Decom North Sea (DNS) has urged Chancellor George Osborne to bring “much-needed certainty” to the growing offshore decommissioning industry in the Budget next week.
Brian Nixon, the offshore oil and gas decommissioning body’s chief executive, said: “The timing and costs of decommissioning are still among the biggest concerns in the UK continental shelf. If the chancellor confirms tax relief through decommissioning relief deeds, as has been widely forecast, that will be roundly welcomed across the board.
“It would mean those operators whose fields are already approaching sub-economic levels are likely to move forward with their decommissioning programmes with greater confidence on the limits of their exposure.”
Annual decom expenditure in the North Sea is forecast to top £1billion within a few years. Mr Nixon said: “The UK Government is also being tipped to stimulate greater interest and investment in mature fields from independent operators and we would add our voice to others in the industry welcoming such a move.
“It is important that supply-chain companies as well as operators gain clarity and confidence on future market activity and timing of decommissioning projects. Contractors and small-to-medium companies, often the source of innovation and solutions, require greater assurance of operators’ plans and timescales if they are to have the confidence to invest and prepare meaningfully. There is a real need for a steadier flow of decommissioning activity to create a viable market.”
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