Average costs for UK North Sea decommissioning expenditure are growing by 14% a year, with the final cost of decommissioning now expected to be in excess of US$125 billion (£100 billion), according to a report by CRF Consultants.
With much of the burdon of decommissioning costs set to fall on UK tax payers - up to 75%, through tax reliefs, according to the GMB - the report, commissioned by the GMB union, says urgent focus should be placed in three key areas – life of field extension, decommissioning execution and job retention, so that the UK benefits from this spending.
The GMB has set decommissioning in its sights as it sees this activity as potentially being a source of work for Scotland. It has called for the UK and Scottish governments to bring forward an "urgent investment program" to get Scottish ports and fabrication yards "decommissioning ready," so it could compete for a market share of an industry UK tax payers would ultimately at least part fund.
Work in this area has already been going overseas. The removal contract for CNR International's Murchison platform went to Dutch contractor Heerema Marine Contractors and the modules removed from the facility were taken to a Norwegian yard.
The GMB has also been wading in on the debate over whether parts of offshore facilities can be left in place, or not. There are growing voices within the industry calling for companies to be allowed to leave more structures in place than current regulations require.
Gary Smith, Acting Secretary GMB Scotland, said last week: “GMB Scotland is concerned that the industry is calling for opt outs and that this will be seen as decommissioning on the cheap with the Scottish North Sea being left with a toxic legacy."
GMB says the Scottish Government should insist that decommissioning follow the agreed Ospar rules and that widespread derogations - when facilities can be left in place - could be bad for the environment and jobs. However, industry is pointing to evidence which shows offshore structures have created marine habitats and removing them all would be bad for the environment.
The GMB says Scotland has assets like the Port of Dundee and BiFab in Fife that are primed to compete for a share of the "highly lucrative" domestic and international decommissioning market, but that this would be made easier if they are given state support to get "decom ready" quicker.
GMB published its research ahead of today's Autumn statement and Scottish Draft Budget, during which spending plans by both the UK Government and Scottish Parliament will be set out.
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