Decommissioning Insight 2016 - Oil & Gas UK

DECOMMISSIONING INSIGHT REPORT 2016

None of the UKCS projects included in the survey are reported as Class 1. These would have project definition levels of 50 to 100 per cent with many of the activities already in execution. Projects that were classified as Class 1 in the 2015 report have now been completed and no new projects have moved into this category. Only two projects were reported as Class 2, where project definition is between 30 and 70 per cent and is either at the contracting stage or being executed. Figure 33 shows the percentage of annual expenditure for projects on the UKCS split by AACE classification. Sixty-nine per cent of expenditure in 2016 comes from the large number of Class 4 or 5 projects, each contributing a small amount of expenditure, typically for operator project management or well P&A. Companies often start well P&A while they develop and define the scopes of the other decommissioning activities.

Figure 33: AACE Cost Class Breakdown

100%

90%

80%

70%

60%

Class 5 Class 4 Class 3 Class 2 Class 1

50%

40%

30%

20% Percentage of Annual Expenditure

10%

0%

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Source: Oil & Gas UK

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