Offshore staff
ABERDEEN, UK — Decommissioning accounted for 12% of overall oil and gas expenditure across the UK Continental Shelf in 2022, according to Offshore Energies UK’s (OEUK) Decommissioning Insight 2023 report.
The percentage could climb to 25% by 2032, the association added, with decommissioning investments potentially exceeding field capex by 2040, depending on the UK’s future fiscal regime.
The report also provides an overview of requirements for decommissioning and recycling hundreds of oil and gas platforms throughout the North Sea, including those in Norwegian, Danish and Dutch waters.
OEUK counts 283 active oil and gas fields in the UK North Sea, 180 of which it expects to cease production by 2030. And between now and 2027, more than 1,000 North Sea wells will be plugged and abandoned, with 100,000 t of surface and seabed structures to be removed in 2026 alone.
Ricky Thomson, OEUK decommissioning manager and author of the report, said, “There are dramatic opportunities for growth [for the supply chain], but we need proper planning, and not just of hugely complex individual projects, but also of the specialized equipment and the efficient deployment of our highly skilled workforce.
“For the UK supply chain to work with maximum efficiency, it needs to be able to accurately forecast demand for its services, in both oil and gas and across low-carbon technologies, such as offshore wind and carbon capture. Government support will be needed to maintain the UK’s involvement in the sector.”
According to the report, increased petroleum taxes on UK projects has impacted decommissioning progress as the cost of shutting down old installations cannot be treated as an allowable expense.
OEUK is in talks with the UK Treasury concerning the uncertainty the levy on North Sea investment has created concerning final production dates for various oil and gas fields, and also on funding of the decommissioning process.
11.21.2023
