Oil and gas companies will have to pay £58 billion in total to clear the North Sea of disused oil and gas facilities in coming decades, according to experts at the industry regulator writes Mark Williamson.
The Oil & Gas Authority has cut its estimate of the cost of removing the hundreds of platforms, wells and pipelines in the North Sea by around £2bn since last year, from £59.7bn.
The reduction in the bill would still leave the taxpayer likely to face a charge of more than £20bn in respect of the relief firms could expect to enjoy.
The number of installations has increased since last year, following work on the development of new fields.
However, the OGA said the reduction in the estimate reflected the benefits of the experience gained by firms that have worked on decommissioning fields such as Brent, increased efficiency and advances in technology. The increase in the crude price since late 2016 has encouraged some firms to push back the expected decommissioning date for some assets.
The OGA’s operations director Gunther Newcombe said it was pleasing to see the industry make real progress towards reducing the cost of decommissioning towards the target of less than £39bn. He added: “Costs still need to reduce further and industry must keep focused.”