DECOMISSIONING presents an exciting new phase for the North Sea’s oil and gas industry. It is up to offshore operators, service companies and entrepreneurial thinkers to embrace decommissioning and because of the massive public financial commitment, make it as efficient and effective as possible.
The UK taxpayer is responsible for at least 50 per cent of decommissioning costs in terms of tax relief. In some fields the level of contribution will be considerably higher. This gives us a level of public responsibility similar to that of health professionals or law enforcers. The Scottish Government’s justice budget for 2014-15 has been set at £2.5 billion. Oil and Gas UK forecasts decommissioning expenditure to be £10.4bn until 2022. So we must be smart in how we use what we have, being efficient, innovative and creative.
As an industry we have been in a buoyant mood ever since oil and gas was discovered on the UK Continental Shelf, let’s continue that for generations to come. We have a job to do – decommissioning not only 500 structures but also 10,000 miles of pipeline. These Oil and Gas UK statistics suggest this will happen by 2040. It is the dawn of a new era.
Decommissioning is coming to the fore, but not at the beginning of oil and gas exploration and production projects as it should. It has started life as an afterthought, treated as an asset’s final project. Our experience suggests thinking about these complex processes much earlier in the lifecycle would be hugely advantageous.
I’d urge ambitious oil and gas professionals to explore their approach to decommissioning. It is a specialism and combines engineering and design with science and safety with politics. In a decade’s time it will demand proven experience.
Those who have worked on the rigs for ten to 15 years know them inside out and are arguably the best qualified to take them apart. These people can become pioneers. Decommissioning won’t be where people go to end their careers, it will be the making of them.
• Richard Heard is managing director at specialist decommissioning consultancy Strategic Decom. The second Decom Offshore event takes place on Tuesday at Aberdeen Exhibition and Conference Centre.