Scotland aiming to capitalize on UK offshore decommissioning

Offshore staff

ABERDEEN, UK – The Scottish government’s economic development agencies have unveiled a new decommissioning action plan, designed to help the industry in Scotland to take advantage of opportunities on the UK continental shelf (UKCS).

Industry association Oil & Gas UK forecasts estimated spending on decommissioning in the sector of £17.6 billion ($21.54 billion) between now and 2025.

Throughout the UKCS, 302 oil and gas installations, 373 subsea installations, 16,000 km (9,942 mi) of pipelines, and more than 5,000 wells will eventually need to be decommissioned.

The value to Scotland could reach £11 billion ($13.46 billion) by 2025, supporting at peak around 23,000 jobs.

Scottish Enterprise and Highlands and Islands Enterprise, which developed the action plan, aims to establish the country as an international Centre of Excellence for decommissioning and to assist formulation and delivery of effective decommissioning solutions.

There are six strategic objectives - information, supply chain, technology and innovation, infrastructure, skills and training, and international opportunities - to be delivered through:

• Development of a Decommissioning Support Program providing expert advice to 50 companies

• Engagement with 150 companies to raise awareness of and stimulate demand for innovation and R&D support for decommissioning

• Engagement with ports and onshore yards to encourage future investment opportunities

• Identification of overseas decommissioning opportunities and facilitating trade missions to/from Scotland to explore inward investment/partnership opportunities.

Scottish Enterprise and Highlands and Islands Enterprise will lead the campaign, in collaboration with Skills Development Scotland, the Oil and Gas Authority, the Department of Business Energy and Industrial Strategy, and industry bodies such as Decom North Sea and Oil & Gas UK.

Minister for Business, Innovation and Energy Paul Wheelhouse said: “This action plan clarifies the range of different activities involved in decommissioning programs, from high value offshore activity such as well plugging and abandonment, to the relatively lower value contracts for onshore disposal of topsides and substructures.

“I am greatly encouraged by the fact that Scottish companies are already securing very significant value from a range of offshore decommissioning activities, with the majority of work being commissioned from UK contractors, and Scottish-based firms already securing the lion’s share of work secured from UK suppliers.”

The action plan aims to identify the range of activities involved in decommissioning programmes and help Scottish companies address higher value activities such as well plugging and abandonment (P&A), estimated to represent 47% of  total decommissioning activities on the UKCS.

Gavin Mackay, head of oil and gas at Highlands and Islands Enterprise (HIE), said: “Maximizing economic recovery and further developing exciting prospects west of Shetland remain a priority for the industry and HIE’s support to the sector.

“Some of the largest oil and gas structures in the North Sea were fabricated in the Highlands and Islands and in time, it would great to see them continue to return here to be safely and efficiently dismantled…”

12/23/2016

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