The sharp rise of platforms decommissioning

oil rig in port

On a worldwide basis, the industry decommissions an average of 120 offshore rigs a year. The prospective decommissioning of over 2,000 aging offshore oil and gas platforms, subsea wells and related assets is an upcoming challenge for companies as well as government treasuries…

Offshore oil drilling, pioneered in the Gulf of Mexico in 1947, is also the first to experience the need for decommissioning with foreseeable costs of $26 billion. In the area of the UK continental shelf alone, the probable cost of prospective future closures is estimated at £50 billion. A new study by IHS Markit predicts that global spending on decommissioning will increase from $2.4 billion in 2015 to $13 billion a year by 2040. In the next five years, Europe will account for about 50 percent of global decommissioning spending, as major oil and gas structures in the North Sea are removed. In the North Sea, Australia and New Zealand, decommissioning of offshore oil and gas installations is at a pioneering stage, in which the technological, environmental, regulatory, political and financial aspects are evolving.

This feature looks at the debate regarding whether the industry should remove major installations or leave rigs in place and turn them into reefs, and the financial challenges of decommissioning. “At present, there are two main options being discussed—removal and leave in place,” says Paul Jardine CEO of Quatre, a provider of exit strategy management solutions (ESMS) for clients with environmental liabilities in the energy industry. Read More

Leave a Reply

Your email address will not be published. Required fields are marked *