February 16, 2016

Norway’s decommissioning market has the potential to be the second largest in the North Sea after the UK Continental Shelf, according to Oil & Gas UK’s first Norwegian Continental Shelf Decommissioning Insight report, which provides a forecast for the region over the next decade. The publication was launched today (February 16) at the Norwegian Petroleum Society’s North Sea Decommissioning conference in Oslo.

Oonagh Werngren, Oil & Gas UK’s operations director, said: “While the Norwegian oil and gas industry is less mature  than the UK sector and decommissioning activity is in its infancy, the report shows there are 12 concrete facilities, 19 floating steel facilities, 88 steel facilities and nearly 350 subsea systems in place, most of which will eventually require decommissioning. An estimated 3,000 wells will also need to be plugged and abandoned.

“Oil & Gas UK has worked together with the five key operators on the Norwegian Continental Shelf to analyse data that reveals there will be twenty three decommissioning projects, ranging from small subsea tie-backs to full-scale integrated platform removals, between 2015 and 2024.  With the Norwegian Petroleum Directorate estimating that decommissioning expenditure during this period could reach NOK 160 billion (£12.5 billion), the activity represents a significant emerging business in the sector.”

The Norwegian Decommissioning Insight is the latest in a series of documents Oil & Gas UK has published to help the industry prepare for forthcoming decommissioning projects and follows the publication of the latest annual UK Decommissioning Insight in 2015.

Ms Werngren adds: “While decommissioning activities are steadily growing, the industry’s efforts are focused on maintaining offshore production in the North Sea for as long as it’s safe and economically possible to do. To sustain the health of the sector, we must help an efficient decommissioning market emerge as part of, and alongside, the industry’s continued and sustained programme of capital investment in new developments. These insight reports will broaden understanding and increase visibility of the growing decommissioning market to enable the supply chain to develop the skills, technologies, expertise and cost-efficient solutions required by operators”.

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Notes to Editors

  • Oil & Gas UK is the leading representative organisation for the UK offshore oil and gas industry. Its members, which number over 450, are companies licensed by the Government to explore for and produce oil and gas in UK waters and those who form any part of the industry’s supply chain.
  • Oil & Gas UK’s Norwegian Continental Shelf Decommissioning Insight 2016 is compiled from the responses of five  companies operating on the Norwegian Continental Shelf (NCS) to an Oil & Gas UK survey carried out between June and December 2015. The survey required operators to provide data on their decommissioning activity forecasts on the NCS for the period 2015 to 2024.
  • The survey structure is based on the components of the decommissioning Work Breakdown Structure outlined in Oil & Gas UK’s Decommissioning Cost Estimation Guidelines. Further information on the survey methodology can be found in the appendix of the report.
  • The information is presented in the report on a non-attributable and aggregated basis. Oil & Gas UK has not applied any additional conditioning to the figures. The collection and analysis of the data by Oil & Gas UK on behalf the industry has the support of the Norwegian Petroleum Directorate and Norsk Olje & Gass.
  • Oil & Gas UK has published a range of documents to help the industry prepare for forthcoming decommissioning projects and increase the efficiency of activities. It recently published guidance to improve the efficiency of inspection and maintenance activities in late-life asset management and decommissioning and good practice in bringing into the UK market new solutions which have the potential to deliver cost reductions and manage activity more effectively.
  • For further information, please contact Lucy Gordon on [email protected] or 01224 577331.

Oil & Gas UK’s Norwegian Continental Shelf Decommissioning Insight 2016 report can be downloaded at https://oilandgasuk.co.uk/decommissioninginsight.cfm .