Decommissioning Insight 2016

In parallel, Oil & Gas UK is working on the MER UK Decommissioning Board with the OGA and the

Department for Business, Energy and Industrial Strategy (BEIS) to develop new fit-for-purpose technical,

commercial and operational solutions to lower the cost of decommissioning, while maintaining high safety and

environmental standards.

The industry fully respects its environmental obligations and is assisting BEIS as it prepares for the forthcoming

review of the OSPAR decision 98/3 by the OSPAR Offshore Industry Committee in 2018.

Broad comparisons of the 2016 survey with last year’s report suggest that the unit costs of decommissioning

are falling, particularly for well plugging and abandonment. This is partly due to a market-driven response to

the downturn as associated costs such as rig-rates have fallen, but it may also indicate that the industry’s own

efficiency improvements and the experiences gained from past decommissioning activity being applied to new

projects are beginning to have effect.

This is good news. It will only be through focused and effective collaboration between industry, government

and the regulators that the outcomes from decommissioning North Sea assets can be optimised in a mutually

beneficial manner.

Michael Tholen,

Upstream Policy Director, Oil & Gas UK

N.B. The collection and analysis of the data by Oil & Gas UK on behalf of the industry has the support of the

Norwegian Petroleum Directorate and Norsk Olje & Gass.