Effective decommissioning financial assurance: strengthening trust in the energy system
The oil and gas industry plays an essential role in today’s energy system, and that role comes with a responsibility to operate, and exit, safely, transparently and sustainably.
As oil and gas assets mature, decommissioning is no longer a distant end-of-life consideration. It is a defining test of the industry’s credibility, and one that speaks directly to environmental stewardship, fiscal responsibility and trust between operators, governments and society.
IOGP’s new Report 812 – Effective decommissioning financial assurance addresses this challenge by providing practical guidance to help ensure that decommissioning commitments are properly planned, adequately funded and delivered when required.
Matt Niewenhous, ExxonMobil, and Co-Chair of the Decommissioning Financial Assurance Expert Group, explains:
“Decommissioning is a critical stage in oil and gas projects, often requiring significant funding after production has ended. This framework provides stakeholders with practical considerations to strengthen financial planning, support timely execution, and balance commercial, regulatory, and societal priorities.”
Christian Schwarck, Shell, and Co-Chair, adds:
“This work provides IOGP members with new guidance on available financial security instruments for decommissioning, as well as the key priorities that should be considered to help ensure that decommissioning work is funded and implemented in a timely manner.”
The Report reflects IOGP’s role as a trusted convener of industry expertise, translating operational experience into clear, principles-based guidance that supports better decision-making across the energy system. Developed by the IOGP Decommissioning Financial Assurance Expert Group, the report sets out recommendations for operators, host governments and stakeholders on how to design effective, transparent and sustainable financial assurance frameworks.
The guidance emphasizes creditworthiness, flexibility in assurance instruments, appropriate timing, and cost recoverability, while also addressing governance, divestment scenarios, and residual liabilities. Adoption of this framework is voluntary and should be tailored to local regulatory contexts. The document is intended to foster alignment and discussion among contractual parties and promote confidence in the long-term financial planning of decommissioning activities.
Niewenhous and Schwarck thanked the expert group that developed this financial assurance guidance. “Collaborating with such a dedicated team made this work both rewarding and impactful,” they said.
