Report Highlights Scale of North Sea Decommissioning

Published at 03:30PM - 13/10/14

Around £30 billion of investment is anticipated for the UKCS by 2040 for oil and gas project decommissioning, according to new figures analysed by Arup in a report commissioned by Scottish Enterprise and Decom North Sea.

To fully reap the rewards of the ‘significant’ opportunity, the report has laid out certain key areas which the UK oil and gas industry will need to take into consideration. These are primarily innovation, talent management and procurement and contracting strategies.

Decommissioning represents a significant supply-chain opportunity for Scottish oil and gas. A growing number of UK North Sea assets are approaching the conclusion of their working lives, and the supply chain needs to be prepared to meet these challenges.

The market for decommissioning will need over £30 billion of investment before 2040. This offers excellent opportunities for job creation in Scotland, the UK overall and Europe, as well as the opportunity to export decommissioning expertise across the globe. The report recommended that the industry would need to build on both its capability and capacity in the field — a particularly demanding and complex one — to fully leverage the potential benefits.

The report engaged with a number of big players currently operating in the UKCS decommissioning market and reviewed investment lead times and commitment, capacity availability, synergies and pressures from linked industries and existing expertise. Areas of the supply chain where resource constraints were expected to be felt included skilled operational and engineering resources, harbours and ports for recycling, removal vessels and abandonment resources.

Also flagged up was the requirement to move procurement approaches away from just providers with proven and long-term industry experience and to encourage new supply-chain entrants who could bring fresh and innovative working methods, lower costs and an invigorated and more competitive boost to the supply chain.

Last updated on 09:56AM - 14/10/14