The Courier & Advertiser (Perth and Perthshire Edition)
Fife conference hails ‘bumper year’ for decommissioning
Government could potentially be liable for decom costs
A UK Government official said yesterday that 2019 was a “year of scrutiny” for the offshore oil and gas decommissioning sector – and it won’t be a “one-off”.
Pauline Innes, decommissioning director at the Offshore Petroleum Regulator for Environment and Decommissioning (Opred), said more stakeholders were paying attention to the sector’s financial and environmental footprint.
Ms Innes also told the audience at the Offshore Decommissioning Conference in St Andrews that 2019 was a “bumper year” for oilfield dismantling project approvals at Opred, part of the UK department for Business, Energy and Industry Strategy (Beis).
She said 2019 marked the start of
“serious” discussions about reusing and repurposing oil and gas infrastructure.
Ms Innes said talks had taken place about using oil rig “jackets” on fish farms and platform accommodation units for offshore wind farm construction projects.
She said the debate around Shell’s plans to leave the huge Brent platform legs in the North Sea was a “litmus test” gauging “wider societal opinion”.
The UK Government intends to issue a permit allowing Shell to leave the legs in situ, but has met with opposition from Germany.
Discussions with Germany and other parties are ongoing, Ms Innes said, adding: “The decisions we make in the UK are being scrutinised beyond our borders and that will continue.”
Ms Innes also referenced a recent report from the National Audit Office (NAO), which estimated that dismantling the UK’s offshore oil and gas infrastructure would cost taxpayers £24 billion.
Oil and gas companies can claw back some of the tax paid on profits from hydrocarbon production to offset decommissioning costs.
The report also warned the bill could be bigger as the government is liable for costs if operators run out of cash.
The report is also a “marker” signalling that the NAO “will be back” to look at the work being carried out in the decommissioning market, Ms Innes said.