OGA Warns UK Could Face Higher Decom Costs

The UK Oil and Gas Authority (OGA) has published its new decommissioning strategy, which stresses that the market could face higher decommissioning costs if action is not taken to improve commercial practices.

The strategy explains that there is instability in the UK decommissioning market due to fragmented ownership and fluctuations in commodity prices. Because of this instability, there is a risk of decommissioning becoming more costly to the operators, and thus to the UK government, the OGA highlighted.

Priorities outlined in the strategy which could help foster a competitive and sustainable market include A more collaborative culture between operators and the supply chain, data transparency, and the use of campaigns. The strategy also emphasizes the significance of decommissioning to deliver maritime restoration as part of the UK’s energy transition to net zero and highlights emerging opportunities to reuse or repurpose infrastructure and reservoirs.

“Our focus on cost efficiency remains resolute and is still an integral part of our decommissioning strategy,” Pauline Innes, the head of decommissioning at the OGA, said in an organization statement.

“What this revision does is reflects the current state of decommissioning in the basin and integrates energy transition as a key priority. Now, if redundant infrastructure has the potential for reuse, we will flag that to the operators, and if it is to be decommissioned then we see great win-win opportunity,” Innes added.

“Minimizing cost is good news for operators, and the exchequer, but decommissioning also provides much needed investment for our world-class supply chain. As part of this, the OGA is continuing to encourage companies to get sizable well decommissioning campaigns going which could be hugely impactful in terms of cost savings and also offer stability and much-needed certainty to the supply chain,” Innes went on to state.

The OGA’s latest decommissioning strategy builds on its original decommissioning strategy published in 2016. The new strategy focuses on four priorities; planning for decommissioning; commercial transformation; supporting energy transition from late life into decommissioning; and technology, processes, and guidance.

Read the latest issue of the OGV Energy magazine HERE.