North Sea crisis: 150 oil rigs could be scrapped in 10 years

Oil rigs are left in the Cromarty Firth on February 2, 2016. Pic: Getty
Oil rigs are left in the Cromarty Firth on February 2, 2016. Pic: Getty
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Almost 150 oil rigs in UK waters could be scrapped within the next 10 years, according to industry analysts

Douglas Westwood, which carries out market research and consultancy work for the energy industry worldwide, said it anticipated that “146 platforms will be removed from the UK during 2019-2026”.

The North Sea has been hit hard by plummeting oil prices, with the industry body Oil and Gas UK estimating 65,000 jobs have been lost in the sector since 2014.

But Douglas Westwood said that decommissioning could provide an opportunity for the specialist firms involved in the work.

Later this month it will publish its decommissioning market forecast for the North Sea - covering Denmark, Germany, Norway and the UK - over the period 2016 to 2040.

READ MORE: Peter Jones - Crude facts about North Sea future

Ahead of that a paper on its website predicted that the “UK will dominate decommissioning expenditure”.

This is down to the “high number of ageing platforms in the UK, which have an average age of over 20 years and are uneconomic at current commodity prices, as a result of high maintenance costs and the expensive production techniques required for mature fields”.

Douglas Westwood said: “The oil price collapse has been bad news for nearly every company involved in the industry, but one group that could actually benefit from it are specialist decommissioning companies.

“For these companies there is an opportunity to be part of removing the huge tonnage of infrastructure that exists in the North Sea. With oil prices forecast to remain low, life extension work that has kept many North Sea platforms producing long past their design life no longer makes commercial sense.”