Decommissioning Insight 2019

DECOMMISSIONING INSIGHT 2019

1 Foreword W elcome to the 2019 Decommissioning Insight . Now in its tenth year of publication, it has tracked the emergence of a new phase in the life of the North Sea and reflects the accelerating pace of change across the sector. Ten years ago, only a handful of fields had been decommissioned. Since then we have seen an increasing flow of decommissioning projects in the North Sea, offering operators and supply chain alike the opportunity to develop fresh capabilities at a rapid pace. As the report shows, decommissioning has come-of-age and now is increasingly seen as a normal part of doing business, sitting alongside exploration, new field development and infield investment, presenting its own challenges, whilst creating its own opportunities. Decommissioning expenditure in the UK is currently running at £1.5 billion per annum and to-date, we have decommissioned around 9 per cent of the platforms that have been installed in the UKCS. Yet the total opportunity is much greater; whilst £15.2 billion will be spent on decommissioning assets on the UK continental Shelf over the next decade, the emerging global market is worth a massive $85 billion (£67 billion), over four times larger. The skills this industry has acquired to meet the decommissioning challenge at home positions it well to tackle the emerging global market opportunities. Performance standards in the UK are leading the way, and OGUK’s recently updated Decommissioning Work Breakdown Structure (WBS) guidelines set a global performance framework that many other countries are following. The Decommissioning Insight was first launched a decade ago to improve general knowledge of this activity and to enhance the overall market knowledge; that still remains its purpose today. Ensuring industry’s intellectual capital in decommissioning is shared is key to maintaining the competitiveness of the sector and helping us to become as efficient as possible. We have established a reputation for decommissioning professionally, systematically and to the highest environmental and safety standards, a reputation we must maintain at all costs. Year on year, the industry is delivering a steady improvement in cost performance as demonstrated in June when the OGA published its latest Decommissioning Cost Estimation report. This showed a 17 percent reduction in the overall cost of decommissioning over the last two years, persuasive evidence of the close collaboration between industry and government to deliver the overall 35 percent cost reduction target. These significant cost reductions are a result of operators working closely with their supply chain, openly and constructively challenging each step in the process and learning from the best and sharing with others. The OGA has also assisted by sharing performance benchmarks to help set new norms and it is industry’s intention to continue to build on this approach in years to come.

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