OT27050 - Abandonment and Decommissioning

Residual liability

Costs of monitoring toppled installations or restoring the seabed following decommissioning may be imposed by an abandonment programme approved by the Secretary of State under the Petroleum Act 1998.

Seabed monitoring costs charged to the Profit and Loss account will normally be allowable as revenue expenditure of a continuing ring fence trade or wider petroliferous trade (if the ring fence trade has ceased).

Seabed restoration costs may be capital and within the capital allowances provisions. Depending on the facts, capital allowances may be due under either the MEA code or as Machinery or Plant decommissioning expenditure ( OT27005).