of oil spill response. |
David Horn is a Chartered Professional Engineer with a PhD in Environmental Engineering. He has over 30 years of professional experience in environmental and civil engineering. David is a Principal at GHD, providing environmental consulting services to the oil and gas industry. He has been involved in projects including baseline environmental surveys, the preparation of Environmental Plans, oil spill modelling and oil spill contingency plans, incident management planning, and financial assurance advice. David was engaged by APPEA in 2014 to develop industry guidelines for estimating financial assurance requirements under the OPGGS Act (the APPEA Method) and to oversee the 2018 and recent 2024 review. He advises titleholders and NOPSEMA on financial assurance requirements. |
Jason is responsible for Australian Energy Producers offshore environment, health and safety and decommissioning policy and advocacy. His 25-year career includes senior positions within government petroleum policy and reform, covering unconventional oil and gas exploration and development, geothermal energy, hydrogen, environmental regulation, decommissioning, and stakeholder engagement. His industry experience includes a commercial advisor role for a joint venture partner for the Gorgon and Pluto LNG projects. Jason has a Bachelor’s Degree in Applied Chemistry, an MBA from Curtin University and a Graduate Certificate of Economics from Murdoch University. |
