UK Expected to Spend $19.5B on Decom in Next Decade
The UK is expected to spend $19.5 billion (GBP 15.3 billion) on decommissioning over the next decade, according to a new report from industry body Oil & Gas UK.
Well plugging and abandonment makes up 49 percent of the forecast expenditure, Oil & Gas UK’s 2018 Decommissioning Insight Report revealed. Topsides and substructure removals combined account for just over 13 percent of the expenditure and subsea infrastructure removal accounts for 11 percent of the expenditure, the report highlighted.
The spend over the next decade is almost 20 percent lower than forecasts made last year would have suggested, according to the report.
“As the decommissioning sector matures, we’re becoming more efficient and our growing expertise is enabling us to plan projects more cost-effectively,” Joe Leask, decommissioning manager at Oil & Gas UK, and author of the report, said in an organization statement.
“Our knowledge is continuously expanding and contributing to competitive decommissioning delivery. Data from projects to date reveals the scale of progress achieved in recent years. Forecast unit well decommissioning costs are reducing across all areas of the North Sea and have fallen by an average of 26 percent,” he added.
“The sector’s cost leadership demonstrates we have the capacity and capability to deliver the 35 percent cost reduction target set by the Oil and Gas Authority. Meeting and then beating this target will be key to unlocking the global market, allowing the UK to reinforce its position as world-leading,” Leask continued.
Back in October, Oil & Gas UK unveiled a new decommissioning team which it said will focus on “providing insight into the shifting decommissioning landscape”.
The new team comprised decommissioning consultant Richard Heard, decommissioning business adviser Sam George and decommissioning manager Joe Leask.
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