Scottish Government Launches New Decommissioning Fund

Scottish Government Launches New Decommissioning Fund
A new $6.2 million (GBP 5 million) fund has been set up by the Scottish Government to support Scottish companies looking to take advantage of decommissioning sector opportunities.

A new $6.2 million (GBP 5 million) fund has been set up by the Scottish Government to support Scottish companies looking to take advantage of decommissioning sector opportunities.

The Decommissioning Challenge Fund (DCF) will support infrastructure upgrades and innovation in salvage and transport methods at Scotland’s ports and harbours. It will also encourage engineering scoping work at key sites to build business cases that will attract further private investment.

The news follows Shell’s announcement Wednesday that it has begun an extended 60-day public consultation on recommendations to decommission the Brent oil and gas field in the North Sea.

First Minister Nicola Sturgeon launched the Fund Wednesday at Sparrows, an Aberdeen based supply chain company with expertise in decommissioning. The First Minister also visited exploration technology specialists Zilift Ltd.

Alongside the Decommissioning Action Plan, launched by Scottish Enterprise and Highlands and Islands Enterprise last year, the Fund intends to help Scotland's oil and gas sector make the most of decommissioning opportunities at home and abroad. 

“With up to 20 billion barrels of oil and gas remaining, the Scottish Government’s top priority remains working with industry and stakeholders to maximize economic recovery from the North Sea,” Sturgeon said.

“The new GBP 5 million fund also recognizes that decommissioning is an emerging, but growing, activity in the North Sea, with GBP 17.6 billion [$22 billion] expected to be spent in the North Sea over the next decade,” she added.

Sturgeon also said that Shell’s news to apply to begin decommissioning its Brent oil field underlines the importance of planning for decommissioning.

“The Fund builds on our Program for Government commitment to identify investment opportunities, with a view to improving capacity at Scottish ports, increasing the economic return to Scotland from a variety of removal, disposal and dismantling activities,” Sturgeon commented.

“Scottish-based firms are already seizing opportunities, securing the lion’s share of value from a range of decommissioning activities, including project management of decommissioning programs and high value well plugging and abandonment activity,” she added.

Offshore industry body Oil & Gas UK described the new fund as encouraging.

“The First Minister’s announcement today of a new GBP 5 million fund to support Scottish companies looking to take advantage of decommissioning sector opportunities is encouraging news for the many supply chain companies still struggling in the downturn,” an Oil & Gas UK spokesperson told Rigzone.

“Oil & Gas UK looks forwards to engaging with the Scottish Government on how this fund will work once it becomes available in March,” the spokesperson added.

The industry body said that it was important that the industry’s focus remains on maximizing economic recovery of the UK’s oil and gas while recognizing and managing the fact that decommissioning is part of the natural evolution of the UK continental shelf.


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A graduate in journalism from Cardiff University, Andreas has eight years of experience as a business journalist. Email Andreas at andreas.exarheas@rigzone.com

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