Decommissioning Insight 2017

2. Key Findings Decommissioning Across the North Sea

2

• Decommissioning is a growing market across the North Sea. Activity on the UK Continental Shelf (UKCS) is expected to be significantly higher than on the Norwegian, Danish and Dutch Continental Shelves to 2025. This reflects the scale of total infrastructure and the relative maturity of the different regions of the North Sea, with more fields reaching the end of their productive lives in the UK.

• From 2017 to 2025, decommissioning is forecast to take place on 349 fields across the four regions of the North Sea:

• Six fields on the Danish Continental Shelf • 23 fields on the Norwegian Continental Shelf • 106 fields on the Dutch Continental Shelf • 214 fields on the UKCS

• Across the four regions:

• Over 200 platforms are forecast for complete or partial removal • Close to 2,500 wells are expected to be plugged and abandoned • Nearly 7,800 kilometres of pipeline are forecast to be decommissioned

UK Continental Shelf in Focus

• Decommissioning, as a proportion of total UKCS expenditure, has increased from 2 per cent in 2010 to 7 per cent (£1.2 billion) in 2016. Operators forecast this figure will rise to 11 per cent (£1.8 billion) this year.

• From 2017 to 2025, £17 billion is forecast to be spent on decommissioning on the UKCS.

• The annual expenditure profile is forecast to remain consistent over the near term at £1.7-£2 billion per year.

• Forty-six per cent (£7.9 billion) of the total UK decommissioning spend from 2017 to 2025 will be concentrated in the central North Sea.

• The largest category of expenditure is well plugging and abandonment (P&A) at 49 per cent (£8.3 billion).

• The UK offshore oil and gas industry is committed to ensuring that decommissioning is carried out as cost-effectively as possible, while maintaining high safety and environmental standards.

• The average forecast cost for well P&A has fallen by 5 per cent in the central and northern North Sea and west of Shetland, and by 4 per cent in the southern North Sea and Irish Sea. These figures are expected to fall further as lessons learnt from industry experience are shared sector-wide to further improve efficiency.

7