Supply Chain Bottlenecks Threaten North Sea Decommissioning

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Engineering firm Arup says supply chain bottlenecks, including a lack of skilled workers, will prove to be a key challenge for decommissioning of UK North Sea infrastructure.

Significant supply chain bottlenecks, including a lack of skilled workers, will prove to be a key challenge for the oil and gas industry as it aims to complete decommissioning work in the UK North Sea during the next couple of decades, according to a new report from engineering consultancy Arup.

Arup, which prepared the report for Decom North Sea and Scottish Enterprise, said that skilled workers who want to work in the oil and gas industry tend to favor roles in exploration and production, suggesting that the decom industry is not perceived as interesting or as financially rewarding as E&P.

Another issue identified by Arup is that vital knowledge about old infrastructure being removed is soon to be lost with the decommissioning industry's ageing workforce. Consequently, it is essential that these older workers pass on their knowledge about this infrastructure to the sector's younger workers.

Meanwhile, given that the decom industry is inherently different to that of E&P, procurement strategies need to become significantly distinct, and oil and gas companies need to explore new entrants to the industry who may have less history in the sector but who will bring innovation and new technology.

Clare Lavelle, Scottish Energy Consulting Lead for Arup, commented in a company statement:

"The decommissioning market will require upwards of GBP 30 billion [$48 billion] of expenditure before 2040 in the [United Kingdom Continental Shelf]. This offers a significant socio-economic opportunity in terms of job creation in the Scottish, UK and European supply chain, and a foundation from which North Sea based firms can export expertise to other parts of the world. To take full advantage of this opportunity, the industry must build on its existing capacity and capability to service the complex and demanding nature of decommissioning work in the North Sea."

Decom North Sea CEO Nigel Jenkins added:

"A principal role of Decom North Sea is to facilitate supply chain collaboration to reduce the cost of decommissioning. This report provides an invaluable insight into the potential resource constraints which will be a significant benefit to our members and stakeholders."


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