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North Sea decom scale highlighted

Written by  OE Staff Wednesday, 29 November 2017 00:15

Nearly 350 fields are expected to be decommissioned between now and 2025 across the UK, Norwegian, Danish and Dutch sectors of the North Sea, with the majority of them in the UK, a report released today predicts. 

The figures were revealed in Oil & Gas UK's annual Decommissioning Insight Report, which was presented at the annual Offshore Decommissioning Conference in St Andrews. 

The event also heard that a 35% reduction in the £60 billion UK Continental Shelf (UKCS) decommissioning bill - a cost reduction target set by the Oil and Gas Authority (OGA) is feasible. The event was told about how operators were containing and reducing plugging and abandonment costs and some had achieved 70% cost reduction in post cessation of production (COP) running costs by by starting abandonment work before COP, cutting costs (on a typical large northern North Sea facility) from £150-200 million a year to less than £50 million, OGA infrastructure decommissioning manager Ian Fozdar said.

Read more news from the Offshore Decommissioning Conference here

The Insight Report, which now also includes the Norwegian North Sea, as well as the Danish, Dutch and UK shelves, is based on a survey of operators. 

It predicts that from 2017-2025, decommissioning is forecast to take place on 349 fields across the four regions of the North Sea, six on the Danish Continental Shelf, 23 offshore Norway, 106 fields on the Dutch Continental Shelf, and, with the largest number of fields ceasing production, 214 on the UKCS. 

In total, more than 200 platforms are forecast for complete or partial removal in the period, nearly 2500 wells are expected to be plugged and abandoned, and nearly 7800km of pipeline are forecast to be decommissioned. 

Spending on decommissioning on the UKCS has increasde from 2% of total spending, to 7% in 2016, at £1.2 billion. Operators forecast this figure will rise to 11% (£1.8 billion) this year.

Meanwhile, from 2017-2025, £17 billion is forecast to be spent on decommissioning on the UKCS, with about £1.7- £2 billion per year in the near term, compared with £400-800 million on the Norwegian Continental Shelf and a forecast of £650-800 million on the Dutch Continental Shelf.

Some 46% - £7.9 billion - of the total UKCS decommissioning spend from 2017-2025 is expected to be concentrated in the central North Sea. The largest category of expenditure on the UKCS between 2017-2025 is well plugging and abandonment at 49% - £8.3 billion.

Oil & Gas UK’s upstream policy director, Mike Tholen, said: “The sector is successfully controlling the cost of well plugging and abandonment. The Insight reveals that the average forecast cost for well P&A has fallen by 5% in the central and northern North Sea and west of Shetland, and by 4% in the southern North Sea and Irish Sea with further cost reductions predicted as the sector ensures decommissioning is carried out as cost- effectively as possible, while maintaining high safety and environmental standards.”

Read about last year's Decommissioning Insight here.

A report on decommissioning steel piled jackets, outlining lessons learnt since 2012, were also presented, based on Oil & Gas UK’s Steel Piled Jacket in the North Sea Region report, which was also published todya. 

The report captures the experience gained from 63 projects that have decommissioned to date and suggests that the weight of piles and grout should be included when considering steel jackets for derogations from the OPSAR removal requirements. This would increase the number of jackets which could apply for a derogation from 31 to 50 (they have to have been installed after 1999 and weigh more than 10,000-tonne.

Tholen added: “These reports demonstrate the UK’s growing expertise in decommissioning and these capabilities have been developing alongside the industry’s focus on more productive activities in oil and gas production. They highlight that there is a very real opportunity for the UK’s decommissioning sector to develop competitive capabilities and become a champion of decommissioning excellence in the global arena."

Image: Repsol's Buchan Alpha floating facility, now being decommissioned by Veolia/Peterson, in Lerwick, Shetland.

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