Oil firms to spend £16.6bn on decommissioning
Brae Bravo platform
About £16.6 billion will be spent removing oil and gas infrastructure from the North Sea over the next decade, creating thousands of jobs in the region.
Oil and Gas UK, the industry body, estimates that about half of the money will be used to decommission 1,800 wells.
The total bill for removing equipment from the basin is now estimated to be in the region of £46 billion, a 23% reduction compared with the £59.7 billion that was forecast in 2017.
The cut is partly because companies are becoming more efficient at doing the work needed and are getting better at collaborating on big projects.
Oil and Gas UK said that the coronavirus outbreak had caused decommissioning spending to slow to £1.07 billion for 2020, but the
An estimated 1.2 million tonnes of disused oil and gas installations ranging from massive rigs to the well heads that sit on the seabed in hundreds of metres of water, are to be brought to shore for reuse, recycling and disposal in the coming decade, says a new industry report.
Decommissioning Insight 2021, published by OGUK, which represents the offshore oil and gas industry, will set out plans for what is thought to be one of the largest marine removal programmes ever attempted.
Operators are aiming to set new standards in waste recovery. About 95% of the material from such installations is typically already recycled but the focus is now moving towards reuse – where component parts, or occasionally whole structures, are redeployed for new purposes with minimal modifications.
This avoids the energy and associated emissions needed for cutting up, smelting or crushing components, or making new ones.
Another key aim is to establish the UK as a centre of excellence for decommissioning – an industry that is set for global growth as oil and gas installations around the world reach the ends of their useful lives. British companies and workers who have built experience in the North Sea will be in high demand.
The industry has already shown its resilience – with work continuing safely all through the 2020/21 pandemic. While most other industries were in lockdown the oil and gas industry carried on, not only supplying the nation with energy but, over 2020 and 2021, decommissioning 234 wells, removing 21 platforms plus more than 50,000 tonnes of other underwater structures.
Examples include the Brae Bravo Platform, operated by the Abu Dhabi National Energy Company (Taqa): This 36,000-tonne platform, lying 170 miles northeast of Aberdeen, produced 500 million barrels of oil equivalent over its 33-year lifetime. The structure, weighing over 36,000 tonnes, was sent to Norway, where 95% of its material was destined for recycling or reuse.
Joe Leask, OGUK’s decommissioning manager, said: Decommissioning is more than a great challenge. It’s also a huge opportunity for UK companies to show their engineering skills, powers of innovation and ability to compete on a global scale.
“OGUK’s 2021 Decommissioning Insight report shows that over the last five years the UK decommissioning industry has improved its efficiency and cut its costs by an estimated 23%.
“So, we have done better but I think we can still do a lot more. If operators work together to create larger projects where we get economies of scale, then we can safely drive costs down even more.
“Decommissioning is also a key part of the UK’s transition to low-carbon energy and its aim of reaching net zero by 2050. This is partly because the installations being removed tend to be older and so generate more emissions relative to the oil and gas they produce.
“But it is also because of the growing opportunities for reuse, repurposing and recycling. Reuse is when infrastructure or equipment is taken away and used again elsewhere.
“This is already becoming common with forgings, pipeline valves, turbines and electrical kit. In the future some assets could be repurposed for new uses such as offshore wind and permanent storage of carbon dioxide by pumping it deep under the seabed.
“This is going to be an exciting 10 years – there’s a huge amount of work to be done and with £16.6 billion to be spent, there will be many opportunities for UK companies and workers.”