New report highlights fresh challenges for U.K.’s decommissioning sector

The latest data from this year’s OEUK Decommissioning Report being published later this month show a challenging picture of spiraling costs, political uncertainty and competition for the specialist equipment needed to dismantle oil and gas platforms and seal abandoned wells.

Offshore Energies UK (OEUK) is inviting journalists to an embargoed briefing to share the findings and analysis of this report

The industry is facing unprecedented uncertainty over volumes of homegrown energy production. The situation is being exacerbated by unpredictable volatility of commodity prices and continuing concern about the U.K.’s increasing reliance on imported energy.

These uncertainties have significant knock-on consequences and could lead to a dramatic hike in forecasted decommissioning costs over the next decade. This could mean that removing platforms and plugging and abandoning oil and gas wells will soon account for a third of all spending in some parts of the domestic offshore oil and gas production industry. 

The report also shows the industry is under pressure to ramp up decommissioning delivery by a third to meet targets.

Around 200,000 direct and indirect jobs stem from the U.K. offshore oil and gas industry. The drive to net zero must carry with it the producers and their workforce, the report says.

Ricky Thomson decommissioning manager at OEUK said “Although significant challenges lie ahead for the decommissioning industry they can be overcome. Operators must continue to sanction projects and businesses in the supply chain must remain resilient and competitive.”

The report’s findings will be shared by OEUK at an embargoed briefing on the 2024 Decommissioning Report on Monday, November 18, via Microsoft Teams.    

At the briefing, the OEUK team will discuss: 

• The multi-billion-pound value of the U.K. decommissioning industry
• Policy and fiscal changes needed to ensure prevent dangerous delays in decommissioning
• Plus: Planned publication of the world’s first wind turbine decommissioning guidelines as these renewable energy generators also begin to reach the end of their natural life

The full report will be published at the OEUK Offshore Decommissioning conference in St Andrews, Scotland the following day, November 19. The event is the largest U.K. gathering of oil and gas decommissioning specialists, with an expected audience of more than 500 delegates. It is sponsored by Repsol Resources U.K. Limited with supporting sponsorship from Claxton Engineering Services and TAQA.

Jorge Barron, Chief Operating Officer, Repsol UK said: “Repsol U.K. is proud to be principal sponsor at this key event as our industry manages continued oil and gas production required for energy security while delivering on decommissioning liabilities. We are committed to responsible stewardship of a mature North Sea operating portfolio with a steadfast focus on safety, sustainability and efficiency.”