Oil & Gas UK Releases Decommissioning Market Insights

Oil & Gas UK  published a suite of documents which highlight the need for the industry to prepare for forthcoming decommissioning projects and increase the efficiency of related processes.

The publications feature information gathered on the scale of decommissioning activity to come on the UK Continental Shelf (UKCS), experiences of and lessons from pipeline decommissioning across the North Sea and guidance on producing robust and consistent estimates of the cost of decommissioning. The documents will be launched at the annual Offshore Decommissioning Conference in St Andrews, which this year is sponsored by Ernst & Young LLP.

Oil & Gas UK’s annual Decommissioning Insight is the leading forecast for decommissioning activity on the UKCS. Drawing on the plans of 27 operators in Oil & Gas UK’s membership, the 2013 survey indicates that a total of £10.4 billion is to be spent on the decommissioning of assets in the UKCS between 2013 and 2022 and that spending on decommissioning all assets will be in excess of £31.5bn.

Operations Director, Oonagh Werngren, said: “The Oil & Gas UK Decommissioning Insight represents the latest view of decommissioning plans for the UKCS. It highlights the growth of the industry in coming years and offers the opportunity for both operators and contractors to collaborate to maximise efficiency and reduce cost.”

The second publication, Oil & Gas UK Guidelines on Decommissioning Cost Estimation 2013, provides a methodology for breaking the process of decommissioning into separate phases (known as a comprehensive decommissioning work breakdown structure) to enable the development of robust and consistent decommissioning cost estimates that can be meaningfully compared across the industry. The publication, which is an update on a previous document published in 2011, now includes guidance on well plugging and abandonment.

Ms Werngren said: “As the decommissioning sector matures, it is important that the industry has an accurate and consistent basis on which to estimate costs. Oil & Gas UK’s new Decommissioning Cost Estimation Guidelines build on the industry’s latest experience in the practice and will be used extensively to plan future projects”.

To complement ‘The Decommissioning of Steel Piled Jackets in the North Sea Region’ report published last year, Oil & Gas UK now launches ‘Decommissioning of Pipelines in the North Sea Region’.

Oil & Gas UK’s Environmental Issues Director, Mick Borwell said: “The report provides a picture of the scale of pipeline infrastructure, an overview of pipeline decommissioning to date and highlights the technical capabilities and limitations that currently impact decommissioning options. This gives an insight into the potential opportunities for technology development.”

The annual conference attracts over 300 delegates and will focus on opportunities for collaboration.

Mick Borwell, who is co-chairman of the Offshore Decommissioning Conference, concluded: “Delegates will hear from an expert line-up of speakers who will focus on the state of the decommissioning market in the UK. With experience from across the North Sea they will speak on a wide range of subjects from late life operations and planning to platform well plugging and abandonment. The documents launched at the conference will be of use to delegates and to the wider community of operators and contractors involved in the decommissioning process”.

Press Release, October 3, 2013