Field Wide Decommissioning Security Agreement

In recent years, much of M&A`s business on UKCS has involved majors and other large players that have divested non-core assets, often interests in mature/productive late-living sectors, attempting to free up organisational capacity and capital for investments and projects in more promising regions. Often, the potential buyers of these assets are smaller, less well-capitalized companies that may be better able to use the remaining reserves and/or extend the life of these fields and carry out dismantling on a lower cost basis. In general, vendors continued to try to achieve the “clean break” model with respect to downgrade commitments. Under this model, the buyer agrees to take all downgrading debts into a sales contract and provides the seller with collateral for such debts under a downgrading security agreement (DSA). Such a guarantee is usually a non-appeal credit at the request of a bank or a parent company guarantee. . . .

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