, Exchequer Secretary to the
Treasury, will speak at the oil and gas industry’s largest
conference – Offshore Europe – which begins in Aberdeen today (5
September).
Cleaning up and dismantling old oil rigs and pipelines – known as
‘decommissioning’ – must be carried out by all operators once
they have finished extracting oil and gas in the UK. The North
Sea is one of the first regions in the world to start
decommissioning on such a large scale.
As oil fields mature across the world, the minister has said
there is opportunity for the UK to become pioneers in this area.
He believes the sector should develop this expertise and sell it
to the world.
The Exchequer Secretary to the Treasury, MP, said:
The UK oil and gas industry supports 300,000 jobs, and with up
to 20 billion barrels of oil yet to recover, has many
productive years ahead. As the need for decommissioning grows,
we must seize the opportunity to cement the UK as a
world-leader in this field and export this knowledge globally.
Efficient decommissioning means big changes to the oil and gas
industry – requiring new technology, skills and innovative
approaches. This will ensure that decommissioning is safe and
cost-effective while also protecting the environment.
Chief Executive of The Oil and Gas Authority, Andy Samuel, said:
Decommissioning presents great opportunities for innovation and
the development of UK skills and capability. We are working
closely with operators and service providers and are already
seeing some great performance in cost efficient
decommissioning, new collaborations and technology trials. This
bodes well for the shared target of 35% cost reductions and the
considerable domestic and export value that can be realised.
The UK’s head start on cleaning up the North Sea means that 10%
of old oil and gas facilities have already been removed – and in
the next ten years alone, more than 100 platforms will need to be
scrapped and over 1,800 oil wells plugged.
The Oil and Gas Authority (OGA) forecasts that UK oil and gas
operators will spend almost £60 billion on decommissioning
between now and the 2050s.
To ensure this industry thrives, conditions must be right. The
government provides tax relief on decommissioning which covers
around 40% of the total cost for UK companies – forecasted to be
worth around £24 billion between now and the 2050s.
The OGA have
also pledged to reduce the overall cost by 35%. Taken together,
these measures will help companies make the best of
decommissioning, creating new opportunities, advancing technology
and generating more jobs.
The UK has already started to see large decommissioning projects
that demonstrate new ways of doing things and push technological
boundaries, including Brent (Shell), Murchison (CNR) and the
Southern North Sea (ConocoPhillips).
