Continuing need for joined-up thinking in the North Sea!

Posted by David Bamford



Our 23rd June 2017 Finding Petroleum Decommissioning Forum illustrated how the decommissioning industry in the UK North Sea is moving into a new gear - applying onshore decommissioning experience to offshore projects, improving the information flows, removing obstructions to business transactions (such as rules which put buyers and sellers in a different position for reclaiming tax).

Also decommissioning insurance is evolving, tax rebates are getting easier to transfer, and there are developments with 3D collaboration tools which enable different parties to work together, plan projects and spot potential problems before they happen. To read our Forum report which goes into all of this in detail, click here

So lots going on, companies beginning to see and accept Cessation of Production (CoP) as a reality.

However I continue to believe that the problem we now need to solve is that the total cost of North Sea Decommissioning may be up to £100bn and we UK taxpayers may be on the hook for half of this.

Being of the “lower for even longer” persuasion as far as oil and gas prices are concerned, I see two solutions:

Either: we accept that much CoP is upon us and find a way to cut the costs of Decommissioning.

And/or: we bring on stream a whole new generation of discoveries – whether new ones (shale oil, for example, wouldn't that be interesting!) or existing ‘marginal' discoveries – that mean much existing infrastructure gets a new lease of life, via subsea developments, minimum facilities unmanned platforms, tie-ins to existing lines etc.

And to state the obvious, we must find a way to ensure that ‘future useful' infrastructure is not scrapped because of some ‘local' CoP event……..

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