Increasing opportunities for decommissioning

However, taking full advantage of these will require planning by the industry to ensure that companies have the right skills and capacity in place to capitalise on these opportunities.

The study which has been developed by Scottish Enterprise in partnership with Decom North Sea and Accenture, mapped the decommissioning supply chain in the UK Continental Shelf (UKCS) and examined industry capability and capacity, and the challenges and opportunities around this.

It found the industry has particular strengths in areas such as topsides cleaning (the removal of hydrocarbons and hazardous materials from infrastructure), disconnection and onshore disposal.

However, the report concludes that current average capability for the whole supply chain is 35 per cent lower than the perceived ideal level. Areas where significant opportunity for development exists includes well plugging and abandonment and infrastructure removal - while resources such as engineering staff and vessels, including heavy lift, may be limited.

Launching the report today at the Decom North Sea and Oil & Gas UK Offshore Decommissioning Conference in St Andrew’s, Energy Minister Fergus Ewing said:

“The Scottish Government is committed to supporting and helping offshore contractors and supply companies to work together. We have a responsibility to ensure that the supply chain is ready and prepared to grasp these significant opportunities.

“Decommissioning will develop into a major business activity and it is critical that we in Scotland receives economic benefits from this activity. The decommissioning of North Sea oil and gas facilities is projected to cost over £30 billion or the next three decades. This clearly represents a growing business opportunity as well as a challenge for the Scottish supply chain.

“With up to 24 billion recoverable barrels with a potential wholesale value of £1.5 trillion, more than half of the resources in the North Sea, by value, still to be extracted, it is clear that the industry will make an important contribution to the Scottish economy for decades to come.”

Decommissioning is highlighted as one of the key opportunities for the sector within Scotland’s industry-led oil & gas strategy.

David Rennie, head of Oil & Gas at Scottish Enterprise said:

“Although the use of technology and increased recovery means that many fields will continue to operate beyond their initial expected lifecycle, we know that an increasing number of fields and installations will be decommissioned over the next 15 years. We’ll be continuing to work closely with industry to look at new ways of developing capacity, and ensuring our supply chain is aware of these opportunities and how they can access them.”

Brian Nixon, chief executive at Decom North Sea added:

“The offshore decommissioning market is still at a relatively early stage, and so it has been very helpful to carry out this assessment of current strengths and capabilities across the wide variety of skills, services and technologies required. The findings will allow Decom North Sea and the enterprise agencies to focus their support and advice on targeted areas in order to build on existing capabilities and to hopefully address perceived areas of lesser strength.

“With extremely buoyant levels of activity being forecast across the North Sea, we expect companies from all regions to benefit from long term business opportunities in the decommissioning sector. DNS member companies located in the south east are likely to benefit from the many projects in the southern North Sea, while Scottish specialists will almost certainly benefit from their close proximity to the fields in the central and northern North Sea.”

Over the next two months, Accenture will be hosting workshops for both operators and engineering companies to take up the challenges put forward by the report.

Luca Corradi, managing director for Accenture’s Resources business in Aberdeen, said:

“The industry acknowledges the need to be innovative in its approach to decommissioning and that driving collaboration across the supply chain is now the priority. By bringing together the key players at our Innovation Centre we will begin discussions around well plugging and abandonment, identified as key areas of opportunity.”