Repurposing Offshore Infrastructure for Clean Energy (ROICE) vs. Decommissioning – Commercial Considerations
Abstract The Repurposing Offshore Infrastructure for Clean Energy (ROICE) Program, a collaboration of the energy industry and University of Houston, proposes extending the life of up to 1,500 oil and gas platforms in the Outer Continental Shelf of the Gulf of Mexico, USA. Rather than decommissioning or converting them to underwater reefs at the end of their oil and gas production phase, the platforms could be transformed for 10–20+ years of renewable energy development, such as green hydrogen production or carbon dioxide injection and storage, resulting in significant economic, environmental, and social benefits. ROICE has already published papers on the technical and regulatory considerations for such repurposing projects. This paper focuses on the commercial considerations needed to ensure ROICE projects are economically viable and sustainable for all involved. There are potentially many entities that can come together to progress a repurposing project, including oil and gas asset owners, operators, investors, developers, contractors, manufacturers, and regulators. This paper looks at possible combinations of these entities in a ROICE project team and the various commercial agreements that will be needed to ensure a mutually successful outcome. The paper proposes adapting existing industry agreements and templates to suit, including asset transfer agreements (ATA), asset purchase agreements (APA) and joint purchasing agreements (JOA). An ATA or APA can be drafted to address the obligations and issues involved in the sale or transfer of an existing oil and gas facility to the developer, operator, non-operating interests, and financial investors in a ROICE project, while a JOA can be drafted to govern the rights, obligations, and financial requirements of the parties involved in the development and operation.