Activity Survey 2014

ACTIVITY SURVEY 2014

9. Decommissioning Decommissioning is now becoming a significant part of UKCS expenditure, accounting for 3.5 per cent (£0.9 billion) of the total spend in 2013. Decommissioning expenditure is expected to average £1.3 billion per year over the remainder of the decade, peaking at £1.7 billion in 2016.

Figure 27: Forecast for Decommissioning Expenditure

1.8

Total Decommissioning >P50

1.6

2012 Forecast

1.4

1.2

1.0

0.8

0.6

0.4

Decommissioning Spend (£ Billion)

0.2

0.0

2013

2014

2015

2016

2017

2018

Source: Oil & Gas UK

When looking out to 2040, it is anticipated that decommissioning expenditure will total about £40.6 billion, of which £37 billion will be to decommission existing installations and those that have already been approved and a further £3.6 billion to decommission new fields yet to be installed. Overall predicted decommissioning costs to 2040 have remained fairly static compared with last year’s survey, suggesting that decommissioning has been postponed on a number of facilities. The reassurances provided by the Decommissioning Relief Deeds (DRDs), contracts between government and industry guaranteeing tax relief on decommissioning costs, are likely to be a contributory factor.

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