Decommissioning sector ramps up
19 Nov 2015
The UK Continental Shelf (UKCS) is likely to see decommissioning expenditure of £16.9 billion by 2024, Oil & Gas UK has revealed.
The forecast, which forms part of the industry body’s annual Decommissioning Insight survey, suggests an expenditure increase of £2.3bn in comparison to that outlined in the 2014 study.
Oil & Gas UK operations director Oonagh Werngren said the increase was due largely to new projects entering the 10-year survey timeframe, as opposed to increased cost estimates from existing projects.
The key to sustaining the health of the sector is to take the initiative now to help an efficient decommissioning market emerge
Oil & Gas UK’s Oonagh Werngren
“Over the next decade, 79 platforms are forecast for removal across the UKCS - representing around 17% of some 470 installations that will require decommissioning over the next 30 to 40 years,” Werngren said.
“The survey confirms there are a small number of major decommissioning projects under way with well plugging and abandonment activities representing the largest category of expenditure with over 1,200 wells scheduled for work over the next decade,” she added.
The survey, in which 28 operators responded, suggests almost two thirds of decommissioning projects will actually take place post-2020 - though technological advancements and production cost efficiencies could defer the timing of many of these.
Despite the projected decommissioning activity however, the industry is maintaining its focus on offshore production in the North Sea for as long as it is safe and economically viable to do so, Werngren said.
“The key to sustaining the health of the sector is to take the initiative now to help an efficient decommissioning market emerge as part of, and alongside the industry’s continued and sustained programme of capital investment in new developments.”
Meanwhile, Oil & Gas UK announced yesterday its alignment with Decom North Sea, an industry body designed to focus on all aspects on the decommissioning value chain.
The collaboration will ensure a more efficient and effective decommissioning agenda for the North Sea, Oil & Gas UK said.
“Working together more closely would be in the best interests of the industry, the regulator and the members of both Oil & Gas UK and Decom North Sea,” said Karen Seath, Decom North Sea interim chief executive.
“If we can further align our activities, resources and strengths, I am convinced we will be able to offer all our members a more effective and efficient mechanism to tackle this challenging phase in the life cycle of our offshore oil and gas assets,” Seath added.
Decom North Sea and Oil & Gas UK is expected to commence their new partnership in the first quarter of 2016.
