Decommissioning Insight 2015

DECOMMISSIONING INSIGHT 2015

7.1.2 The Southern North Sea and Irish Sea Between 2015 and 2024, 274 wells are forecast to be plugged and abandoned in these regions. This is a decrease of 143 wells on the 2014 report, as seven projects are deferred and therefore move partially or completely outside of the survey timeframe while operators work to maximise economic recovery and extend field life or postpone decommissioning expenditure to improve current cash flow. The associated expenditure for well P&A in these regions has therefore also fallen by £200 million to £1.5 billion. The decline in the forecast is relatively small compared with the anticipated fall in activity as the average costs for well P&A in these regions have been revised up, as seen in Figure 10 opposite. Figure 9 shows that the majority of activity in the SNS and Irish Sea is concentrated in the first half of the survey timeframe, where there has been a slight increase in well P&A activity. This reflects how some operators are consolidating well P&A activity for their projects into fewer years than previously forecast. By contrast, the forecast towards the end of the timeframe has reduced as projects are deferred, highlighting the level of uncertainty in forecasts towards the end of the decade. Oil & Gas UK expects that activity will smooth out more evenly across the ten-year timeframe as forecasts are revisited. As in the CNS and NNS/WofS regions, the years with higher subsea well P&A activity tend to have relatively higher expenditure forecasts as these wells are more expensive to plug and abandon.

Figure 9: Number of Wells Forecast to be Plugged and Abandoned by Type and Total Annual Expenditure in the Southern North Sea and Irish Sea

80

300

Increased Uncertainty in Forecasts

70

250

60

200

50

40

150

30

Number of Wells

100

20

50

10

Forecast Expenditure (£ Million - 2015 Money)

0

0

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Platform Subsea Development

Subsea E&A

Total Well P&A Expenditure

Source: Oil & Gas UK

Number of Wells 2015 to 2024

Total Expenditure 2015 to 2024

Proportion of PlatformWells

274

£1.5 billion

73%

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