The announcement of Cuadrilla Resources’ closure of its Lancashire site[i] this month is far from the end of the decommissioning story. There remain many North Sea oil and gas rigs due for closure and decommissioning over the next decades. As part of the decommissioning effort, every drill site and related infrastructure has to be made safe and secure to prevent greenhouse gases, such as methane, from leaking into the atmosphere.[ii]
Failing to decommission is not an option
The oil and gas industry needs a decommissioning strategy to help meet the UK’s Paris Accord commitments and the net zero carbon emissions by 2050 target, as the country moves ahead in its energy transition. Decommissioning is only one strand of the oil and gas sector’s efforts to reduce their carbon footprint and, at the same time, is an essential requirement to ensure continuing investor and government support in new North Sea projects.
Paying for decommissioning is a problem
The industry needs to fund the costly engineering solutions, removals and disposals needed to retire and decommission North sea oil and gas structures, at an estimated £77 billion, of which £24 billion will come from taxpayers, reports the National Audit Office.[iii]
For both the government and industry the challenge is finding not only the engineering solutions, but also the vital fiscal solutions to fund such efforts, in order to fully complete the story.
Quatre Ltd. solves the decommissioning funding challenge
Fortunately for both government and industry, it is possible to meet these challenges, given the right regulatory frameworks and funding packages. Although the technological solutions are well known, providing the right fiscal answers that are affordable is proving a greater challenge for the industry.
Quotes by Paul Jardine CEO Quatre Ltd.
“Quatre’s range of solutions protects the public purse and enables clients to put aside funds for future decommissioning and rehabilitation.”
Quatre’s solutions are “crafted to meet the specific challenges facing both industry and government in funding the cost of decommissioning and rehabilitation, while also providing useful environmental and economic benefits.”
Quatre Ltd provides its clients with the following:
- The setting up of a Special Purpose Trust, designed to protect the public purse from decommissioning liabilities and ensure that economic recovery is maximized.
- Provide post-decommissioning liability insurance to address the risk of failure of any decommissioning work.
Quatre Ltd provides services and products that support the financial risk management associated with the decommissioning of oil, gas and other extractive industry assets. Quatre’s services and products allow industry to:
- Manage decommissioning and post-decommissioning liability
- Protect the public purse
Paul Jardine, an oil and gas industry veteran founded Quatre Ltd in 2013. Quatre’s integrated team of professionals, covering insurance brokerage, investment management, legal, taxation, trust management and E&P operations, helps industry clients address the financial requirements associated with decommissioning liabilities. Quatre is an Appointed Representative of Property Insurance Initiatives, who are authorized and regulated by the UK Financial Conduct Authority, in respect of the negotiation and placement of post-decommissioning liability insurance policies.
Note: Paul Jardine is available for interview
For more information contact
27 John Snow Place, Oxford, OX38BB, UK
Mobile: 0758 0469 514 / Skype: oxfordprospect