Skip to content
Institute For Oil & Gas Training
OGI-1192 New

Decommissioning & Asset Retirement Obligations: Security Arrangements Training Course

Duration
5 days
CPD hours
15
Language
English
Next date
12 Oct 2026
View dates & register Download brochure

We use your details only to answer this enquiry. See our privacy policy.

Overview

The Decommissioning & Asset Retirement Obligations: Security Arrangements Training Course from Institute For Oil & Gas Training develops the financial, contractual and governance capabilities required to manage decommissioning liabilities and security arrangements across the oil and gas asset lifecycle. The course addresses the practical connection between Decommissioning & Asset Retirement Obligations, financial reporting, decommissioning security agreement structures, liability allocation, tax treatment and regulatory decommissioning approval.

Decommissioning is a long-term financial and contractual obligation that requires coordinated decisions across finance, asset management, legal, commercial, tax, treasury, joint venture and regulatory functions. Security arrangements must provide appropriate protection against future decommissioning exposure while remaining aligned with ownership structures, contractual responsibilities, asset transfers and changing estimates of retirement costs.

For oil and gas companies, the challenge extends beyond calculating a provision. Organisations must understand how the underlying liability is allocated, how security is structured, how changes in estimated costs affect financial statements, and how contractual arrangements respond when an interest in an asset changes hands. These considerations become particularly important in mature assets, late-life operations, portfolio transactions, joint ventures and asset transfers where responsibility for future decommissioning expenditure requires careful assessment.

This course from Institute For Oil & Gas Training focuses on the relationship between accounting provisions and the commercial security mechanisms that support decommissioning obligations. Participants examine decommissioning security agreement structures, letters of credit and trust funds, parent company support, cash-backed arrangements and other approaches used to protect against future exposure. The programme also addresses the relationship between security requirements and the underlying residual liability.

A central theme is the distinction between transferring an economic interest and transferring the underlying decommissioning liability. Asset transactions do not automatically eliminate historical or continuing obligations. Participants therefore examine transfer of decommissioning liability, residual liability, joint and several liability and the contractual mechanisms used to allocate and secure those exposures.

The financial reporting dimension is built around recognised IFRS requirements. IAS 37 provides the principal requirements for provisions, contingent liabilities and contingent assets, while IFRIC 1 addresses changes in existing decommissioning, restoration and similar liabilities. IFRIC 5 is also relevant where rights arising from interests in decommissioning, restoration and environmental rehabilitation funds are considered.

The programme also addresses provision reassessment and the factors that drive changes in recognised liabilities, including updated cost estimates, timing assumptions and discount rates. IFRIC 1 specifically addresses changes arising from revisions to estimated decommissioning costs and changes in market-based discount rates.

Regulatory requirements form another core component. In the UK offshore context, the Petroleum Act 1998 establishes the statutory framework for abandonment programmes, including requirements concerning approval before decommissioning activities proceed in circumstances covered by the legislation. The course uses this framework as a practical reference point while recognising that regulatory requirements vary by jurisdiction and asset location.

Tax considerations are integrated into the financial and commercial analysis. UK oil and gas companies operate within specific rules governing decommissioning expenditure and related reliefs. HMRC guidance identifies provisions within the Capital Allowances Act 2001 covering qualifying decommissioning expenditure, while Decommissioning Relief Deeds provide a mechanism for defined tax certainty in specified circumstances.

The course also considers how security requirements interact with tax relief and cash planning. Recent UK government guidance confirms that Decommissioning Relief Deeds define a minimum level of tax relief in specified circumstances, while the Energy Profits Levy does not provide a basis for payment under a Decommissioning Relief Deed for the unavailability of decommissioning tax relief.

Institute For Oil & Gas Training positions these topics within a corporate decision-making environment. The emphasis is on interpreting contractual obligations, evaluating security structures, reconciling accounting and commercial positions, challenging provision assumptions and establishing governance processes that support accurate financial reporting and controlled decommissioning exposure.

Participants work with realistic oil and gas scenarios involving joint ventures, asset acquisitions and disposals, late-life assets, security calls, provision movements, changing ownership interests and potential counterparty default. The objective is to develop practical judgement that supports finance leadership, treasury governance, commercial negotiations and asset retirement planning.

The course is particularly relevant to organisations managing offshore and onshore petroleum assets where decommissioning liabilities extend across multiple reporting periods and contractual relationships. It supports stronger communication between finance, legal, commercial, tax, treasury and asset teams and establishes a common understanding of how security arrangements interact with the underlying obligation.

Objectives

  • Explain the financial and commercial principles underlying Decommissioning & Asset Retirement Obligations

  • Identify the principal drivers of decommissioning liabilities across the asset lifecycle

  • Assess the relationship between decommissioning provisions and security arrangements

  • Evaluate decommissioning security agreement structures

  • Compare letters of credit and trust funds as security mechanisms

  • Assess residual liability following asset transactions and changes in participating interests

  • Analyse transfer of decommissioning liability within contractual and regulatory frameworks

  • Interpret joint and several liability in petroleum joint venture arrangements

  • Apply relevant IFRS requirements to decommissioning and restoration obligations

  • Understand the role of IAS 37 in recognising and measuring provisions

  • Apply IFRIC 1 principles to provision reassessment

  • Assess the financial implications of changes in cost estimates and discount rates

  • Understand the accounting considerations associated with decommissioning funds

  • Evaluate the relationship between security requirements and expected decommissioning exposure

  • Examine tax relief on decommissioning expenditure

  • Understand the role of Decommissioning Relief Deeds within applicable UK oil and gas tax arrangements

  • Connect regulatory decommissioning approval with financial planning and liability management

  • Identify governance controls for monitoring security arrangements

  • Strengthen cross-functional coordination between finance, treasury, tax, legal and asset teams

  • Support more robust reporting of decommissioning liabilities and related security arrangements

  • Improve decision-making during asset acquisitions, disposals and transfers

  • Strengthen controls over long-term decommissioning exposure

Training methodology

Institute For Oil & Gas Training uses a practical corporate delivery model focused on the decisions professionals make when managing decommissioning liabilities and security arrangements.

The course combines technical briefings with case studies, financial analysis, contract-based exercises, group discussions and scenario simulations. Participants examine the complete lifecycle of a decommissioning obligation rather than treating accounting, security, tax and regulatory requirements as isolated subjects.

Case Studies

Case studies examine realistic petroleum asset scenarios involving decommissioning obligations, joint venture structures and changes in asset ownership. Participants assess the original liability, security requirement, contractual allocation and financial reporting implications.

Security Arrangement Exercises

Participants analyse different approaches to securing decommissioning exposure, including letters of credit and trust funds, cash-backed mechanisms and contractual support. Exercises focus on the relationship between the secured amount, expected liability and counterparty exposure.

Provision Reassessment Scenarios

Practical scenarios demonstrate how changes in estimated decommissioning expenditure, timing and discount assumptions affect the provision. Participants review the implications of provision reassessment under relevant IFRS requirements, including IFRIC 1.

Asset Transfer Simulations

Participants assess asset transfer scenarios involving changes in participating interests and contractual responsibility. The exercises focus on transfer of decommissioning liability, residual liability and joint and several liability.

Regulatory Scenarios

Regulatory scenarios require participants to consider the relationship between financial planning, decommissioning programmes and regulatory decommissioning approval. The UK Petroleum Act 1998 is used as a recognised reference framework for offshore abandonment programmes.

Cross Functional Group Exercises

Finance, treasury, tax, legal, commercial and asset management perspectives are integrated into group exercises. This approach reflects the cross-functional nature of decommissioning governance and improves the ability to evaluate decisions from both financial and operational perspectives.

Organisational impact

The course provides organisations with stronger internal capability for managing decommissioning exposure as a financial, contractual and governance issue. Improved understanding of security structures helps organisations align the level and form of security with underlying obligations and contractual requirements.

Stronger provision management supports more disciplined financial reporting. Finance teams gain a clearer understanding of the assumptions behind decommissioning liabilities and the importance of structured provision reassessment. This supports better control over changes arising from revised cost estimates, timing assumptions and discount rates.

The programme also strengthens coordination between finance and operational functions. Decommissioning estimates depend on technical and operational assumptions, while financial provisions and security arrangements depend on how those assumptions are translated into contractual and financial obligations. A shared framework improves the quality of communication between technical specialists, accountants, commercial teams and treasury professionals.

Better understanding of decommissioning security agreements supports stronger counterparty and credit risk management. Organisations can assess the purpose of different security mechanisms and establish more effective monitoring of required instruments, expiry dates, coverage levels and contractual triggers.

The course also strengthens asset transaction governance. Asset acquisitions and disposals require detailed consideration of continuing decommissioning exposure. Participants develop the capability to identify residual liability and assess whether contractual arrangements provide adequate protection following a transfer.

This is particularly important where decommissioning responsibility interacts with joint venture arrangements. Understanding joint and several liability helps organisations assess potential exposure beyond their immediate economic share and incorporate appropriate controls into commercial and financial processes.

Tax awareness provides another organisational benefit. UK guidance establishes specific rules for decommissioning expenditure and related relief, including provisions under the Capital Allowances Act 2001 and arrangements involving Decommissioning Relief Deeds. Understanding these requirements supports better coordination between tax, finance and treasury functions.

The programme also supports regulatory readiness. In the UK offshore sector, the Petroleum Act 1998 provides a statutory framework for abandonment programmes and requires an approved programme in circumstances covered by the legislation before decommissioning activity can proceed.

Overall, organisations gain stronger governance over a liability that can extend across many years, multiple owners and changing asset conditions.

Personal impact

Participants gain a practical understanding of how decommissioning obligations affect financial statements, contractual exposure, treasury arrangements, taxation and asset lifecycle decisions.

Finance professionals strengthen their ability to interpret provisions, challenge assumptions and understand the accounting consequences of provision reassessment. They also gain greater confidence in connecting IFRS requirements with the commercial circumstances that generate the underlying liability.

Treasury professionals develop stronger capability in evaluating security instruments and monitoring financial protections associated with decommissioning obligations. This includes understanding the commercial role of letters of credit and trust funds and assessing how security arrangements interact with counterparty exposure.

Commercial and contract professionals strengthen their ability to identify decommissioning obligations within asset transaction documentation and joint venture arrangements. Particular attention is given to residual liability, transfer of decommissioning liability and joint and several liability.

Tax professionals gain greater awareness of how decommissioning expenditure and security structures interact with applicable tax provisions. UK tax treatment is considered using current HMRC guidance, including provisions covering decommissioning expenditure and Decommissioning Relief Deeds.

Asset and operations professionals gain a stronger understanding of how technical decommissioning decisions influence financial provisions, security requirements and regulatory processes.

Managers and senior specialists also gain a cross-functional perspective that supports better communication across finance, treasury, legal, commercial, tax and asset teams.

Who should attend

  • Chief Financial Officers and Finance Directors — To strengthen oversight of material decommissioning liabilities, financial reporting and long-term financial exposure.

  • Financial Controllers — To improve control over provision recognition, measurement, reassessment and reporting.

  • Financial Reporting Managers — To strengthen application of IAS 37 and IFRIC 1 to decommissioning obligations.

  • Oil and Gas Accountants — To connect accounting treatment with operational and contractual decommissioning circumstances.

  • Treasury Managers and Specialists — To evaluate and monitor decommissioning security instruments and funding structures.

  • Tax Managers and Tax Advisers — To assess tax relief on decommissioning and its interaction with financial planning.

  • Commercial Managers — To assess liability allocation, security obligations and commercial exposure during asset transactions.

  • Contracts and Legal Professionals — To interpret contractual provisions relating to security, liability transfer and joint venture exposure.

  • Asset Managers — To integrate decommissioning liabilities into late-life asset and portfolio decisions.

  • Joint Venture Managers — To manage shared decommissioning obligations and understand joint and several liability.

  • Decommissioning Managers — To strengthen coordination between technical decommissioning plans, financial provisions and security requirements.

  • Financial Planning and Analysis Professionals — To improve financial modelling and forecasting of long-term decommissioning expenditure.

  • Risk Managers — To identify and monitor financial, contractual and counterparty risks associated with retirement obligations.

  • Senior Petroleum Professionals — To develop a broader understanding of financial and commercial consequences across the asset lifecycle.

Course outline

This module establishes the financial, contractual and commercial foundations of Decommissioning & Asset Retirement Obligations. It examines how obligations arise, how they are identified and how they develop throughout the petroleum asset lifecycle.

  1. IAS 37 Provisions

    • IAS 37 establishes requirements for provisions, contingent liabilities and contingent assets.

    • A provision addresses a liability where timing or amount is uncertain.

    • The standard provides the principal IFRS framework for assessing decommissioning provisions.

    • Participants examine how present obligations and expected resource outflows affect financial reporting.

    Learning Outcomes

    • Identify the principal components of a decommissioning liability

    • Understand the recognition principles relevant to decommissioning provisions

    • Distinguish provisions from contingent liabilities

    • Evaluate the financial reporting consequences of changing assumptions

    • Establish a structured approach to decommissioning liability analysis

This module focuses on the mechanisms used to secure future decommissioning obligations and protect stakeholders against non-performance. It examines the commercial relationship between the estimated liability and the security package.

  1. IFRIC 5 Decommissioning Funds

    • IFRIC 5 addresses rights arising from interests in decommissioning, restoration and environmental rehabilitation funds.

    • The interpretation is relevant when entities participate in arrangements established to fund future restoration obligations.

    • Participants examine the relationship between fund interests and the associated decommissioning obligations.

    Learning Outcomes

    • Evaluate the purpose of different decommissioning security mechanisms

    • Assess letters of credit and trust funds within security structures

    • Identify key controls for monitoring security coverage

    • Analyse the relationship between provision values and security requirements

    • Strengthen governance over long-term decommissioning funding arrangements

This module examines the contractual and financial consequences of changing ownership interests in petroleum assets. It focuses on the distinction between transferring an economic interest and transferring the underlying decommissioning obligation.

  1. Petroleum Act 1998

    • The Petroleum Act 1998 establishes UK statutory provisions governing abandonment of offshore installations and submarine pipelines.

    • Section 29 provides for the submission of abandonment programmes following specified notices.

    • The legislation also provides a framework for approval of abandonment programmes.

    • Participants use the framework to understand the connection between regulatory responsibility and commercial liability.

    Learning Outcomes

    • Analyse decommissioning liability during asset transactions

    • Identify potential residual liability after a transfer

    • Assess joint and several liability within joint venture structures

    • Evaluate contractual protections for decommissioning exposure

    • Connect regulatory responsibility with commercial liability allocation

This module examines how decommissioning provisions change over the life of an asset and how those changes affect financial reporting. Participants analyse the relationship between updated estimates, discount rates, asset values and reported liabilities.

  1. IFRIC 1 Decommissioning Liabilities

    • IFRIC 1 addresses changes in existing decommissioning, restoration and similar liabilities.

    • Changes can arise from revisions to estimated costs or changes in market-based discount rates.

    • The interpretation addresses liabilities recognised as part of property, plant and equipment or right-of-use assets and recognised under IAS 37.

    • Participants examine the practical effect of reassessment on the related asset and financial reporting.

    Learning Outcomes

    • Conduct structured provision reassessment

    • Identify the key drivers of provision movements

    • Assess changes in cost estimates and discount rates

    • Understand the accounting implications of revised decommissioning liabilities

    • Improve documentation and governance of decommissioning assumptions

This module brings together tax, regulatory and governance considerations affecting decommissioning security arrangements. It focuses on maintaining an integrated approach to liability management, regulatory approval and financial planning.

  1. Capital Allowances Act 2001

    • The Capital Allowances Act 2001 contains provisions governing certain qualifying decommissioning expenditure for oil and gas companies.

    • HMRC identifies sections 162 to 165 as relevant provisions for decommissioning expenditure associated with ring fence trades.

    • Section 165 addresses specified decommissioning expenditure after cessation of a ring fence trade.

    • Participants examine how tax treatment interacts with decommissioning expenditure and financial planning.

    Learning Outcomes

    • Assess the tax considerations associated with decommissioning expenditure

    • Understand the role of Decommissioning Relief Deeds

    • Connect tax treatment with security arrangement planning

    • Evaluate regulatory decommissioning approval requirements

    • Establish stronger governance over decommissioning liabilities and security arrangements

    • Integrate finance, treasury, tax, legal and asset management perspectives into decommissioning decisions

Certificate

Attendees receive a Certificate of Completion from Institute For Oil & Gas Training upon finishing the course.

The certificate is issued to participants who satisfy the course attendance requirement and complete the programme as delivered by Institute For Oil & Gas Training.

Course dates

  • Europe

    Middle East

    Asia

    Africa

    North America

    Online

    Fee: £3,900

  • Europe

    Middle East

    Asia

    Africa

    North America

    Online

    Fee: £3,900

  • Europe

    Middle East

    Asia

    Africa

    North America

    Online

    Fee: £3,900

  • Europe

    Middle East

    Asia

    Africa

    North America

    Online

    Fee: £3,900

Fees include tuition, course materials and refreshments. Need different dates or a different city? Ask about your preferred date.

Frequently asked questions

What does the Decommissioning & Asset Retirement Obligations course cover?

The course covers decommissioning provisions, security arrangements, decommissioning security agreements, letters of credit and trust funds, liability transfer, joint venture exposure, tax relief, regulatory approval and IFRS reporting.

Who should attend this decommissioning training course?

The programme is designed for finance, treasury, tax, commercial, legal, contracts, asset management, joint venture, risk and decommissioning professionals working within oil and gas organisations.

How is the course delivered?

Institute For Oil & Gas Training uses corporate case studies, practical exercises, scenario analysis, group discussions and simulations based on realistic oil and gas decommissioning and asset transfer situations.

Does the course cover IFRS requirements?

Yes. The programme covers IAS 37, IFRIC 1 and IFRIC 5, with practical attention to provisions, provision reassessment, decommissioning funds and financial reporting implications.

Does the course address tax relief and regulatory requirements?

Yes. The course examines tax relief on decommissioning, Decommissioning Relief Deeds, qualifying expenditure and regulatory decommissioning approval, including relevant UK frameworks such as the Capital Allowances Act 2001 and Petroleum Act 1998.

Next: 12 Oct 2026

4 dates available

Register Now

Related training courses

Get the training calendar in your inbox

New courses, dates and industry insight. No more than twice a month.