The UK Oil and Gas Authority (OGA) released the ‘UKCS Decommissiioning – 2018 Cost Estimate Report’, in which it says that the estimated cost of decommissioning oil and gas infrastructure on the UK Continental Shelf (UKCS) has reduced from last year’s baseline.
As UK’s industry and government try to reduce decommissioning costs by at least 35%, the report indicates that the industry has made progress towards safely decommissioning all current and currently planned future offshore oil and gas infrastructure for less than £39 billion, and contains benchmarking of operators’ performance in cost reduction.
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The assessment also tracks progress since the OGA estimated that UKCS decommissioning costs from 2017 onwards would be £59.7bn, and identifies a number of improvements.
In addition it shows that, in real terms, despite including more assets and infrastructure than the previous year, estimated costs from 2018 onwards are lower, at £58bn in 2017 prices. Comparing this to last year, estimated costs from 2017 onwards have reduced by 7% to £55.7bn.
A key fact to achieving this reduction was the fact that companies are gaining practical experience in what is still a relatively immature activity.
Director of Operations Gunther Newcombe at the OGA stated:
Companies executing decommissioning programmes have made significant efficiencies in well plug and abandonment costs. In the Northern North Sea, platform running costs have substantially reduced through better optimisation of late-life and warm and cold phases. Our interactive learning platform provides a great snapshot of some of this innovative thinking.
You can see more details in the PDF herebelow