Decommissioning Insight 2017

DECOMMISSIONING INSIGHT 2 017

Decommissioning Infograp – Facts and Figures, November 201

3. The North Sea Decommissioning Market

£1.7 – £2 billion on the UK Continental Shelf per year £400 – £800 million on the Norwegian Continental Shelf per year £650 – £800 million Forecast decommissioning expenditure over the next five years:

In Summary W ith significant remaining resource yet to recover, the focus of the offshore oil and gas industry and its regulators across the North Sea (the UK, Norwegian, Danish and Dutch Continental Shelves) is to maximise economic recovery. In parallel with this, and a necessary part of the petroleum economics life cycle, is decommissioning of an oil and gas field. Decommissioning is a growing market as an increasing number of fields naturally reach the end of their productive lives. The timing around cessation of production (CoP) and subsequent decommissioning is notoriously challenging to plan for as it is affected by variables such as oil price, asset integrity, production efficiency, field interdependencies and brownfield investment potential. The recent fall in oil price, by and large, has not accelerated decommissioning, with only a small number of isolated examples where this has happened. Instead, the focus across the North Sea is to maintain or extend field life by reducing costs and increasing operating efficiencies. The majority of decommissioning activity taking place now has long been in companies’ plans. The UK Continental Shelf (UKCS) currently has the largest decommissioning market in the North Sea, at around £1.2 billion in 2016 and is expected to grow to £1.8 billion in 2017. This is equal to around 11 per cent of total UKCS expenditure, and could increase further to around 17 per cent by 2025 as more fields enter their decommissioning phase and spend in other areas reduces. The UK supply chain is therefore in a good position to develop the requisite skillset and experience to form an international centre of excellence in decommissioning, with the opportunity to export its expertise. Companies must, however, develop the capability and capacity to compete in a global marketplace on quality, efficiency and cost, while maintaining focus on high environmental and safety standards. £1.7 – £2 billion on the UK Continental Shelf per year £400 – £800 million on the Norwegian Continental Shelf per year £650 – £800 million Forecast decommissioning expenditure over the next five years:

total on the Dutch Continental Shelf

Decommissioning Infographics – Facts and Figures, November 2017

Decommissioning activity is forecast on 349 fields across the UK, Norwegian, Danish and Dutch Continental Shelves to 2025

Supply chain companies must be able to compete in a global marketplace for decommissioning contracts on quality, efficiency and cost

Almos

2,5

wells

are forecas plugged and a across the Nor to 2025, with two-thirds i

Operators forecast that total decommissioning spend in the UK Continental Shelf will be £17 billion between 2017 and 2025

The Oil an Authority is ta 35

total on the Dutch Continental Shelf

10

Made with FlippingBook - Online Brochure Maker