Asset Closure And The True Cost Of Late Decisions | Nexus

Asset closure and the true cost of late decisions

23 March 2026
Video failed to load!
Please check your internet connection or try reloading the page.
00:00:00:18 - 00:00:03:18
The provisions put aside for closure,
are nowhere near enough.

00:00:03:20 - 00:00:07:11
They're underestimated by hundreds
of millions of dollars in some cases,

00:00:07:20 - 00:00:09:03
billions of dollars.

00:00:09:03 - 00:00:12:13
closure is a line item
that's the traditional way

00:00:12:15 - 00:00:13:11
of looking at it.

00:00:19:08 - 00:00:20:10
Time and time again,

00:00:20:10 - 00:00:23:22
we see, corporations
say no, we'll leave that to the end

00:00:23:22 - 00:00:26:22
until we figure out what we're going to do
and how are we going to do it.

00:00:27:00 - 00:00:28:13
But it's too late.

00:00:28:13 - 00:00:32:18
if you design your closure
or your transition to a certain endpoint

00:00:33:01 - 00:00:36:01
and a key stakeholder comes in and says,
no, I don't like that,

00:00:36:02 - 00:00:39:02
it's too late to change
and if you have to change it,

00:00:39:06 - 00:00:41:06
That's where it cost
hundreds of millions of dollars

00:00:41:06 - 00:00:44:06
and even billions of dollars to sort out.

00:00:46:21 - 00:00:49:20
Closure has been treated as a liability,

00:00:49:20 - 00:00:51:17
a cost to the, to the bottom line.

00:00:52:07 - 00:00:57:06
And when companies are looking for that
next opportunity, next development,

00:00:57:08 - 00:01:00:08
as they go through the final investment
decision or FID,

00:01:00:19 - 00:01:05:08
And typically,
those costs come in after that facility,

00:01:05:08 - 00:01:07:23
that operation has been making a profit.

00:01:07:23 - 00:01:10:12
So it's a direct cost
to the impact to the bottom line.

00:01:15:18 - 00:01:18:08
So switching that mindset from

00:01:18:08 - 00:01:23:01
closure being a liability and a cost
to the bottom line, to the transition

00:01:23:04 - 00:01:27:19
to a potential asset or unlocking
the potential value at closure.

00:01:28:02 - 00:01:30:22
So looking at different options
down the track

00:01:30:22 - 00:01:35:21
and going back to the boardroom
or the FID decision making process,

00:01:35:23 - 00:01:40:01
what senior management should be doing
is asking their teams

00:01:40:01 - 00:01:43:19
the question, around closure.
What options have you looked at for closure?

00:01:43:19 - 00:01:45:23
Okay, you've given me this
this one line item,

00:01:45:23 - 00:01:49:02
that we're typically finding that
that's underestimated.

00:01:49:05 - 00:01:52:21
What additional options have you looked
at down the track so that we can either

00:01:52:21 - 00:01:58:12
break even during closure
or transition to another valuable asset.

00:01:58:16 - 00:02:01:10
And valuable can be, the net environmental benefit,

00:02:01:10 - 00:02:04:15
it can be a social benefit
or it can be a monetary benefit as well.

00:02:21:19 - 00:02:25:03
Learn more with Nexus published by GHD.

00:02:25:22 - 00:02:27:06
Where ideas connect.
Asset closure is often treated as something to deal with at the end. A single line item. A future problem. Yet time and again, the provisions set aside fall far short of what is required, sometimes by hundreds of millions or even billions.

When closure planning is deferred, options narrow. In part 1 of our Reimagining Asset Closure series, Julian Gould explores why asset closure needs to be part of earlier strategic planning.

Get direct insights on:

  • Why closure costs are so frequently underestimated
  • How late-stage decisions drive avoidable financial exposure
  • The role of boards and senior leaders in challenging closure assumptions
  • What it means to plan for closure before final investment decisions are locked in
  • How asset closure can deliver environmental, social or monetary value when approached differently

 

Watch now to understand how earlier thinking on asset closure can change outcomes at the end of an asset’s life.
Engineers are checking a turbine machine

Smarter insights,
tailored to your industry

Cut through the noise with ideas that speak to your world.
Explore Nexus Magazine

We value your privacy

This website makes use of cookies to enhance your browsing experience and provide additional functionality, by either storing data on, or collecting data from, your computer.

We use necessary cookies to make our site work. Necessary cookies enable core functionality such as security, network management, and accessibility.

We also use information collected from cookies for various purposes, for example, for analysis of website usage patterns. Information about the type, use and purpose of the cookies we use is detailed in our Cookies Policy

GHD is committed to protecting your privacy. Please see our Privacy Policy for more information.

Cookies, other than necessary cookies, will only be used with your consent. By clicking Accept you give us consent to use all cookies. By clicking Reject All only necessary cookies will be used. You may disable necessary cookies by changing your browser settings, but this may affect website functions.

Reject all