Decommissioning Insight 2016 - Oil & Gas UK

Owners’ costs are expenses incurred to operate the decommissioning programme post-CoP through to completion. These costs include management of the facility in both the pre-NUI and NUI stages. This covers expenditure associated with logistics, the decommissioning team itself, deck crew, power generation, platform services, integrity management (inspection and maintenance) and specialist services. As shown in Figure 37 overleaf, owners’ costs are forecast to remain relatively stable across the timeframe, with an average annual expenditure of £340 million per year. Expenditure is forecast to increase towards the end of the survey timeframe as activity increases, peaking at £450 million in 2025. However, owners’ costs over the next decade are £300 million less than those outlined in the 2015 report, despite the increase in the level of activity and overall expenditure in this year’s survey. This reflects efficiency improvements seen across the industry being projected onto future estimates of facility running costs for decommissioning projects. Well P&A costs, meanwhile, include rig upgrades, studies to support wells programmes, project management, operations support, and specialist services such as wireline or conductor recovery. This expenditure is forecast to peak in 2024 at almost £1.2 billion, with an average annual spend of just over £820 million over the next ten years. This compares with an average annual expenditure of £770 million in the 2015 report and £640 million in the 2014 report.

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Removal and other associated activity include expenditure on:

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• ‘Making safe’ • Topsides preparation • Removal of topsides, substructures and subsea infrastructure • Pipeline decommissioning • Transportation and onshore-load in • Disposal • Recycling • Site remediation and monitoring

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Expenditure from 2016 to 2025 associated with removal activities is forecast to be lower in the near term, rising year-on-year from just under £300 million in 2016 to a peak of just over £900 million in 2024. Expenditure over the decade has increased by £500 million compared to the 2015 report.

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