Alistair Birnie, chief executive of Subs
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The largest and longest-running North Sea event dedicated to offshore and subsea decommissioning contractors, the North Sea Decommissioning Conference closed in Aberdeen on Thursday. The two day event, which was held at the Ardoe House Hotel, brought together decommissioning leaders from around the world.
Speaking at the sixth annual decommissioning event, Alistair Birnie, chief executive of Subsea UK said, "In these unsettling times, few things are certain and none more so than decommissioning.
"The UK decommissioning market is difficult to consistently predict and does not align itself to a strong business case. The supply chain needs therefore to look at decommissioning as a global opportunity.
"The uncertainty around timing and volume of work, combined with varying experiences, is inhibiting contractors from participating in this market. This perceived high risk may lead to a lack of investment in capability or capacity. So those with a flexible, mobile offering will be able to secure investment and win work.
"The subsea industry is well-positioned to work in this way as it already looks at demand and capacity from a global perspective. Subsea has converged on a multi-role capability across the contracting community using integrated subsea operations models where contractors can undertake an immense range of work, very quickly, with the minimum number of vessels, and with flexible tooling to achieve these goals. The Gulf of Mexico experience has been very attractive for some suppliers. The hurricane damage resulted in a steady high level of business from which techniques and capabilities have been built that can now be used to take on workscopes in other parts of the world.
"Considering the overall scope including topsides, subsea, pipelines and subsea well decommissioning, Subsea UK estimates that around 30% of the decommissioning market by revenue will be subsea contractor focused. This means that the subsea industry will play a very significant role and be able to capitalize on the opportunities.
"With market size estimates ranging from £15 billion to around £23 billion, we need to get much closer to the real costs, and subsea can play a big role in getting unnecessary and inefficient costs stripped out, if the planning process allows us to participate in the bigger picture discussion.
"We need to drive common practices, common tooling and common skills -- and we need to do this now, or we will lose the opportunities. This implies joined up thinking across the board, something which has been lacking to date.
"Looking specifically at subsea infrastructure there is a growing dilemma and it is about timing. The industry is aiming to arrest the decline in production on the one hand but looking at decommissioning on the other.
"The problem lies in the fact that the necessary infrastructure required for future subsea production may be scrapped if we plan for a scenario that sees production declining more rapidly. This means we lose a massive opportunity in future subsea production if we do not think this through carefully. There has been no audible discussion or debate on how a better future can be secured by ring-fencing vital infrastructure, and we need action now to secure a structured plan that will protect our longer term interests."