The Federal Government wants oil and gas companies to foot the bill for decommissioning old rigs. 

Resources Minister Keith Pitt says the cost of decommissioning oil and gas rigs will hit $60 billion, and legislative changes are needed to avoid a repeat of the Northern Endeavour incident.

The Northern Endeavour is a 274-metre long floating oil facility permanently moored about 550 km northwest of Darwin. In recent years, the decommissioning cost for the aging production vessel has ended up on the Commonwealth’s books.

A small company funded by Woodside took on the title for Northern Endeavour, but was shut down and entered liquidation in February over workforce safety concerns.

“I’ve been very clear with industry that we need to make sure who is responsible and who is paying [for decommissioning],” Mr Pitt said.

Offshore petroleum companies sign decommissioning commitments when they first apply for approval for their developments, but a legal loophole means their liability can be sold to a new owner before the facilities’ statutory end-of-life.

The Federal Government last week put forth the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill, which includes a trailing liability provision that allows the government to call back previous owners of an asset to pay for decommissioning when a current owner cannot – as has been the case with the Northern Endeavour.

Fossil fuel lobby the Australian Petroleum Production and Exploration Association (APPEA) is opposed to the extended liabilities, saying they may “potentially encourage the final titleholder ... to walk away from the property and reallocate decommissioning costs to former titleholders”. 

The APPEA wants companies to instead be required to prove financial capacity to pay the cost of decommissioning their offshore rigs when they buy them. 

Labor resources spokesperson Madeleine King said the opposition would support the “pivotal reform” but criticised the government’s “lackadaisical approach to decommissioning”. 

Conservationists say the oil and gas industry brought the changes on itself by failing to meet decommissioning responsibilities.