It is estimated that £17 billion will be spent on decommissioning in the UK Continental Shelf between now and 2025, with a total of 214 fields being decommissioned.
The findings, unveiled in a new report by Oil & Gas UK, show that the UKCS is the largest market for decommissioning in the North Sea, ahead of the Danish, Norwegian and Dutch shelves combined.
The 2017 Decommissioning Insight report reveals that decommissioning, as a proportion of total UKCS expenditure, increased from two per cent in 2010 to seven per cent in 2016, when the market was worth £1.2bn.
Operators forecast this figure will rise to 11 per cent (£1.8bn) this year. It is forecast that annual expenditure on the UKCS will consistently remain at £1.7bn to £2bn.
Forty-six per cent – £7.9 billion – of the total UKCS decommissioning spend from 2017 to 2025 will be concentrated in the central North Sea, the report says.
Oil & Gas UK’s upstream policy director, Mike Tholen, said: “With industry driving efficiency improvements which have led to a 16 per cent increase in UKCS production following a decade of decline, the sector is successfully controlling the cost of well plugging and abandonment.
The largest category of expenditure on the UKCS between 2017 and 2025 is well plugging and abandonment, which at £8.3 billion, is almost half the total.
“The Insight reveals that the average forecast cost for well P&A has fallen by five per cent in the central and northern North Sea and west of Shetland, and by four per cent in the southern North Sea and Irish Sea with further cost reductions predicted as the sector ensures decommissioning is carried out as cost- effectively as possible, while maintaining high safety and environmental standards.”
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