More than 1,000 North Sea oil and gas wells will be decommissioned over the next five years, the UK regulator has said, carrying a multi-billion-pound prize.
The North Sea Transition Authority (NSTA) has estimated 150-200 wells will be fully decommissioned each year over that time frame, at an annual spend of £700m – £1bn.
Head of decommissioning Pauline Innes and decommissioning engineer Rebecca Allan gave presentations at an event organised by the regulator and trade body Decom North Sea in Aberdeen earlier.
Ms Allan said there are currently around 700 inactive development wells needing to be plugged and abandoned (P&A) in the sector, and another 1,000 are expected to become inactive between now and 2026.
It comes as the regulator seeks to cut the cost of North Sea decommissioning – of which nealry half is made up of well P&A.
Ms Innes said there has been progress on well campaigns over the last 18 months, giving a boost to suppliers and efficiencies.
“This time last year there was maybe one campaign we could see in the marketplace. As I stand in front of you today, we’ve got another four or five which, if not complete, are nearing completion.
“That’s a phenomenal response from both operators and the supply chain.”
Ms Innes said there is more which can be done in the area, with more efficiencies to come.
© Supplied by Mhairi Edwards/DCTLooking across the sector, the NSTA predicts £20 billion of spending on decommissioning between now and 2031, with 46% of that cost accounted for by P&A of wells.
It comes as a report this month showed a slowdown in progress in cutting decommissioning costs – for which the UK taxpayer provides rebates – which decreased by just 2% last year.
Overall, cost projections have dropped from £60bn in 2017 to £44.5bn.
However, it means that reaching the target set out in 2017 – a 35% cut to £39bn by the end of this year – looks unlikely.
The regulator is also seeking to meet the targets of the North Sea Transition Deal, signed last year, which set a voluntary target of 50% local content for decommissioning work by 2030.
Ms Innes said the well decom market is an opportunity to achieve that.
Alasdair Thomas, decommissioning manager at the regulator, later added: “The magnitude of the opportunity here is measured in billions of pounds.
“That’s worth getting out of bed for.”
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