A new report has forecast that expenditure for North Sea decommissioning work will be £15.2 billion over the next 10 years.
The 2019 Decommissioning Insight report was launched by Oil & Gas UK (OGUK) at the Offshore Decommissioning Conference held jointly with Decom North Sea.
The report forecasts the UK’s decommissioning activity and expenditure over the next decade, revealing that while activity on the UK Continental Shelf (UKCS) is expected to increase, expenditure will remain consistent at around £1.5 billion per annum.
The report findings show:
- Decommissioning now represents just under 10% of the oil and gas industry’s overall expenditure
- Pace of decommissioning expenditure remains steady at around £1.5 billion per year
- Over the next decade, forecast expenditure for UKCS decommissioning remains constant at £15.2 billion
- M&A activity in some areas of the North Sea is extending the life of offshore assets and moving decommissioning activity to the future
- Within the next ten years $85 (£67) billion will be spent decommissioning oil and gas assets in the global market
- To date, 9% of all the platforms installed on the UKCS have been decommissioned
OGUK’s decommissioning manager Joe Leask said: “With a firm grip on cost management, environmental and safety standards, our tenth annual Decommissioning Insight shows a healthy sector well-positioned to realise some £15bn of opportunities over the next decade.
“Our report underlines the significant intellectual capital anchored here in the UK.
“Ensuring this is shared is key to maintaining the competitiveness of the sector, enabling this homegrown industry to capture the lion’s share of an emerging global market some four times greater.
“We’re already seeing exciting new companies emerging as specialists in decommissioning, either offering full-scope solutions or focusing on specialising in areas including offshore well decommissioning and onshore dismantling and disposal.
“These innovative business models offer industry real choices whether operators carry out decommissioning themselves or pass the scope to those companies offering increasingly competitive solutions.
“Decommissioning is not the end of our industry; it offers a new beginning.
“Four years ago, industry stepped up to the challenge to cut decommissioning costs by 35 percent and we are well on the way to achieving that.
“We must apply the same collective determination and pioneering capabilities to deliver the net zero carbon challenge.
“This includes the re-use of old facilities for carbon capture and storage, presenting new opportunities to generate new value from old assets and help deliver the net zero future that industry has made to commitment to deliver.”