Picking up pace: delivering the sustainable decommissioning era

With high costs, conventional contracting, environmental considerations and slow adoption of innovation the decommissioning and removal of offshore assets is a challenge to be reckoned with – as economically and as sustainably as possible.

This week the UK Oil & Gas Authority publishes its 2021 UKCS Decommissioning Cost Estimate Report, detailing the progress made against the industry’s target to radically reduce the cost of decommissioning in the UK North Sea by 35% by the end of 2022.

The consensus? “Not fast enough.”

From a baseline estimate set in 2017, solid progress has been delivered, with 23% of estimated costs reduced by operators and the supply chain to date. But after an accelerated start, with 10% slashed in 2018 alone, last year’s 2% achievement signals a plateau, and a need to do different if the OGA’s ambitious though critical target is to be achieved.

So, what comes next?

The UKCS can be the global centre of decommissioning excellence – the time to make that a priority is now.

We know from experience that daring to do different, working together in new ways, and engaging early unlocks significantly more opportunities for innovation and efficiency through late-life production, decommissioning and asset repurposing.

Designing the solutions that will deliver value means taking an equitable approach to risk and reward; not only to incentivise the supply chain, but to sustain and strengthen it.

When we do it right, we can maximise output, reduce operating and abandonment costs, while evaluating every opportunity to re-use or re-purpose to accelerate the industry’s journey to net-zero.

Ultimately, the industry understands its role – maintain energy security and deliver a just transition to a low-carbon energy future. A thriving decommissioning industry can bring that full circle, ensuring sustainability is the golden thread running through every assets’ lifecycle, from concept to removal.

The Oil and Gas Authority’s (OGA) 2021 Decommissioning Cost Estimate report reveals a further reduction of £2bn since 2020 and a cumulative fall of over £13bn from the baseline £59.7bn to £46bn, marking steady progress towards the £39bn by end-2022 target. The full report can be accessed here.