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Oil and Gas Authority aims to complete decommissioning for less than £39bn

The oil platform in the North Sea. Picture: Danny Lawson/PA Wire.

The oil platform in the North Sea. Picture: Danny Lawson/PA Wire.

Decommissioning the North Sea could cost an estimated £59.7bn but the UK Oil and Gas Authority (OGA) has set the goal of completing the work for less than £39bn.

But operations director Gunther Newcombe said “significant change” would be needed in the industry if the target was to be met.

He spoke as the OGA published the new cost estimate for decommissioning work in the UK Continental Shelf (UKCS), with this total based on data from 34 operators and covering the cost of dismantling all current and proposed offshore facilities.

The OGA has set the target of reducing decommissioning costs by 35%, with the report saying there was a “shared desire” from both the industry and the UK government to achieve this.

The work has been carried out at a time when the number of fields in the North Sea that are approaching the end of their economic life is increasing.

Mr Newcombe said: “In our Decommissioning Strategy we said we needed to better understand the true cost of decommissioning and then work to reduce these costs by at least 35%.

“This report provides us with a starting point cost estimate of £59.7bn to decommission UK oil and gas infrastructure.

“The challenge now is to save industry and the taxpayer money and achieve safe decommissioning for £39bn or less.”

He added: “To achieve this target there will be a need for significant change in the way decommissioning is approached and behavioural change will be a critical component.

“The OGA will continue to work closely with operators and the supply chain to ensure key information and lessons are shared and new approaches to contracting are developed.

“There is a clear and sizeable opportunity for the supply chain to develop an efficient, low cost and exportable industry capability.”

Colette Cohen, chief executive of the Oil and Gas Technology Centre (OGTC) said: “Technology will be a key contributor to improving decommissioning costs in areas such as well-plugging and abandonment, which represents around 50% of decommissioning costs, and the ideas generated by our recent wells technology competition will help realise this goal.”

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