UK offshore decommissioning costs falling
Oil & Gas UK’s 2018 Decommissioning Insight Report predicts annual decommissioning expenditure in the UK offshore sector of around £1.5 billion ($1.91 billion) over the next decade, 20% less than the total forecast in 2017.
LONDON – Oil & Gas UK’s 2018 Decommissioning Insight Report predicts annual decommissioning expenditure in the UK offshore sector of around £1.5 billion ($1.91 billion) over the next decade, 20% less than the total forecast in 2017.
Other findings of the report include:
- 1,465 wells set to be decommissioned over the next 10 years, around one-fifth of the UK’s total well stock. For some individual projects, the average amount of days spent on well decommissioning has halved throughout the lifecycle of a project.
- More than 950,000 metric tons (1.05 MM tons) of topsides to be removed across the North Sea, of which just over 605,000 metric tons (666,898 tons) will be from UK fields.
- Forecast costs per tonne for the removal of topsides in the central and northern North Sea have fallen by 13%, while the cost of removal per tonne for a substructure in this area has fallen by just over 16%.
- The UK to be the largest market for decommissioning spending over the next decade, representing one-third of expenditure across the top 12 markets [Wood Mackenzie].
Joe Leask, the association’s decommissioning manager detailed the report’s conclusions at a conference in St Andrews, eastern Scotland.
“As the decommissioning sector matures,” he said, “we’re becoming more efficient and our growing expertise is enabling us to plan projects more cost-effectively. Our knowledge is continuously expanding and contributing to competitive decommissioning delivery.
“Data from projects to date reveals the scale of progress achieved in recent years. Forecast unit well decommissioning costs are reducing across all areas of theNorth Sea and have fallen by an average of 26%.
“The efficiency improvements we see in decommissioning reflect what is being achieved across the oil and gas lifecycle and attracting fresh investment in the basin, to extend the life of many assets and increase economic recovery.”