Oil & Gas UK Activity Survey 2016

ACTIVITY SURVEY 2016

Figure 44: Cumulative Number of Fields Ceasing Production by Region

60

SNS, Irish Sea

50

CNS

NNS

40

30

20

10

Cumulative Number of Fields Ceasing Production

0

2015

2016

2017

2018

2019

2020

Source: Oil & Gas UK

Decommissioning Expenditure In 2015, decommissioning spend on the UKCS was £1.05 billion. This is significantly lower than the £1.5 billion forecast in the Activity Survey 2015 , partly because decommissioning activity on some fields was deferred, but mainly because a number of projects significantly reduced levels of decommissioning expenditure and very few of the fields that ceased production during 2015 incurred material decommissioning costs within the year. As these fields move from the cessation of production stage to the decommissioning stage, we expect expenditure to rise to over £2 billion by 2017. The outlook towards the end of the decade will be determined by the industry’s ability to manage its assets in a way that enables it to remain cash-flow generative even if low prices persist.

Figure 45: Annual Decommissioning Spend

2.5

Historic Decommissioning Spend

Forecast Decommissioning Spend

2.0

1.5

1.0

(£ Billion - 2015 Money)

0.5

Annual Decommissioning Expenditure

0.0

2010

2011

2012

2013

2014

2015

2016

2017

Source: Oil & Gas UK

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