Fears of North Sea decommissioning

The North Sea energy industry faces a potentially crippling domino effect unless action is stepped up to save key infrastructure, a conference heard yesterday.

Oil and Gas Authority (OGA) chief executive Andy Samuel and BP North Sea boss Trevor Garlick warned of a looming battle to stop vital parts of the production network falling into disuse.

Mr Samuel, tasked with getting the industry’s new regulator up and running, said work was already under way to keep as much oil and gas as possible flowing through pipelines as more North Sea fields reach decommissioning.

Mr Garlick said the recent decision by Fairfield Energy to decommission its Dunlin assets earlier than expected, threatening an export route from EnQuest’s Thistle Alpha platform, was a worrying “signpost” for fields and infrastructure being taken out of

Statoil’s £4.5 billion-plus Mariner development, one of the biggest investments in the North Sea in years, shows oil and gas production in the area is far from over.

Efforts to maximise the value of production by driving down inflated operating costs, irrespective of incentives in next month’s Budget, could be hampered by infrastructure issues.

There are also growing fears that oil flows to the 34-year-old Sullom Voe terminal in Shetland may be so badly hit by decommissioning that its future will be at stake.

OGA is in discussions between operators and partners in an attempt to avoid further premature decommissioning which Mr Samuel said could easily turn into a “domino effect”.

OGUK chief executive Deirdre Michie said it was one of the many challenges facing the industry just now, but work was being done to avoid an acceleration of decommissioning that could harm production.

Health and safety firm Survivex yesterday said it was increasing its oil and gas projects.