Decommissioning Insight 2016 - Oil & Gas UK

DECOMMISSIONING INSIGHT REPORT 2016

Figure 37: Total Forecast Decommissioning Expenditure on the UKCS by Work Breakdown Structure Category

3,000

Operator Project Management and Facility Running Costs Well P&A Removals and Other Associated Activity

Increased Uncertainty in Forecasts

2,500

2,000

1,500

1,000

500

Total Expenditure (£ Million - 2015 Money)

0

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Source: Oil & Gas UK

UKCS Expenditure 2016 to 2025

Owners’ costs

£3.4 billion £8.3 billion £3.4 billion £2.6 billion

Well P&A Removal

Other associated activity

In line with previous reports, well P&A remains the largest category of forecast expenditure, accounting for 47 per cent (£8.3 billion) of total forecast expenditure over the next ten years. Owners’ costs and expenditure associated with topsides, substructure and subsea infrastructure removal each account for 19 per cent of total forecast expenditure at £3.4 billion each. For subsea projects, well P&A accounts for 65 per cent of the total, compared with 8 per cent for owners’ costs (£4 billion total expenditure on subsea projects). Breaking this down further, of the £8.3 billion expenditure associated with well P&A, 57 per cent (£4.7 billion) is in the central North Sea, an increase from the £4 billion forecast in 2015 due to the additional subsea wells included that are more expensive to plug and abandon. Ninety-seven per cent (£3.3 billion) of the total owners’ costs are concentrated in the central and northern North Sea and west of Shetland. In these areas, platforms are typically manned resulting in much higher facility running costs. Projects are also larger and more complex, with, in turn, higher operator project management costs. The owners’ costs account for 31 per cent (£2.5 billion) of expenditure on platform removal projects in these areas compared to four per cent (£118 million) in the southern North Sea and Irish Sea.

54

Made with FlippingBook - Online catalogs