Offshore staff
LONDON — The UK’s oil and gas sector invested £1.6 billion ($2.04 billion) last year in decommissioning redundant wells and infrastructure, according to the North Sea Transition Authority’s (NSTA) latest Decommissioning Cost and Performance Report.
This was higher than the total outlay for any of the previous four years, and activity will remain at high levels, the authors predict, with about £2 billion/year ($2.55 billion) to be spent on decommissioning over the next decade.
UK suppliers should secure close to 70% of the work associated with the decommissioning projects listed in Supply Chain Action Plans (SCAPs) lodged with the NSTA last year.
The NSTA praised the UK’s track record of performing cost-efficient and safe decommissioning as well as the various players’ willingness to share their learnings and data and embrace new technologies and innovative commercial models.
But the industry faces challenges such as rising demand for equipment, vessels and services from other regions and sectors such as offshore wind. Cumulatively, these have raised prices, lifting the total cost estimate for UK offshore decommissioning to £40 billion ($50.94 billion).
Nevertheless, the NSTA believes the industry can still meet its ultimate cost-efficiency target, lowering the estimate to £33.3 billion ($42.41 billion) by year-end 2028, assuming that operators can deliver their agreed schedules and commitments, strengthen their collaboration with the supply chain, and share their plans earlier, ensuring resources are available at the right time.
The NSTA is introducing new key performance indicators and benchmarks that have been co-developed with the industry and are supported by new datasets, including the length of time taken to complete certain tasks, numbers of crew members employed and types of vessels used.
These new metrics should provide a better overall view of how well decommissioning projects are being planned and executed, it added.
Pauline Innes, NSTA director of supply chain and decommissioning, said the NSTA would “continue to use its powers and influence to support the industry as it strives for continuous improvement, including through the development of new benchmarks.”
Bob Fennell, DaRT co-chair and North Sea executive vice president with Harbour Energy, added, “It is critical that North Sea operators work together to ensure that oil and gas assets, which at the end of their production life cannot be repurposed to support new technologies like carbon capture and storage, are decommissioned safely and in the most cost-effective manner. Collaborating and sharing data is an important first step to providing the supply chain with the visibility and confidence they require to meet UK demand for such works in a timely and cost-competitive way.”
08.09.2023
