Home: Issue 4 2011 › Preparing for the future
Preparing for the future
04/05/2011 | Channel:
Technology, Equipment, Exploration & Production, Drilling, Subsea, Support Services
In the years to come decommissioning will play a key role in the North Sea oil and gas industry
Over the last 40 years, the North Sea has been a prominent driving force in oil and gas exploration and production (E&P) activities. Yet the mature status of this region and its numerous assets is increasingly becoming a concern, as many of these structures are coming towards the end of their designed lifespan. As such the sector faces new challenges in the decommissioning and removal of this scale of infrastructure. Whilst the advent of this industry within the North Sea is a relatively recent development, it is one that it estimated to grow rapidly in both the short, and long-term.
At present there are over 600 offshore oil and gas installations within the North Sea, 470 of which are in UK waters. This includes both subsea equipment and platforms, alongside other offshore assets such as more than 10,000 km of pipelines, approximately 5000 wells, and accumulations of drill cuttings. Whilst many North Sea fields are still very much in operation today, with only a small number having been decommissioned, the potential activity within the decommissioning industry is not to be underestimated. Under current regulatory requirements, over 90 per cent of offshore structures will be removed and brought to shore for recycling and disposal, with the other ten per cent looked at individually to assess the viability, on a technical and safety level, of removing them.
Initial estimations place the cost of decommissioning these facilities at between £24 and £30 billion from 2010 to 2040. On a similar note, Brian Nixon of Decom North Sea, stated: “The increase in decommissioning activity is likely to reach around £1.2 to £1.4 billion per year within the course of the next two to three years.” Having recognised that this scale of activity brings with it numerous opportunities for UK businesses, Decom North Sea was established to tackle the main areas of weakness and the bottlenecks, which could potentially inhibit the UK decommissioning supply chain.
Whilst many potential suppliers consider a lack of decommissioning experience as a
major barrier to the market, Decom North Sea actively looks to bring together companies from different areas to develop effective solutions. “We believe that some 300 companies will make up the majority of the decommissioning supply chain, which is a complex chain of small and large business, major operators and contractors, service specialists, consultancies and technological companies,” notes Brian. At least part of this supply chain will also be made up from European specialists and businesses.
In order to develop an effective supply chain, Decom North Sea is working to promote the expertise, knowledge and technology within these different businesses, and to create a decommissioning programme that utilises these capabilities. Additionally, with a strong supply chain behind it in the UK, Decom North Sea sees further opportunities to bring these skills to the international market. As with the birth of any industry, North Sea decommissioning is still in its early stages, but in the next few issues of European Oil and Gas we will continue to explore this burgeoning sector further, through some of our profile companies operating in this industry.