Bill: Tak­ing the st­ing out of colos­sal off­shore decom­mis­sion­ing costs a pri­or­ity for those in­volved

The Press and Journal (Moray) - - BUSINESS -

Tak­ing the st­ing out of off­shore decom­mis­sion­ing costs is a pri­or­ity for the UK oil and gas in­dus­try and the govern­ment.

Last sum­mer, the Oil and Gas Author­ity re­vealed UK North Sea decom­mis­sion­ing would cost £59 bil­lion in to­tal.

Tax­pay­ers will be bur­dened with a hefty share of the costs.

En­ergy con­sul­tancy Wood Macken­zie fore­casts that the UK Govern­ment will spend around £25bn on tax re­lief in the fu­ture – about 45% of the to­tal re­main­ing decom­mis­sion­ing bill.

But the OGA is work­ing with oil and gas oper­a­tors to re­duce the head­line fig­ure by at least 35% to £39bn or less.

The reg­u­la­tor is ex­pected to pub­lish a re­port later this month to outline the progress made, and pro­vide an up­dated cost es­ti­mate.

Well plug­ging and aban­don­ment (P&A) has been iden­ti­fied as the most ex­pen­sive phase of off­shore decom­mis­sion­ing.

A re­port pub­lished last year by Scot­tish En­ter­prise said well P&A would ac­count for a whop­ping 47% of to­tal decom­mis­sion­ing spend be­tween 2016 and 2025.

Oil and Gas UK’s 2017 Decom­mis­sion­ing In­sight in­di­cated 1,624 wells will be plugged and aban­doned through to 2025.

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