Decommissioning; the £60 billion prize

When North Sea oil and gas came to prominence in the 1970s, many thought that we might have an industry that would last 10 years or so.

Almost 50 years later and still producing, the UKCS is moving from one of the world’s most mature plays to an ultra mature region. The decommissioning of our aging assets is firmly on the agenda and is set to be big business. Its importance is highlighted by the fact that, for the first time ever, Offshore Europe has established a dedicated decommissioning zone. 

“There is a huge window of opportunity to become pioneers in decommissioning.Andrew Jones MP, Exchequer Secretary to the UK Treasury, outlined at Offshore
Europe the prize that decommissioning presented to the oil and gas industry. He said that approximately 10 percent of the North Sea’s facilities had been
decommissioned to date. Over the next decade, another 100 offshore platforms will be either fully or partially removed and 1,800 wells abandoned.

We have the chance to make ourselves the go to global expert. That means thousands of highly skilled job opportunities and export opportunities as businesses take their place in a worldwide, world class supply chain,” he said.

Regulatory body the Oil and Gas Authority (OGA) has estimated that decommissioning all of the U.K.’s current and future offshore facilities, pipelines,
wells and terminals will cost almost £60 billion. But it has set a target of reducing that to less than £39 billion.

Is this achievable? How can we make the most of this opportunity and to what degree are we advancing our own demise by increasing our focus on
decommissioning activity?

Andy Samuel, OGA’s chief executive, had something to say on the matter. On Day Three of Offshore Europe, I managed to get his thoughts on how
decommissioning can become the latest successful chapter in the history of the U.K. oil and gas industry.