Legally required costs to decommission and remediate a site at end of life, such as plugging wells or removing infrastructure. Operators budget ARO years in advance, which can create late-project work opportunities for subcontractors. Understand how ARO timelines affect contract scope, since decommissioning work often has strict regulatory deadlines.
ARO (Asset Retirement Obligations)
Related Terms
NDE (Non-destructive Examination)
ComplianceTesting method used to inspect welds, pipes, and structures for defects without damaging the material. Subcontractors performing NDE must hold recognised certifications such as CGSB or ASNT. Clients often require NDE sign-off before authorising progress payments or work acceptance.
LDAR (Leak Detection and Repair)
ComplianceA regulated programme requiring subcontractors to inspect equipment for fugitive emissions using specialised tools like optical gas imaging cameras. Findings must be documented and repaired within set timeframes under federal and provincial regulations. Field crews performing LDAR work often require specific training and certification to stay compliant on site.
Management of Change
ComplianceA formal process for documenting and approving any deviation from original scope, equipment, or procedures on a worksite. Subcontractors must follow the prime contractor's MOC process before making field changes. Skipping this step can void your contract or expose your crew to liability.
Hold Point
ComplianceA mandatory stop in work where a client or inspector must review and sign off before the subcontractor can proceed. Missing a hold point can void certifications or trigger costly rework. Always confirm hold points during project kickoff to avoid schedule delays.
Resource Road
ComplianceA privately maintained access road built to reach remote work sites in oil & gas or forestry operations. Subcontractors must follow strict user agreements covering speed limits, radio protocols, and load restrictions. Non-compliance can result in access suspension, halting your crew's ability to reach site.
PHMSA (Pipeline and Hazardous Materials Safety Administration)
ComplianceA U.S. federal agency that sets safety regulations for pipeline operations and hazardous materials transport. Subcontractors working on pipeline projects or hauling dangerous goods must meet PHMSA compliance standards. Non-compliance can result in fines, work stoppages, or contract termination.
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