OT28120 | Decommissioning and abandonment: general decommissioning expenditure: meaning of abandonment programme

Abandonment programme has the same meaning as in Part IV of the Petroleum Act 1988 and is defined in Section 29 of that Act as a programme required by the Secretary of State setting out the measures proposed to be taken in connection with the abandonment of an offshore installation or submarine pipeline.

An abandonment programme may be required in circumstances other than the closing down of the whole or part of an oil field, e.g. to remove an installation in mid field life, and so the ‘closing down’ condition for the allowance must be considered separately.

The decommissioning costs had to be incurred ‘wholly or substantially’ to comply with an abandonment programme. This phrase was used to ensure that relief was not lost because of minor deviations from the programme.

Relief could be given for expenditure incurred before an abandonment programme was approved, provided that it was incurred to comply with the programme as approved or with any condition to which the approval of the programme was subject. In particular, relief could be given for expenditure incurred before 7 August 2000 if it was incurred to comply with an abandonment programme approved after that date.

The condition that the expenditure is incurred as part of an abandonment programme to qualify for the special allowance was removed by FA2008 (see OT28080).