A North Sea decommissioning firm has thrown a rare piece of public criticism up the supply chain towards the owners of the Foinaven FPSO and oilfield.
In a widely-issued press release, Atlas Decom of Inchgreen, on the banks of the River Clyde, has vented frustration directly at Teekay (NYSE: TK) and BP (LON: BP) over the decision to take the Foinaven FPSO to Denmark for decommissioning.
The statement said that, had Atlas’ site been selected, it would have created 60 “well-paid long-term” jobs in the local area, with another 30 to follow thereafter.
Altas lamented the decision to instead take the vessel “hundreds of miles abroad to a yard in Europe”, rather than its own site just 20 miles away from where the ship currently sits idle at Hunterston.
Although the Foinaven FPSO was operating at the namesake BP oilfield for 25 years, the vessel is owned and operated by Teekay who has control over where it is sent for recycling.
Teekay has not responded to a request for comment.
Atlas also cited previous comments from BP on the need for a dry dock for FPSO recycling in Scotland which Atlas said was a “driver” its decision to invest in Inchgreen in August last year.
Teekay
Atlas also made claims – which it has not substantiated – alleging taxpayer funds have been used for decommissioning of the vessel overseas via decom rebates.
The Treasury has not confirmed whether any such rebates have been granted.
Atlas said: “The owners and operators of the Foinaven field and its assets have an opportunity to realise that the end-of-life assets remain in the UK and contribute to the circular economic supply chain having received the benefit for a quarter of a century.”
The firm said the vessel owners “should be supporting the international growth opportunity that Scotland’s oil and gas decommissioning policy has sought for the past ten years or so”.
Atlas added that it is working with the Scottish Government on an action plan that should “remove the final obstacles in the decision-making process” and benefit local jobs.
£40m to UK suppliers – BP
As lessee of the vessel, BP only had control over the decision to take the vessel to Hunterston on Scotland’s west coast for removal of BP equipment and signage, before it was handed back to Teekay for full dismantling.
The oil major said the contracts it has awarded over the last 15 months for Foinaven’s disconnection and removal stack up to £40 million for UK suppliers.
A spokesperson said this includes the contract with Peel Ports at Hunterston “which bp selected as the location for final work to prepare the FPSO to be handed back to its owner Teekay.”
They added: “bp has now completed all the work at Hunterston and has returned the FPSO to Teekay who have reassumed full responsibility for the vessel and its future operations, including selecting the location for dismantling and recycling work, carrying out or procuring the actual recycling activities and bearing any costs associated with this.
“bp continues to see significant value and expertise in the UK supply chain and seeks to source local services where possible, assuming they meet key criteria relating to safety, capability, cost and quality. We engage constructively with government, regulators and the supply chain on the topic of local content of decommissioning projects and are always happy to engage directly with supply chain partners to help inform their plans to capture more of the UK decommissioning market.”
The Inchgreen site lies just 20 miles from Hunterston and had hoped to win the work on Foinaven.
The North Sea Transition Deal, signed last year with the UK Government, committed the sector to a 50% local content target for decommissioning – however this is only a voluntary goal in place by 2030; when much of the sector’s assets will already have been sent for decommissioning.
The Foinaven FPSO had been in production at the namesake field off Shetland since 1997, but a series of safety issues and the ship reaching the end of its design life led to BP deciding to remove the vessel last year.
It arrived at Hunterston in August.
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