£17bn To Be Spent on North Sea Decommissioning Over Next Decade
More than a hundred oil platforms located between the UK and Norwegian continental shelves will be removed over the next decade as part of decommissioning operations expected to cost some £17bn.
Overall, 1,800 wells will have to be sealed and 7,500km of pipelines dismantled, providing a massive opportunity to the decommissioning industry.
According to a report by Oil & Gas UK, the decommissioning market was worth about £2bn last year. By 2025, £17.6bn will be spent, up from £16.9bn for the 2015-24 forecast.
“Of the estimated £17.6 billion of decommissioning expenditure on the UKCS over the next 10 years, more than 50 per cent of this market will be found in the central North Sea,” said Mike Tholen, Oil & Gas UK’s upstream policy director.
“The UK’s supply chain will need to focus on developing a high-quality, cost-efficient and competitive decommissioning capacity to make the most of the opportunity and provide a range of goods and services that can not only be deployed in the UK but also exported overseas.”
However, the Decommissioning Insight 2016 report also states up to 20 billion barrels of oil and gas still can be retrieved from the North Sea.
“If the UK is to continue to gain the full economic benefit from its oil and gas resource, it is important that the industry continues to work with the Oil and Gas Authority as well as with HM Treasury to attract fresh investment, avoid premature decommissioning, retain the critical infrastructure needed to access future reserves and ensure decommissioning is carried out in a timely and most cost-effective way,” Tholen said.
Scotland’s energy minister Paul Wheelhouse commented: “Decommissioning is just one of the opportunities along with opportunities arising to the sector’s expertise and capabilities in innovation to ever more efficiently recover the substantial oil and gas resources remaining in the North Sea, and to harness transferable skills to develop offshore renewables – all of which have the potential to deliver enormous economic benefits for the whole country.”
Source: E&T
