Standing idle, rigs left unwanted by oil slump

THEY were once home to hundreds of staff working round the clock to tap new sources of oil beneath the hostile waters of the North Sea.

But now these exploration rigs stand idle in the calm waters of the Cromarty Firth, painting a bleak picture of the state of the oil industry.

In recent boom years, Nigg Bay, in the Cromarty Firth north of Inverness, would perhaps see a lone rig under repair.

But the bay is now filling up with redundant oil rigs towed in and moored in the deep harbour, a depressing sign of the oil bubble bursting because of plummeting oil prices.

It is set to get worse in the coming months as decommissioning costs are set to double with firms scrapping ageing assets rather than upgrading them.

Decommissioning old platforms already accounts for 4 per cent of total investment in the North Sea and it could rise to 10 per cent in the next three years.

Fairfield Energy announced it would start decommissioning its Dunlin field five years early because of low oil prices. There are 19 decommissioning projects taking place or being developed on 21 fields across the North Sea.

Now, as the price of oil continues to fall, hundreds of exploration drilling rigs could also be scrapped early, resulting in thou- sands of job losses. According to the latest annual report from offshore decommissioning analyst DecomWorld, around 20 North Sea assets will be closed down this year, with the annual figure expected to rise to nearly 40 by 2021.

The downturn has already sparked the loss of around 65,000 North Sea jobs in the past two years.

Oil firms are seeking large discounts from contractors and sending some projects back to the drawing board to find cheaper ways to build them.

Each oil rig has a crew of about 200, which means that the industry faces job losses of up to 4,000 from cuts in the use of drilling rigs alone.