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