Economic Report 2016 - Oil & Gas UK

Figure 32: Decommissioning Expenditure

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2.5

Historic Decommissioning Spend

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Forecast Decommissioning Spend

2.0

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1.5

1.0

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(£ Billion - 2015 Money)

0.5

Annual Decommissioning Expenditure

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0. 0

2010

2011

2012

2013

2014

2015

2016

2017

6

Source: Oil & Gas UK

The recently published Decommissioning Strategy 27 developed by the OGA and industry, in conjunction with BEIS, seeks to transform this activity. The strategy is predominantly targeting a total decommissioning cost reduction of at least 35 per cent by focusing on three priority areas: • Cost certainty and reduction – driving targeted cost-efficiency programmes including innovative and regional approaches with extensive and effective knowledge sharing and best practice adoption. • Decommissioning delivery capability – developing an efficient and exportable low-cost and profitable decommissioning delivery capability supported by a competent and efficient supply chain, a selection of business execution models, all designed to appropriately allocate risks, align industry participants and drive down costs.

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Late-life asset management and decommissioning offers scope for the UK supply chain to diversify.

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• Decommissioning scope, guidance and stakeholder engagement – identifying and evaluating opportunities to further optimise and define parameters for decommissioning scope and improve industry engagement with the regulators. More information on decommissioning will be available in Oil & Gas UK’s forthcoming Decommissioning Insight , due to be launched at the annual Decommissioning Conference in November 2016.

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27 The Decommissioning Strategy is available to download at www.gov.uk/government/publications/decommissioning-strategy

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