The chief executive of Decom North Sea said the decommissioning sector had some “trust issues” to deal with as it moves forward.
Roger Esson was speaking to delegates at this year’s Offshore Decommissioning Conference in St Andrew when he said the industry was “cooperating at best” rather than collaborating.
He made the keynote address to hundreds of members of the industry on the first day of the two-day event.
Esson said UKCS had a “supply chain in crisis” with firms looking for work amid the continued oil price decline.
He spoke after Oil & Gas UK’s economic director Mike Tholen, who said there was an “exciting opportunity” in decommissioning in the years ahead.
The Decom North Sea boss said:“We’ve got a supply chain in crisis, we’ve got operators who don’t have cash, and we’ve got real problems with the supply chain who are just looking for work.
“It’s not all rosy, we have some trust issues to deal with. Collaboration is a word that is bandyed about quite a lot at the moment and I don’t think in most cases we are collaborating. I think we are cooperating at best and I think some of the behaviours we’re seeing are not good for the long-term sustainability of the business. While I’ve been out talking to members there have been two main themes emerging – never-ending tendering activity and contracts not actually being awarded on the back of it.
“One of my members told me that in the good times they were tendering 200 tenders in a year, and now with half the people they’re doing 400 tenders. There’s a hidden cost to the supply chain at the moment in the tendering that’s going on.
“There’s a whole hidden cost within the supply chain that has got to be recovered somewhere and we need to do something about it.
“The fundamental issue we have at the moment is the supply chain looking for work and looking for work now, not looking for work in three years time.
“As I talk to members the near-term opportunities and the big ticket items are in wells at the moment so I’m really keen to see how we shift the dialogue within the North Sea and how we can assist in the well arena and help to bring through some new technologies and actually remember there are some new technologies out there now and people just don’t know about them and that’s a key one for us, how we communicate that.”
Esson’s words also came after a groundbreaking new report predicts a steady rise in decommissioning work in the UK and Norway over the coming decade.
Oil and Gas UK (OGUK) said this year’s Decommissioning Insight survey is the first to incorporate the UK and Norwegian markets.
It said £2.1billion was spent on decommissioning in the UK and Norway in 2015, up £500million on the previous year.
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