Decommissioning Insight 2015
4. 2015 Decommissioning Survey Results The total forecast decommissioning expenditure on the UKCS between 2015 and 2024 is £16.9 billion 7 , compared to the ten-year forecast of £14.6 billion in the 2014 Decommissioning Insight 8 . This increase is primarily due to new projects entering the survey timeframe rather than increased cost estimates from existing projects. Although decommissioning is still in its infancy on the UKCS, it is a growing area of the business. Accounting for just over three per cent of total expenditure in 2014, this is expected to rise to around 12 per cent by 2018. 4.1 Annual Forecast Expenditure Data from previous Decommissioning Insight reports (2011 to 2015) have been used to compare annual forecast expenditure. As illustrated in Figure 2 overleaf, deferral of decommissioning activity has caused a fall in annual forecast expenditure from 2015 to 2017, compared to figures published last year. Expenditure has smoothed out and now peaks later. £1.1 billion is now forecast to be spent on decommissioning in 2015 rising to £1.9 billion in 2018. There is, however, a large increase in forecast expenditure post-2020 compared to last year’s report. This is due to the influx of new projects and has caused a peak in 2022 of £2.2 billion. Overall, the average yearly forecast expenditure is now around £1.7 billion, an increase on the £1.5 billion reported in 2014. This is due to new projects causing higher activity forecasts over the decade. It is important to note that the forecast expenditure is subject to change as the scope of decommissioning projects becomes more defined over time, particularly post-2020. Oil & Gas UK expects forecasts to smooth out as they are revisited in subsequent surveys (see section 3.2 for more details).
7 This does not include expenditure associated with decommissioning onshore terminals. 8 The 2015 survey covers the timeframe 2015 to 2024, whereas the 2014 survey covered the timeframe 2014 to 2023.
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