Decommissioning Report 2017 27 Nov Final

DECOMMISSIONING INSIGHT 2017
Contents
1. Foreword 5
2. Key Findings 7
3. The North Sea Decommissioning Market 10
3.1 The Regulatory Environment 11
3.2 A Growing Market 12
3.3 Planning for Decommissioning 13
4. Forecast Activity Across the North Sea 14
4.1 Survey Development and Methodology 15
4.2 Well Plugging and Abandonment 16
4.3 Topside and Substructure Removal 23
4.4 Subsea Infrastructure 26
4.5 Onshore Recycling and Final Disposal 28
4.6 Site Remediation and Long-Term Monitoring 28
5. UK Continental Shelf Expenditure Forecasts 29
5.1 Maturity of Estimates 30
5.2 Cost Reduction Targets 30
5.3 Historical Comparison of Forecasts 30
5.4 Regional Breakdown 32
5.5 Expenditure by Decommissioning
Component 32
5.6 Operator Project Management and Facility
Running Costs 34
5.7 Well Plugging and Abandonment Costs 35
5.8 Platform Removal Costs 38
6. Glossary 41
3
HEALTH & SAFETY REPORT
DECOMMISSIONING INSIGHT
2017
2017
The UK Oil and Gas Industry Association Limited (trading as Oil & Gas UK) 2017
Oil & Gas UK uses reasonable efforts to ensure that the materials and information contained in the report are current and accurate.
Oil & Gas UK offers the materials and information in good faith and believes that the information is correct at the date of publication. The materials and
information are supplied to you on the condition that you or any other person receiving them will make their own determination as to their suitability and
appropriateness for any proposed purpose prior to their use. Neither Oil & Gas UK nor any of its members assume liability for any use made thereof.
4
1. Foreword 1
Oil & Gas UK’s 2017 Decommissioning Insight captures an even broader picture of the decommissioning
opportunities across the North Sea in Norway, Denmark and The Netherlands, as well as a focus on what the UK
will offer between 2017 and 2025. We hope this further expands the information available to operators planning
to decommission assets across the basin and assists supply chain companies in understanding the future
demand for their services and expertise within a wider North Sea context.
Our report shows the UK Continental Shelf (UKCS) is the largest decommissioning market in the North Sea,
with annual decommissioning expenditure in 2016 amounting to £1.2 billion. Over the next five years, the
annual expenditure profile is forecast to remain consistent at £1.7-£2 billion per year, indicating that there is
not a rush to decommission despite the downturn. Decommissioning will represent around 11 per cent of total
expenditure in the basin this year, compared to 2 per cent in 2010. Looking ahead, £17 billion is forecast to be
spent on UKCS decommissioning between now and 2025, which is in line with the trends we observed in the
2016 report.
The forecast shows that decommissioning activity on the UKCS is greater than for the other three countries in
the report, reflecting the total amount of infrastructure in the basin and the fact that an increasing number of
mature assets are naturally coming to the end of their productive lives. This does not mean the UKCS is entering
its declining years. Indeed, since 2014, production has increased by 16 per cent following a decade of continuous
decline and, by the end of the year, one-third of production will come from new fields that have started up since
2016. More generally, there are also signs that development activity on the UKCS could pick up in 2018, with
decommissioning expected to take place alongside more productive activities in oil and gas production.
The UK’s oil and gas industry has strived to improve its competitiveness in the face of the oil price downturn
over the last few years. The increase in operational efficiency has helped to halve operating costs and boost
production, as well as extend field life on many mature fields causing decommissioning to be postponed.
Our industry’s desire to collaborate to deliver a more sustainable future underpins this step change in
performance, and a key vehicle for promoting positive change is the pan-industry Efficiency Task Force.
This initiative has promoted sector-wide sharing of guidance, tools and best practice to support
efficiency improvement.
It is exciting to see how many companies have helped drive progress in this area across their whole business
and are now applying the same lessons to control decommissioning costs. This report provides fresh evidence
of how this focused approach has benefitted well plugging and abandonment (P&A) activities, where forecast
expenditure has reduced on average by 5 per cent across the UKCS with many companies achieving much
greater cost reductions.
With well P&A predicted to be the largest category of expenditure through to 2025, the industry is concentrating
on delivering big improvements in these high cost activities, while maintaining safety and environmental
standards at the highest levels. In support of this, industry Guidelines for the Abandonment of Wells are currently
being updated to reflect the latest lessons and best practices from around the world.
Our collective experience shows we are doing the right things now to deliver an efficient and evolving
decommissioning sector, where operators and their contractors work together to drive continuous
self-improvement. Industry is committed to working closely with its regulators and the government to reach
the shared target of a 35 per cent reduction in the total cost of decommissioning on the UKCS, and good
progress is already being achieved.
5
It should be remembered that decommissioning on the UKCS is just getting under way. Our experience as a
sector in decommissioning will in time become a valuable part of the UK oil and gas industry’s international
reputation. We will be judged by how effectively we manage late-life assets and how successfully we deliver
our decommissioning programmes. If we continue to build on current achievements, the UK will in time earn its
place as a global leader in late-life asset management and decommissioning. Our competencies in this field have
already been recognised in the UK Government’s Industrial Strategy as a key opportunity for our economy and
we have clear aspirations to make decommissioning a part of a Sector Deal over the next few months.
Looking at the wider North Sea picture, 23 fields are preparing for decommissioning on the Norwegian
Continental Shelf. The Norwegian Petroleum Directorate’s outlook for the next five years shows that
expenditure will rise to £800 million by 2021. In The Netherlands, decommissioning between now
and 2025 is forecast to take place on 106 fields totalling between £650-800 million.
We face an exciting future; what we do now to build a decommissioning capability in the UK will reap rewards
for years to come. The provision of an increasingly open and broad perspective on decommissioning activity will
arm the industry with the information it requires to become more efficient and competitive. There is a very real
opportunity for the UK’s decommissioning sector to become a champion of decommissioning excellence within
the global arena. Together we can achieve this, and this Decommissioning Insight with its wealth of market
intelligence is one key way to prepare for achieving that outcome.
Michael Tholen,
Upstream Policy Director, Oil & Gas UK
6
2. Key Findings
Decommissioning Across the North Sea
• Decommissioning is a growing market across the North Sea. Activity on the UK Continental Shelf (UKCS) is 2
expected to be significantly higher than on the Norwegian, Danish and Dutch Continental Shelves to 2025. This
reflects the scale of total infrastructure and the relative maturity of the different regions of the North Sea, with
more fields reaching the end of their productive lives in the UK.
• From 2017 to 2025, decommissioning is forecast to take place on 349 fields across the four regions of the
North Sea:
• Six fields on the Danish Continental Shelf
• 23 fields on the Norwegian Continental Shelf
• 106 fields on the Dutch Continental Shelf
• 214 fields on the UKCS
• Across the four regions:

• Over 200 platforms are forecast for complete or partial removal
• Close to 2,500 wells are expected to be plugged and abandoned
• Nearly 7,800 kilometres of pipeline are forecast to be decommissioned
UK Continental Shelf in Focus

• Decommissioning, as a proportion of total UKCS expenditure, has increased from 2 per cent in 2010 to 7 per cent
(£1.2 billion) in 2016. Operators forecast this figure will rise to 11 per cent (£1.8 billion) this year.
• From 2017 to 2025, £17 billion is forecast to be spent on decommissioning on the UKCS.
• The annual expenditure profile is forecast to remain consistent over the near term at £1.7-£2 billion per year.
• Forty-six per cent (£7.9 billion) of the total UK decommissioning spend from 2017 to 2025 will be concentrated
in the central North Sea.
• The largest category of expenditure is well plugging and abandonment (P&A) at 49 per cent (£8.3 billion).
• The UK offshore oil and gas industry is committed to ensuring that decommissioning is carried out as
cost-effectively as possible, while maintaining high safety and environmental standards.
• The average forecast cost for well P&A has fallen by 5 per cent in the central and northern North Sea and west
of Shetland, and by 4 per cent in the southern North Sea and Irish Sea. These figures are expected to fall further
as lessons learnt from industry experience are shared sector-wide to further improve efficiency.
7
Forecast Decommissioning Activity Across the North Sea, 2017 to 2025
Northern
North Southern
Norwegian Danish Dutch
Sea and Central North Sea
Total UKCS Continental Continental Continental Total
West North Sea and Irish
Shelf Shelf Shelf
of Sea
Shetland
Number of
fields with
45 77 92 214 23 6 106 349
decommissioning
activity
Number of wells
568 604 452 1,624 300 113 410 2,447
for P&A
Proportion of
70% 49% 76% 64% 85% 98% 84% 72%
wells that are
(399) (297) (345) (1,041) (254) (111) (345) (1,751)
platform wells
Number of
platforms for 12 19 67 98 14 17 77 206
removal
Topside weight to 238,110 224,458 78,760 541,328 123,205 75,602 119,665 859,800
be removed tonnes tonnes tonnes tonnes tonnes tonnes tonnes tonnes
Substructure
52,655 128,024 68,979 249,658 115,176 58,602 84,502 507,938
weight to be
tonnes tonnes tonnes tonnes tonnes tonnes tonnes tonnes
removed
Subsea
13,586 31,015 4,772 49,373 2,555 590 1,385 53,903
infrastructure to
tonnes tonnes tonnes tonnes tonnes tonnes tonnes tonnes
be removed
Length of
778 2,624 2,112 5,514 222 217 1,827 7,780
pipelines to be
kilometres kilometres kilometres kilometres kilometres kilometres kilometres kilometres
decommissioned
Total tonnage 304,351 383,497 152,511 840,359 240,936 134,794 205,552 1,421,641
coming onshore tonnes tonnes tonnes tonnes tonnes tonnes tonnes tonnes
8
Forecast Decommissioning Expenditure on the UK Continental Shelf, 2017 to 20251
Central and Northern

Southern North Sea and
North Sea and West of Total UKCS
Irish Sea
Shetland 2
Operator project
management and facility £2.4 billion £216 million £2.7 billion
running costs
Well P&A £6.8 billion £1.5 billion £8.3 billion
Facilities ‘making safe’
£808 million £150 million £958 million
and topside preparation
Pipelines ‘making safe’ £121 million £162 million £283 million
Topside removal £1.3 billion £133 million £1.4 billion
Substructure removal £689 million £449 million £1.1 billion
Mattress
decommissioning and
other subsea
infrastructure removal
Pipeline decommissioning £834 million £173 million £1 billion
Onshore recycling
and disposal
Site remediation £136 million £43 million £179 million
Monitoring £20 million £10 million £29 million
Total £13.9 billion £3.2 billion £17 billion
Forecast Average Unit Costs for Well P&A and Cost per Tonne on the UK Continental Shelf, 2017 to 2025
Central and Northern

North Sea and West of Average UKCS
Irish Sea
Shetland
Platform well P&A £4.9 million £2.8 million £3.8 million
Suspended
exploration and appraisal £6.9 million £3.4 million £4.9 million
well P&A
Subsea development
£10.1 million £7.8 million £9.7 million
well P&A
Facilities ‘making safe’ £509 £928 £578
Topside removal £2,800
£3,600 £3,436
Substructure removal £4,700
1
All forecasts by region and component are rounded and so the sum of them may not come to the total
forecast expenditure
9
Decommissioning Infograph
3. The North Sea Decommissioning– Market
Facts and Figures, November 2017
In Summary Forecast
W
decommissioning
expenditure
ith significant remaining resource yet to recover, over the next five years:
the focus of the offshore oil and gas industry and its
regulators across the North Sea (the UK, Norwegian, £1.7 –
Danish and Dutch Continental Shelves) is to £2 billion
maximise economic recovery. In parallel with this, and a necessary on the UK
part of the petroleum economics life cycle, is decommissioning Continental Shelf per year
of an oil and gas field. Decommissioning is a growing market as
an increasing number of fields naturally reach the end of their £400 –
productive lives. The timing around cessation of production (CoP) £800 million
and subsequent decommissioning is notoriously challenging to plan on the Norwegian
for as it is affected by variables such as oil price, asset integrity, Continental Shelf per year
production efficiency, field interdependencies and brownfield

investment potential. £650 –
£800 million
The recent fall in oil price, by and large, has not accelerated total on the Dutch
Decommissioning Infographics
decommissioning, with only a small number of isolated examples
Continental Shelf
where this has–happened.

Facts and Figures,
Instead, the focusNovember 2017
across the North Sea
is to maintain or extend field life by reducing costs and increasing
operating efficiencies. The majority of decommissioning activity
taking place now has long been in companies’ plans.
Decommissioning
Forecast Supply
activity is forecast onchain companies Almost
The UK Continental Shelf (UKCS) currently has the largest 349 fields across the UK,able to compete
decommissioning
decommissioning market in the North Sea,expenditure
at around £1.2 billion in
Norwegian,
must be
in a global marketplace
Danish 2,50
over the next five years: for decommissioning
and Dutch Continental wells
2016 and is expected to grow to £1.8 billion in 2017. This is equalShelves
to to 2025 contracts on quality,
around 11 per cent of total UKCS expenditure, and could increase
£1.7 –
further to around 17 per cent by 2025 as more fields enter their
efficiency and cost
are forecast
plugged and ab
decommissioning phase and spend in £2otherbillion
areas reduces.
on the UK
across the Nort
to 2025, with m
Continental Shelf per year two-thirds in
The UK supply chain is therefore in a good position to develop the
requisite skillset and experience to form£400 –
an international centre of
excellence in decommissioning, with£800the opportunity
millionto export its
expertise. Companies must, however,on develop the capability and
the Norwegian Operators forecast that The Oil and
capacity to compete in a global marketplace on quality,
Continental Shelf per yearefficiency
total decommissioning Authority is tar
and cost, while maintaining focus on high environmental and spend in the
UK Continental Shelf
safety standards. £650 – will be
10
£800 million
total on the Dutch
Continental Shelf
£17 billion
between 2017 and 2025
35%
3.1 The Regulatory Environment
The OSPAR Commission is an international convention that aims to protect the marine environment of the
North-East Atlantic. As contracting parties to the OSPAR Convention, the UK, Norway, Denmark and
The Netherlands are committed to OSPAR Decision 98/3, which requires all offshore structures to be removed
during decommissioning. Pipelines are not covered by OSPAR and are regulated under national legislation.
National regulators can grant an exemption (derogation) from OSPAR Decision 98/3 for concrete structures and the
footings of steel structures that weigh more than 10,000 tonnes and were installed before 1999; the infrastructure 3
owner must demonstrate appropriate safety, environmental and technical considerations. Contracting parties are
committed to carrying out a review every five years to determine if there is a case for reducing the scope of this
derogation. The three reviews carried out since 1999 have concluded that a change in the criteria is not required.
The next review is due in March 2018.
In the UK, the Department for Business, Energy & Industrial Strategy (BEIS) is the competent authority for
decommissioning and is responsible for approving decommissioning programmes under the Petroleum Act
1998. The Oil and Gas Authority (OGA) ensures platforms do not prematurely cease production in line with the
principles of MER UK (maximising economic recovery from the UKCS), and that decommissioning is carried out in a
cost-effective manner. The OGA therefore grants approvals to cease production.
In Norway, the Norwegian Petroleum Act regulates the shutdown and disposal of offshore facilities, while the
Norwegian Ministry of Petroleum and Energy makes the final decision on decommissioning in consultation with
the Norwegian Petroleum Directorate. In Denmark, platform decommissioning is regulated by the Subsoil Act
and Offshore Safety Act, and approval and permits for decommissioning are awarded by the Danish Working
Environment Authority.
In the Netherlands, this activity is regulated under the Dutch Mining Act. In November 2016, The Netherlands
Masterplan for Decommissioning and Re-use2 set out plans to: establish a national platform to drive the
decommissioning and re-use agenda; develop a national decommissioning database; promote effective and
efficient regulation; and share learnings. The National Platform for Re-use and Decommissioning – Nexstep – was
launched in October 2017 following a joint industry project between Energie Beheer Nederland (EBN) and The
Netherlands Oil and Gas Exploration and Production Association (NOGEPA)3.
2
See the Netherlands Masterplan for Decommissioning and Re-use at http://bit.ly/EBNmasterplan
3
See Nexstep National Platform for Re-use and Decommissioning at www.nexstep.nl
11
3.2 A Growing Market

Across the North Sea, the current inventory of offshore infrastructure that will eventually require decommissioning
includes over 11,000 wells, a pipeline network of 45,000 kilometres (including cables and umbilicals), 560 steel
platforms and 24 gravity-based structures. In addition, there are some 40,000 mattresses plus hundreds of
thousands of tonnes of other offshore infrastructure such as subsea templates and manifolds.
To date, around 10 per cent of oil and gas platforms installed across the North Sea have been decommissioned
and less than 5 per cent of pipelines. While decommissioning activity has not yet started in Denmark, it is already
a growing market in the UK, Norway and The Netherlands.
Decommissioning on the UKCS expanded from 2 per cent of total industry expenditure in 2010 to 7 per cent
(£1.2 billion) in 2016. This is expected to reach £1.8 billion in 2017, representing 11 per cent of total industry
expenditure (£17.1 billion).
In Norway, decommissioning represented 2 per cent (£400 million) of expenditure offshore in 2010. The Norwegian
Petroleum Directorate forecasts that this will double as decommissioning expenditure is expected to rise to
£800 million by 20214. While in The Netherlands, EBN forecasts that decommissioning expenditure will total
between £650-£800 million over the next five years, which is similar to the forecast spend on capital expenditure
(£570-£800 million)5.
Decommissioning does not represent a new industry, but is part of the natural life cycle of an installation,
relying on many of the same people and skills that have already been developed through oil and gas exploration
and production. It encompasses a broad range of activities from well plugging and abandonment (P&A), to
cleaning and flushing of facilities and pipelines, offshore removals and onshore disposal. With almost half of
the estimated expenditure on the UKCS up to 2025 in well P&A, and a further 16 per cent to be spent on the
preparatory work for decommissioning and running facilities after they cease production, much of the employment
will be in these areas.
The operator and service sector is already applying its extensive project delivery, engineering and offshore
construction skills to deliver decommissioning projects across the North Sea and will continue to mature as
the industry learns through experience. Well P&A is a key focus area and is benefitting from increasing
technology development. Activities such as onshore recycling and final disposal are meanwhile increasingly
visible and therefore attract significant attention, despite representing just 2 per cent of total expenditure in
decommissioning on the UKCS from 2017 to 2025. The decommissioning of subsea infrastructure, meanwhile,
is a less established discipline offering scope for companies to showcase and apply their expertise by driving
innovation in subsea engineering.
In the UK, current experience suggests that the supply chain already has the necessary skills and equipment
to compete for over 80 per cent of the total decommissioning scope forecast over the next decade. However,
companies must be able to compete successfully for this work in a global marketplace on quality, efficiency and
cost. The supply chain has a significant role to play in offering cost-efficient solutions, while maintaining focus on
high environmental and safety standards.
4
See Norwegian Petroleum Directorate at www.npd.no/en
5
See EBN’s Focus on Energy report, June 2017, at http://bit.ly/EBNenergyfocus
12
3.3 Planning for Decommissioning
The decommissioning process across the North Sea involves rigorous planning and consultation with regulators
several years before production ceases. Decommissioning regulations, physical interdependencies of other fields,
asset and equipment integrity, safety and environmental considerations, available technologies and market
conditions are some of the factors that will determine the approach. Over time, the scope of each project is
refined as engineering studies and comparative assessments are carried out to determine the optimum approach.
Forecasting the precise schedule of each activity and the associated expenditure at the outset of a project is
therefore challenging. 3
In addition to the complexities involved in planning each decommissioning project, there is also a great deal of
uncertainty around the date that production will cease. CoP is not solely driven by oil price and the economics
of the field. On older assets, CoP may be driven by asset integrity challenges, or it may be dependent on the
economics of other interlinked fields or third-party tie-backs. In some cases, operators may continue production
on sub-economic infrastructure because it acts as a host to other fields.
On the UKCS, operators must gain regulatory approval from the OGA to cease production and often need to
demonstrate that they have looked at different scenarios for maximising economic recovery of reserves and
possible reuse of infrastructure. Infill drilling, subsea systems restructuring, near-field exploration and transfers
in asset ownership are ways that operators can extend field life. Oil & Gas UK has analysed 23 UK asset transfers
since 2011, which reveal that deals have extended field life by 4.8 years on average, with some fields producing
for up to an additional 14 years.
13
on the Norwegian
Continental Shelf per ye
DECOMMISSIONING INSIGHT 2017 Forecast Supply chain co
decommissioning
expenditure
£650 –
must be able to
in a global mar
over the next five years: £800 million
for decommis
total oncontracts
the Dutchon
4. Forecast Activity Across the North Sea
£1.7 – Continental Shelf an
efficiency
£2 billion
on the UK
Decommissioning Infographics Continental Shelf per year
In Summary
– Facts and Figures, November 2017 £400 –
T
Decommissioning
activity is forecast on
he Decommissioning Insight 2017 £800 million349 fields across the UK,
provides the first joint activity forecast on the Norwegian Norwegian, Danish
Continental Shelf per year
and Dutch Continental
for four regions of the North Sea: the
Forecast Shelves to 2025
Supply chain companies
UK, Norwegian, decommissioning
Danish and Dutch
Continental Shelves. Forecasts are provided for
expenditure
£650 –
must be able to compete
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the period 2017 to 2025
overto
thegive
nextafive
comprehensive
years: £800 million
for decommissioning a
picture of forthcoming activity, enabling total oncontracts
the Dutchon quality, t
£1.7to–plan for
operators and the supply chain
Continental Shelf and cost
efficiency
£2 billion
decommissioning in the most cost-effective way.
on the UK
Close to 2,500 wells are expected to be plugged Operators forecast that
and abandoned across the North Sea by 2025, total decommissioning
with more than two-thirds£400 – AroundDecommissioning A
in the UK. activity200
is forecast on spend in the
platforms are forecast£800 million Almost
for complete
removal, with just underonhalf
or 349
the Norwegian
partial
fields across the UK,
Norwegian, Danish
in the UK sector.
2,500will be
£17 billion
Shelves to 2025
On the seabed, there is an extensive network of between 2017 and 2025
£650 –
pipelines and other subsea infrastructure that
are forecast to be
plugged and abandoned
will eventually need to£800 million
be decommissioned. across the North Sea up U
total on the Dutch to 2025, with more than
After depressurisation and the removal
Continental Shelf of two-thirds in the UK
hydrocarbons, current forecasts suggest
around 7,800 kilometres of pipeline could be
decommissioned by 2025. The timing of this
activity is inherently uncertain and couldOperators be forecast that The Oil and Gas
pushed out as the industry
Decommissioning strives to maximise
total decommissioning Authority
Over 200isplatforms
targeting a
economic recovery. spend in the are expected to be
activity is forecast on Almost
349 fields across the UK,
2,500will be
removed in the North
Sea from 2017 to 2025
35%
Norwegian, Danish
£17 billion
Shelves to 2025
are forecast to be
plugged and abandoned reduction in
across the North Sea up UKCS decommissioning t
to 2025, with more than costs by 2035
two-thirds in the UK
14 Operators forecast that The Oil and Gas The average forecast
total decommissioning Authority is targeting a
4.1 Survey Development and Methodology
Data have been compiled from 25 operators on the UKCS, nine in The Netherlands, six on the Norwegian Continental
Shelf and three on the Danish Continental Shelf. There are more operators with forecast decommissioning activity
in the UK, reflecting the larger number of companies in the basin and its relative maturity.
This year, forecasts for the UKCS were collated from raw data that operators submitted as part of the OGA’s
mandatory Asset Stewardship Survey, providing even better coverage of the market than previously. Detailed
interviews were also carried out with operators on the UKCS to discover how they intend to deliver the OGA’s 35
per cent cost reduction target (see section 5). Data from The Netherlands came from Nexstep National Platform for
Re-use and Decommissioning, while Oil & Gas UK collected data directly from operators in Norway and Denmark.
All data are structured around the components of the Decommissioning Work Breakdown Structure described in 4
Oil & Gas UK’s Decommissioning Cost Estimation Guidelines6. The information is presented in a non-attributable
and aggregated format. Analysis has been split by country. The UKCS data have been split further into the following
groups: the central (CNS) and northern North Sea (NNS) and west of Shetland (WoS); and the southern North Sea
(SNS) and Irish Sea.
It should be recognised that the activity forecasts provided in this report reflect operators’ current best estimates,
and the timing is subject to change. The cost estimates provided for the UKCS could also adjust as efficiency gains
drive costs down, while market pressures could influence them in either direction.
With the aim of providing visibility of the whole North Sea decommissioning market, joint activity forecasts have
been compiled for the UK, Norwegian, Danish and Dutch Continental Shelves, where available.
In total, decommissioning activity is forecast on 349 fields across the North Sea: 214 on the UKCS, 106 on the
Dutch Continental Shelf, 23 on the Norwegian Continental Shelf and six on the Danish Continental Shelf. Forecast
activity on the UKCS to 2025 is significantly higher than in other regions of the North Sea.
6
T he Guideline on Decommissioning Cost Estimation is available to download at
www.oilandgasuk.co.uk/product/op061
15
4.2 Well Plugging and Abandonment

The purpose of well P&A is to isolate reservoir fluids within the wellbore and from the surface or seabed. This
activity is carried out in accordance with industry guidelines7, as well as the Offshore Wells Design and Construction
Regulations 19968 on the UKCS and the NORSOK D-10 regulations on the Norwegian Continental Shelf9. Well
P&A can be challenging and may involve intervention in the form of removing downhole equipment, such as
production tubing and packers, and well-scale decontamination treatment. The process also requires the wellhead
and conductor to be removed.
Well P&A is the largest category of decommissioning activity, with 2,447 wells forecast to be plugged and
abandoned across the North Sea to 2025 (1,624 in the UK, 300 in Norway, 113 on the Danish Continental Shelf
and 410 in The Netherlands). The combined forecast for the North Sea has been relatively consistent year-on-year,
clearly demonstrating the strong market opportunity that well P&A represents for the supply chain. Year-on-year
activity will average at around 230 wells per year to 2022, before a new wave of projects starts in 2023. Seventy-
two per cent of this activity is for platform wells (1,751), and the remainder are subsea wells. This ratio does
however vary when looking at each region specifically (see regional breakdown on subsequent pages).
The region with the highest number of wells forecast for P&A is the central North Sea where a quarter of the wells
(604 wells) are located, while the Danish Continental Shelf is expected to see the least amount of activity with 113
wells due to be plugged and abandoned by 2025.
Figure 1: Well P&A Forecast Across the North Sea
CNS - Platform Wells CNS - Subsea Wells SNS and Irish Sea - Platform Wells
SNS and Irish Sea - Subsea Wells NNS and WoS - Platform Wells NNS and WoS - Subsea Wells
Norway - Platform Wells Norway - Subsea Wells Denmark - Platform Wells
Denmark - Subsea Wells The Netherlands - Platform Wells The Netherlands - Subsea Wells
500
450
400
350
Number of Wells
300
250
200
150
100
50
0
2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: Oil & Gas UK, The Netherland's Nexstep National Platform, Asset Stewardship Survey
7
Guidelines on the Abandonment of Wells and Qualification of Materials for Abandonment are available to download at
www.oilandgasuk.co.uk/product/op105 and www.oilandgasuk.co.uk/product/op109
8
See www.legislation.gov.uk/uksi/1996/913/made
9
See NORSOK Standard D-010 Well Integrity in Drilling and Well Operations, (Rev.4 June 2013) at
http://bit.ly/20BWqdD
16
UK Central North Sea
• Operators forecast that 604 wells will be plugged and abandoned in this region to 2025.
• This is similar to estimates in 2016, although shifts in the timing of some projects have increased the proportion
of platform wells from 37 to 49 per cent (297).
• Sixty-two wells are planned for P&A in 2017, with around 57 wells forecast per annum to 2020.
• From 2021, around 75 wells will be plugged and abandoned each year as a new wave of projects begin activity.
Figure 2: Well P&A Forecast in the Central North Sea
120
Suspended Exploration and Appraisal Wells
Subsea Development Wells

100 Platform Wells
4
80
Number of Wells
60
40
20
0
2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: Oil & Gas UK, Asset Stewardship Survey
Number of Wells Proportion that are Platform Wells Forecast Expenditure

604 49% £4.2 billion
17
UK Northern North Sea and West of Shetland

• Forecast activity in these regions has increased from 428 to 568 wells. The 140 additional wells all lie towards
the end of the survey timeframe. This increase is primarily due to greater survey coverage rather than the
acceleration of well P&A.
• Large and complex decommissioning projects, which have long been in operators’ plans, are driving nearer-term
activity (up to 2021).
• Seventy per cent of wells (399) forecast for P&A are platform wells.
• Year-on-year activity is at around 50 wells per year, until 2023 when a new wave of projects start, peaking at
153 wells in 2023.
Figure 3: Well P&A Forecast in the Northern North Sea and West of Shetland
180
160 Subsea Development Wells
Platform Wells
140
120
Number of Wells
100
80
60
40
20
0
2017 2018 2019 2020 2021 2022 2023 2024 2025

568 70% £2.6 billion
18
UK Southern North Sea and Irish Sea
• Of the 452 wells forecast to be plugged and abandoned in these regions to 2025, 76 per cent (345) are
platform wells.
• Forecast activity has increased by 77 wells since 2016, primarily due to greater survey coverage. Most of this new
activity falls at the end of the timeframe.
• Near-term activity remains closely aligned to the forecast in 2016 and is associated with ongoing well P&A campaigns.
Figure 4: Well P&A Forecast in the Southern North Sea and Irish Sea
100 Suspended Exploration and Appraisal Wells

Subsea Development Wells
90 Platform Wells
80 4
70
Number of Wells
60
50
40
30
20
10
0
2017 2018 2019 2020 2021 2022 2023 2024 2025

452 76% £1.5 billion
Danish Continental Shelf

• Operators in Denmark forecast that 113 wells will be plugged and abandoned by 2025.
• The majority of activity – 100 wells – will take place in 2023 across four decommissioning projects, with the
remaining 13 wells in 2025.
• Ninety-eight per cent (111) are platform wells.
Figure 5: Well P&A Forecast on the Danish Continental Shelf
Number of Wells Proportion that are Platform Wells

113 98%
19
Norwegian Continental Shelf

• Around 800 of the 3,800 wells that will eventually require decommissioning have already been plugged and
abandoned on the Norwegian Continental Shelf10.
• Of the remaining 3,000 wells, 10 per cent (300 wells) are forecast to be decommissioned by 2025.
• Eighty-five per cent (254) of these are platform wells.
• Activity is forecast at around 27 wells per year to 2024, peaking at 87 wells in 2025 indicating the start of several
large projects that fall partially outside the survey timeframe.
• All the activity is concentrated in the most mature region of the basin – the Norwegian North Sea.
Figure 6: Well P&A Forecast on the Norwegian Continental Shelf
100
Subsea Development and Suspended Exploration and Appraisal Wells
90 Platform Wells
80
70
Number of Wells
60
50
40
30
20
10
0
2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: Oil & Gas UK

300 85%
10
See Abandonment of Obsolete Wells and Installations on the Norwegian Continental Shelf;
a Study into the Magnitude and Technical and Economic Challenges, June 2014,
University of Stavanger, at http://bit.ly/1m8jpNW
20
Dutch Continental Shelf
• Of the some 1,400 wells drilled in the waters in offshore Netherlands, 410 are forecast for P&A to 2025.
• Eighty-four per cent (345) of these are platform wells and the remainder subsea wells.
• Activity in the near-term to 2020 is forecast at 20 wells on average per year, increasing to an average of over 70
from 2022 onwards.
Figure 7: Well P&A Forecast on the Dutch Continental Shelf
100
90 Subsea Development Wells
Platform Wells
80
4
70
Number of Wells
60
50
40
30
20
10
0
2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: The Netherland's Nexstep National Platform for Re-use & Decommissioning

410 84%
Rig Types
Well P&A is typically carried out using a drilling rig, although in some cases, technologies exist that preclude the
need for a rig altogether. The requirements depend on various factors, including well type, water depth and
availability of rig-less techniques.
Platform wells are typically plugged and abandoned in phases. The first phase can be rig-less and uses lower cost
methods such as wireline, coil tubing or a hydraulic workover unit. This is followed by the second and third phases
that are more likely to require a rig.
Many platforms in the UK central and northern North Sea and the Norwegian Continental Shelf have an integral rig
that could be used for platform well P&A. The decision to upgrade the integral rig for P&A will depend on when it
was last used, the cost to upgrade and the availability of alternative approaches. Rig upgrades can be challenging
and costly, and operators are considering alternatives to this approach.
21
In the Dutch sector, the few wellhead oil platforms that were originally equipped with a fixed drilling derrick have
had these removed, which means all platform well P&A will be carried out with a jack-up rig or rig-less methods
where available.
For subsea wells requiring a rig, this will typically depend on water depth. For wells located in shallower water, a
jack-up rig is typically used as they operate at a lower cost.
Figure 8: Forecast Rig Type for Well P&A Across the North Sea, 2017 to 2025
Platform Wells
NNS and WoS CNS SNS and Irish Sea
Integral rig 98% Integral rig 78% Modular rig 5%
Stand-alone Modular rig 11% Other rig-less 19%
2%
semi-submersible Stand-alone jack-up 11% Stand-alone jack-up 55%
To be decided 21%
Danish Continental Shelf Norwegian Continental Shelf

Stand-alone jack-up 90% Stand-alone jack-up 40%
Other rig-less 10% Integral rig 47%
More than one rig type 13%
Subsea Wells
NNS and WoS CNS SNS and Irish Sea
Other rig-less 11% Other rig-less 11% Stand-alone jack-up 69%
Stand-alone jack-up 11% Stand-alone jack-up 2% To be decided 31%
Stand-alone Stand-alone
78% 84%
semi-submersible semi-submersible
To be decided 3%
Danish Continental Shelf Norwegian Continental Shelf

Stand-alone jack-up 100% Stand-alone jack-up 91%
Semi-submersible 7%
To be decided 2%
Combined Wells
(platform and subsea combined)
Stand-alone jack-up 50%
Other rig-less 30%
To be decided 20%
22
4.3 Topside and Substructure Removal
The removal of 206 platforms is forecast across the UK, Norwegian, Danish and Dutch Continental Shelves to 2025.
These range from small, unmanned, steel installations weighing 350 tonnes to larger, manned, steel and concrete
gravity-based structures that weigh more than 1,000 times that. The total weight of infrastructure to be removed
is close to 860,000 tonnes of topsides and 510,000 tonnes of substructure.
Activity is greatest in the UKCS where 98 of the platforms are to be decommissioned, closely followed by
The Netherlands with 77, 14 in Norway and 17 in Denmark.
Making Safe and Topside Preparation

Before a platform can be decommissioned, it must be hydrocarbon free. This is referred to as ‘making safe’
and involves cleaning, freeing equipment of hydrocarbons, disconnection and physical isolation, and waste 4
management.
The topsides are then prepared for removal, which involves separating them from the process and utilities modules
and appropriate engineering, such as installing lift points. Topsides are prepared in line with the removal method
being used (see below for the varying removal methods).
The overall activity levels for making safe and topside preparation mirror that for topside removal. Making safe
can be carried out several years prior to removing the platform, while topside preparation typically occurs directly
prior to removal and can either be contracted out separately or built into the removal contract.
Removal Methods
The most common methods for topside removal are piece-small, reverse installation (piece-large) or single-lift.
• The piece-small method involves dismantling the topsides and using demolition techniques typically used
onshore to produce small, manageable pieces that can be transported to shore.
• For reverse installation or piece-large, the topside modules are lifted separately onto a transportation barge or
the deck of a crane vessel before being taken onshore.
• The single-lift method involves removing topsides in one piece and may involve extra engineering work to
reinforce them in preparation for removal.
For the substructure, the removal method depends on the type, weight and configuration. In the southern North
Sea, Irish Sea and The Netherlands, the substructures that are to be decommissioned are primarily shallow-water
jackets that typically weigh less than 2,000 tonnes and are usually deployed in water depths of 55 metres or less;
the single-lift method is suitable for these structures.
For larger substructures (barge-launched, lift-installed and some self-floaters), the jackets may be cut into smaller
sections in situ and removed in segments. These more complex projects are typically located in the central and
northern North Sea and on the Norwegian Continental Shelf. The supply chain continues to innovate in cutting
technology to undertake this task.
23
Figure 9: Forecast Topside and Substructure Removal Across the

North Sea, 2017 to 202511
Norwegian Danish Dutch

NNS and SNS and
CNS Continental Continental Continental Total
WoS Irish Sea
Shelf Shelf Shelf
Number of
19 12 67 14 17 77 206
platforms
26 manned
Small steel 2 - 61 2 12 -
and 51
unmanned11
Large steel 17 8 6 11 5
Gravity
based - 4 - 1 - - 5
structure
Total
topside
weight to 224,458 238,110 78,760 123,205 75,602 119,665 859,800
be removed
(tonnes)
Total
substructure
weight to 128,024 52,655 68,979 115,176 58,602 84,502 507,938
be removed
(tonnes)
Water 45 to 143 118 to 190 18 to 73 66 to 174 37 to 60 22 to 50 18 to 190
depth metres metres metres metres metres metres metres
UK Central North Sea

•N ineteen platforms and eight floating, production, storage and offloading (FPSO) vessels are forecast for
complete or partial removal to 2025.
• Two are small steel structures weighing less than 4,000 tonnes, while the remainder are large steel structures
weighing between 4,500 and 56,600 tonnes.
•O perators are actively looking to group activity into multi-platform removal campaigns, particularly for
substructures that can be more easily left in situ until decommissioning activity aligns with that of other
infrastructure in the area.
• £843 million is forecast to be spent on topside and substructure removal to 2025.
11
Platforms in The Netherlands have been categorised differently into manned and unmanned installations.
24
UK Northern North Sea and West of Shetland
• Twelve platforms are forecast for complete or partial removal, four of which are gravity-based and the remainder
large steel installations weighing between 15,400 and 70,000 tonnes. Two FPSOs are also expected to be
decommissioned.
• Eleven of these platforms were built prior to 1999 and weigh in excess of 10,000 tonnes, making them candidates
for derogation under OSPAR rules (see section 3 on the regulatory environment).
• Due to the size and complexity of platforms in these regions, removal of the topside and substructure are often
carried out individually rather than as part of a multi-platform campaign. Some operators are, however, actively
looking at opportunities to decommission substructures in a campaign approach.
• £1.1 billion is forecast to be spent on topside and substructure removal in these regions to 2025.
UK Southern North Sea and Irish Sea

• Of the 67 platforms forecast for removal, only six of these weigh more than 4,000 tonnes with the majority being
4
small, steel, unmanned installations that are likely to be removed by single-lift.
• Platform weights range from 350 tonnes to 9,200 tonnes (1,900 tonnes on average).
• Several operators are already removing platforms in these regions as part of multi-platform campaigns spanning
many years. Operators with fewer platforms are exploring opportunities to combine their activities with those
of other operators.
• £582 million is forecast to be spent on topside and substructure removal in these regions to 2025.
Norwegian Continental Shelf

• Operators forecast that 14 fixed platforms and two floating production units will be removed by 2025.
• Total platform weights range from 4,000 to 30,000 tonnes (12,000 tonnes on average).
• Nine of the platforms are to be removed in a multi-platform campaign approach.
Danish Continental Shelf

• Seventeen platforms, four of which are normally unmanned installations, are to be removed from the Danish
Continental Shelf.
• Platform sizes range from 970 tonnes to 22,100 tonnes (5,700 tonnes on average).
• Operators plan to carry out all activity in a multi-platform campaign approach. The sizes of individual campaigns
range from two to 11 platforms.

• Of the 150 platforms remaining in the Dutch North Sea12, 77 are forecast for removal by 2025.
• L ooking at the total inventory offshore in The Netherlands, the platforms range from small wellhead structures
weighing just 500 tonnes to larger gravity-based structures of around 50,000 tonnes13.
• T hrough the combined effort of EBN and NOGEPA, the Dutch industry has developed a database and Nexstep
National Platform for Re-use and Decommissioning so that activity can be co-ordinated and carried out in the
most efficient manner.
12
S ee the Netherlands Masterplan for Decommissioning and Re-use at http://bit.ly/EBNmasterplan
13
See the OSPAR Inventory of Offshore Installations 2015 at https://odims.ospar.org/odims_data_files/
25
4.4 Subsea Infrastructure

Pipelines
The extensive pipeline network across the North Sea measures in excess of 45,000 kilometres and is used to
deliver hydrocarbons to receiving facilities and end-users across Europe. This transportation network is critical
when assessing the economics of field-life extension projects or new developments. It is therefore essential that
major pipelines are not decommissioned prematurely.
Options for pipeline decommissioning include full removal, decommissioning in situ, trenching and burial.
The agreed approach is decided on only when all the different methods are considered in a robust comparative
assessment that accounts for safety and environmental factors, technical feasibility, other users of the sea
and cost. All decisions are made on a case-by-case basis in consultation with key stakeholders and subject to
regulatory approval.
Around 7,800 kilometres of pipeline (including cables and umbilicals) are forecast to be decommissioned across
the four regions of the North Sea up to 2025. Around 2,000 kilometres are associated with decommissioning
projects that have already started. As pipeline decommissioning is one of the final activities in a typical project,
the timing is difficult to predict and is dependent on all other tasks that precede it. For this reason, a detailed
yearly forecast has not been provided.
Figure 10: Forecast Pipeline Decommissioning, 2017 to 2025
Trunkline (km) Other Pipelines (km) Umbilicals (km) n

CNS 631 1,367 626
NNS and WoS 170 418 190
SNS and Irish Sea 671 908 533
Norwegian Continental
64 124 34
Shelf
Danish Continental Shelf - 208 9
Dutch Continental Shelf 139 1,529 159
26
For a pipeline to be decommissioned it must be hydrocarbon-free. Making safe of pipelines involves depressurising
them and removing any hydrocarbons. Then the pipelines are cleaned and purged, with the cleaning programme
based on the specific needs of the system. This may involve the use of pigs, which are maintenance tools used to
clean or inspect the insides.
Making safe is often carried out several years prior to the next phase of decommissioning. In some cases, pipelines
can be brought back into use after making safe, reflecting the importance of the infrastructure and the drive to
maximise economic recovery of reserves where possible.
In the UKCS, for example, there has been an influx of investment in key pieces of upstream and midstream
infrastructure as private equity firms see that opportunities are still available to recover the significant resources
that remain in the basin. Antin Infrastructure Partners has taken on operatorship and invested in a major export
route called the Central Area Transmission System (CATS), while Arclight is investing in the Shetland Islands
4
Regional Gas Evacuation System (SIRGES) and Frigg UK pipeline (FUKA). Further deals this year included the sale
of the Forties pipeline, which INEOS bought from BP, and purchase of the decommissioned Thames pipeline from
Perenco by Independent Oil & Gas. The latter was with a view to using the pipeline as the export route for its
southern North Sea infrastructure.
Mattresses and Other Subsea Infrastructure

Mattresses are concrete structures that are usually used to protect or support subsea pipelines. Mattress
decommissioning typically involves recovery from the seabed. This is a diver and vessel-intensive operation, with
duration of the work dependent on the mattress age and condition. In some cases where mattresses are badly
n degraded, regulatory approval may be sought to decommission in situ.
Other subsea infrastructure includes manifolds, Christmas trees, risers, spools, jumpers, anchors and subsea
isolation valves, which are removed as part of the decommissioning programme.
Operators forecast that over 15,200 mattresses will be decommissioned across the UK, Norwegian and Danish
Continental Shelves from 2017 to 2025. Information on mattresses was not available for The Netherlands. Around
54,000 tonnes of other subsea infrastructure are also expected to be removed from the North Sea.
Figure 11: Forecast for Mattresses and Other Subsea Infrastructure Decommissioning, 2017 to 2025
Other Subsea Infrastructure

Number of Mattresses
(tonnes)
CNS 7,975 31,015
NNS and WoS 2,433 13,586
Southern North Sea and Irish Sea 4,670 4,772
Norwegian Continental Shelf 186 2,555
Danish Continental Shelf 9 590
Dutch Continental Shelf14 - 1,385
14
14
The number of mattresses forecast to be decommissioned was not available for the Dutch Continental Shelf.
27
4.5 Onshore Recycling and Final Disposal

Onshore recycling and disposal includes activities related to the cleaning and handling of hazardous waste,
deconstruction, reuse, recycling, disposal and waste management.
Preferred processes to deal with offshore structures that are no longer in use follow the hierarchy of reuse,
recycling and onshore disposal. Once the structures are onshore, disassembling and processing takes place on
specialist licensed sites. Operators have a duty to monitor all waste generated offshore and its handling and
disposal through an environmental management system15.
Transporting topsides and substructures to shore is the most visible and obvious aspect of decommissioning, yet
onshore dismantling represents less than 2 per cent (£279 million) of the estimated total UKCS decommissioning
expenditure to 2025.
Lifting and transportation costs can be significant compared to those of onshore dismantling. This is due to the
cost of equipment required and the distances to travel. Therefore, the location of onshore dismantling yards
relative to offshore structures, as well as the yards’ ability to receive the largest offshore lifting vessels, are
important factors in developing competitive bids for work.
Just over 1.4 million tonnes of offshore infrastructure are expected to be brought onshore for recycling and final
disposal from the North Sea to 2025.
Twenty-seven per cent (383,497 tonnes) will come from the central North Sea, 21 per cent (304,351 tonnes) from
the northern North Sea and west of Shetland, 17 per cent (240,936 tonnes) from the Norwegian Continental Shelf,
14 per cent from the Dutch Continental Shelf (205,552 tonnes) 11 per cent from the southern North Sea and Irish
Sea (152,511 tonnes) and ten per cent from the Danish Continental Shelf (134,794 tonnes).
4.6 Site Remediation and Long-Term Monitoring

Site remediation includes cuttings piles management, debris clearance and over-trawl surveys. Over-trawl surveys
ensure the seabed is safe for normal fishing activities to resume. Long-term monitoring is the very final stage of
decommissioning, where operators carry out surveys on the site after decommissioning has been completed and
continue to monitor the site based on an agreed programme with regulators.
In the UK, estimated expenditure for these activities from 2017 to 2025 is £208 million.
15
See Oil & Gas UK’s Environment Report at www.oilandgasuk.co.uk/environmentreport
28
£800 million349activity is forecast on
fields across the UK,
on the Norwegian Norwegian, Danish
Forecast Shelves to 2025
Supply chain companies
decommissioning
expenditure
£650 –
must be able to compete
in a global marketplace
over the next five years: £800 million
for decommissioning
5. UK Continental Shelf Expenditure Forecasts total oncontracts
the Dutchon quality,
Continental Shelf and cost
£1.7 – efficiency
£2 billion
on the UK
In Summary
T
Operators forecast that
total decommissioning
he primary objective £400
for the–UK industry
Decommissioning
activity is forecast on spend in the
Almost
£800 million UK Continental Shelf
and government is for decommissioning 349 fieldstoacross the UK,
on the Norwegian Norwegian, Danish
be carried outContinental
in a cost-effective, safe and
2,500will be
wells
Shelf per year
environmentally sound manner, but Shelves only once to 2025 £17 billion
remaining resources have been economically maximised. between 2017 and 2025
£650 –
The OGA is targeting a 35 per cent reduction in total
are forecast to be
plugged and abandoned
decommissioning costs on £800 million
the UKCS by 2035 from the across the North Sea up
total on the Dutch to 2025, with more than
2017 baseline expectationContinental
of £60 billion,
Shelf and is working two-thirds in the UK 5
with industry to deliver this.
Looking nearer term, operators forecast that £17 billion

will be spent on decommissioning in the basin fromforecast that
Operators The Oil and Gas
This is 4 per cent higher than thedecommissioning
2017 to 2025.Decommissioning total forecast Authority
Over 200is platforms
targeting a
spend in the
for the sameactivity
periodis last year,
forecast ondue to more projects Almost Shelf
UK Continental
are expected to be
being included in the report UK,
349 fields across the
2,500
rather than increasedwill cost
be
removed in the North
35%
Norwegian, Danish Sea from 2017 to 2025
estimates forandexisting projects. While 90 per cent of
Dutch Continental
these projectsShelves
are in their £17 billion
early scoping stages,
to 2025
wells
the data
reveal that around one quarter of the total UKCS well to be
are forecast
stock is anticipated to be plugged and abandonedand
plugged abandoned
over reduction in
across the North Sea up UKCS decommissioning
the period, accounting for almost half of the expenditure.
to 2025, with more than costs by 2035
two-thirds in the UK
As the industry strives towards efficient
decommissioning, operators are increasingly adopting
an approach to late-life asset management that
incorporates operational
Operators and
forecast thatdecommissioning
Theactivities
Oil and Gas The average forecast
total decommissioning
in parallel as part of their strategic planning. A goodis targeting a
Authority
spend in the
example of this is the P&AShelfof redundant wells before the un
cos it
UK Continental
field ceases production.
will be
£17 billion
The anticipated cost of well P&A has fallen across the
35% t
for well plugging and
UKCS for all well types as operators increasingly look abandonment has
to carry out such activity in a campaign approach,
reduction in fallen across all well
UKCS decommissioning types and regions of the
whereby multiple wells are grouped to costs by 2035 UK Continental Shelf
increase efficiencies.
29
5.1 Maturity of Estimates

Each year, UK operators provide the cost classification for each of their decommissioning projects using the
Association for the Advancement of Cost Engineering (AACE) classifications. These seek to define the project
stage and indicate the degree of uncertainty in the estimates. Estimates are comprised of various elements and
the detail typically increases as project planning progresses.
Class 4 or 5 estimates mean that the projects are in the early planning stages where the scope of work is still
being defined and feasibility studies are being carried out. Class 5 estimates have an expected accuracy range of
-20 to +100 per cent; this wide range narrows over time. Class 2 estimates, meanwhile, represent projects that are
in the contracting stage with some activities already being executed. These have a higher degree of accuracy of
-5 to +20 per cent.
In the last five years, over 90 per cent of projects reported in the Decommissioning Insight have been Class 4 or 5
estimates, with forecasts being refined year-on-year as the project scopes are better defined. Logging carried out
to determine a well stock’s condition, for example, may change the assumed duration of well P&A, or engineering
studies might change the planned method for removing a platform.
5.2 Cost Reduction Targets

In June 2017, the OGA estimated that it would cost around £59.7 billion to decommission all current and proposed
future offshore facilities, pipelines, wells and onshore terminals in the UK16. This forecast was derived by applying
a probabilistic cost estimation methodology to operators’ 2016/2017 Asset Stewardship Survey data. It is the
mid-point in a range from £44.5 billion to £82.7 billion (2016 money), which reflects the high level of uncertainty
in Class 4 and Class 5 projects used in the forecast.
The OGA has set a target, working with industry, to reduce decommissioning costs by 35 per cent to £39 billion, as
set out in its Decommissioning Strategy17. Progress is already being made in a number of areas, as outlined in the
following sections, while maintaining safety and environmental standards.
5.3 Historical Comparison of Forecasts

Accounting for 2 per cent of total UKCS expenditure in 2010, the decommissioning market is expected to grow to
11 per cent (£1.8 billion) this year.
Overall, decommissioning expenditure in the basin is forecast at £17 billion from 2017 to 2025, compared with
the £16.4 billion forecast over the same period in the 2016 Decommissioning Insight18. This increase is due to
greater survey coverage, resulting in the inclusion of new projects, rather than increased cost estimates for
existing projects.
16
T he OGA’s UKCS Decommissioning 2017 Cost Estimate Report is available at
www.ogauthority.co.uk/media/3815/ukcs-decommissioning-cost-report-2.pdf
17
See the OGA’s Decommissioning Strategy at
www.ogauthority.co.uk/media/1020/oga_decomm_strategy.pdf
18
The nine-year time period 2017 to 2025 is the timeframe included in the OGA’s Asset Stewardship Survey whereas
historically the Decommissioning Insight has covered a ten-year timeframe.
30
Figure 12 shows how cumulative expenditure estimates of decommissioning have varied over the last five years.
As recently as 2013, the ten-year forecast was £10.8 billion due to fewer projects with cost estimates available and
forecasts were rising by up to 30 per cent per year from 2013-15. Although the outlook is ever-changing, there has
been a relatively consistent trend since 2015. Some of the drivers behind the anticipated growth in expenditure
since 2013 include:
• More decommissioning activity as the UKCS matures – as the ten-year window moves forward each year,
decommissioning activity grows in line with the UKCS’ maturity.
• The change in economic environment – the current lower oil price environment has encouraged companies
to develop more robust estimates for decommissioning. In 2013, the UKCS was in a phase of growing capital
investment and operators were more focused on where they could invest in new developments. For this
reason, decommissioning expenditure and activity forecasts tended to tail off in the second half of the ten-year
outlook. Now companies are planning further ahead for decommissioning as a key part of their overall business
expenditure.
• Cost estimates becoming more detailed – as any decommissioning activity draws closer, cost estimates become
5
better defined and often increase as the scope becomes clearer.
Figure 12: Historical Comparison of Cumulative Forecast Expenditure
25
2013 Survey 2014 Survey 2015 Survey 2016 Survey 2017 Survey
Cumulative Expenditure (£ Billion - 2016 Money)
20
15
10
0
2013 2015 2017 2019 2021 2023 2025
31
5.4 Regional Breakdown

Forty-six per cent (£7.9 billion) of UKCS decommissioning expenditure from 2017 to 2025 is concentrated in
the central North Sea, 35 per cent (£6 billion) in the northern North Sea and west of Shetland, and 19 per cent
(£3.2 billion) in the southern North Sea and Irish Sea.
The higher proportion of expenditure in the central and northern North Sea regions reflects the size and degree
of complexity of projects in these regions where sea conditions are more challenging due to deeper water. While
the number of platforms to be removed is greater in the southern North Sea and Irish Sea, these are typically much
smaller installations that are simpler and therefore cheaper to decommission.
Figure 13: Regional Breakdown of Decommissioning Expenditure

Irish Sea
19%
Central North Sea

46%
Northern North Sea and

West of Shetland
35%
5.5 Expenditure by Decommissioning Component

Costs are estimated according to the different components of decommissioning as defined in the Work Breakdown
Structure (see Figure 14 opposite).
The largest category of expenditure from 2017 to 2025 is well P&A at 49 per cent (£8.3 billion), compared to
47 per cent in the Decommissioning Insight 2016. This is due to an increase in the number of wells and does not
reflect higher forecast unit costs, which have fallen for all well types and regions in the UKCS as outlined in
section 5.7.
The removal of topsides and substructures accounts for 15 per cent (£2.6 billion) or 21 per cent (£3.5 billion) when
the associated preparatory work for removal is also considered.
32
Figure 14: Decommissioning Expenditure Broken Down by Activity, 2017 to 2025
Onshore disposal,
Subsea and pipeline remediation and
decommissioning monitoring
Platform removals • Pipeline flushing • Onshore disposal,
• Offshore lifting • Subsea operations remediation and
operations monitoring
• Vessel, sea-fastening, • Field debris clearance
transportation and
• Monitoring programme
Topside preparation load-in
• Cleaning and flushing
of hydrocarbons
• Offshore construction
2%
• Separation of
processing equipment 12%
15%
Estimated Cost - £17 Billion

Well P&A
• Wells project 6%
management services
• Specialist wells
services
• Rig upgrades
49% 5
Project management
and facility running
costs
• Offshore operations
• Project management
services
• Preparation of 16%
decommissioning
programme
3,000 Project management and facility running costs Well P&A

Topsides preparation Platform removals
Subsea and pipeline decommissioning Onshore disposal, remediation and monitoring
2,500 2016 Actuals
Expenditure (£ Billion - 2016 Money)
2,000
1,500
1,000
500
0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
33
5.6 Operator Project Management and Facility Running Costs

Operators forecast that a significant proportion of overall decommissioning expenditure will be spent on project
management and facility running costs (£2.7 billion, 16 per cent) from 2017 to 2025. This includes preparatory
work for decommissioning such as regulatory compliance and feasibility studies, as well as running installations
after CoP until they are fully decommissioned. The proportion of expenditure in this area has declined from
19 per cent in last year's report as the industry strives to reduce decommissioning costs.
For projects that involve platforms for removal, the costs in the central and northern North Sea and west of
Shetland account for 26 per cent (£2 billion) of expenditure compared to just 7 per cent (£216 million) in the
southern North Sea and Irish Sea. Indeed, 92 per cent of project management and facility running costs in the
UKCS are concentrated in the central and northern North Sea and west of Shetland, a reflection of the size and
complexity of these typically manned installations.
As more fields approach the end of their productive lives and operators learn from the experience of recent
decommissioning projects, there is an increasing drive towards streamlining the regulatory process and schedule
of activities to enable a smoother and more cost-effective transition into decommissioning. Industry is also focused
on delivering efficiency gains and cost reductions in the decommissioning process itself.
For assets that were included in the survey last year, operators expect to spend close to £440 million less than
was forecast. Measures being taken to safely reduce the cost of running facilities in late-life and once they cease
production include:
• Concurrent late-life production and decommissioning activities – carrying out decommissioning activities while
production continues, for example P&A on redundant wells, means the manpower on an asset can be lowered
earlier and the decommissioning project’s overall duration can be reduced. Some operators on the UKCS are
aiming to carry out up to 75 per cent of their well P&A activity before production ceases.
• Tailored maintenance strategy for late-life assets – as CoP approaches, maintenance requirements
change. An optimised strategy will help avoid maintenance on equipment that is no longer required or will
shortly become redundant. This has the potential to deliver significant savings in decommissioning, from
20 to 25 per cent in the southern North Sea and Irish Sea to up to 50 per cent in the central and northern
North Sea.
• Fixing the date of CoP – this gives a much clearer picture of maintenance requirements in late-life and allows
activities to be scheduled with decommissioning in mind. However, there are several challenges, notably whether
the planned date aligns with the regulatory approvals process and the industry’s focus on maximising recovery.
It is acknowledged that this approach requires a change in mindset which several operators are looking to adopt.
• New operating models for fields in late-life and decommissioning – the decision to hand over operatorship and
the right time to do so is asset specific, but also depends on market capabilities and pressures. Operators must
find the right balance between maintaining asset-specific knowledge and ensuring decommissioning expertise.
34
5.7 Well Plugging and Abandonment Costs
The cost of well P&A depends on water depth, weather, reservoir type, age, condition and, in some cases, measures
to prevent well collapse caused by depressurisation. The costs included in this report vary significantly in their
degree of maturity. While some are informed by previous experience and data, other estimates are at an earlier
stage of development and are inherently more uncertain.
Oil & Gas UK has carried out analysis to look at the average and range in unit cost estimates for well P&A over
the past five survey years. As shown in Figures 15 and 16 overleaf, the range is wide, particularly for subsea wells,
although the average cost is relatively stable. Wells at the low-cost end are typically simple rig-less P&As, using
wireline, pumping or crane jacks, where the reservoir may already have been isolated. Wells at the top end are
more complex, rig-based P&As, with challenging access and cementing. They may require retrieval of tubing and
casing, milling, and cement repairs.
Since forecasts were made in 2016, the average unit cost for well P&A has fallen across all well types and regions
of the UKCS. This reflects greater industry experience in this area as well as lower rig rates, which have fallen 30
per cent for jack-up rigs and 37 per cent for semi-submersible rigs over the past year. 5
35
Figure 15: Historical Variation in Well Plugging and Abandonment Cost Forecasts
in the Central and Northern North Sea and West of Shetland
50
Average Forecast Cost Platform Wells
45
Estimated Cost per Well (£ Million - 2016 Money)
Average Forecast Cost Suspended Exploration and Appraisal Wells

40
Average Forecast Cost Subsea Development Wells
35
30
25
20
15
10
0
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Platform Suspended Exploration and Subsea Development
Appraisal
Well P&A 2016 Survey Average 2017 Survey Average

Platform wells £5.3 million £4.9 million
Subsea development wells £10.7 million £10.1 million
Suspended exploration and appraisal wells £6.8 million £6.9 million
Figure 16: Historical Variation in Well Plugging and Abandonment Cost Forecasts
in the Southern North Sea and Irish Sea
25
Average Forecast Cost Platform Wells
Average Forecast Cost Suspended Exploration and Appraisal Wells
Estimated Cost per Well (£ Million - 2016 Money)
Average Forecast Cost Subsea Development Wells

20
15
10
0
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Platform Suspended Exploration and Subsea Development
Appraisal Source: Oil & Gas UK, Asset Stewardship Survey
Well P&A 2016 Survey Average 2017 Survey Average

Platform wells £2.9 million £2.8 million
Subsea development wells £8 million £7.8 million
Suspended exploration and appraisal wells £7.3 million £3.4 million
36
Approaches to Cost Reduction in Well P&A
As the largest category of decommissioning expenditure, well P&A is an important area to drive cost reductions and
efficiency improvements. Oil & Gas UK expects costs to continue to fall as industry experience grows. Operators
have reported the following measures being explored to reduce costs:
• A campaign approach – carrying out multiple well P&As in a campaign allows mobilisation costs to be spread
across several wells and incremental improvements in technique can be cascaded across the campaign. Some
operators have reported time savings per well of more than one-third over the course of large multi-platform
campaigns spanning several years.
• Adoption of a risk-based approach – analysing the risk to develop a scope of work that is appropriate on a
well-by-well basis has significantly reduced costs for some operators. Each well has a different risk profile and
the scope of work is developed accordingly.
• Cross-operator collaboration – by vessel sharing and adding wells to the campaigns of other operators in the
area, there are opportunities for cross-operator campaigns.
5
• Continued investment in technology – technological advancements continue to drive down costs in well P&A.
The newly formed Oil & Gas Technology Centre (OGTC) put out a call offering match-funding for concepts and
ideas that could drive transformation in well P&A. Four new technologies are currently being explored, focused
on three key themes: new barriers – placement and materials; verification of permanent barriers; and optimising
P&A scope.
• Optimising the activity schedule – for platform wells this could mean carrying out P&A in an order that reduces
the distance the drilling derrick must travel across the platform between wells and leaves the highest performing
wells until last.
• Alternatives to the existing drilling derrick – considering rig-less methods, or removal of the topsides so that a
workover rig can be used.
• Early removal of subsea infrastructure – reducing the amount of subsea infrastructure around the well-site
prior to carrying out subsea well P&A reduces the time spent manoeuvring around complex subsea
infrastructure landscapes.
• Assessing the well condition – using a light well intervention vessel to set plugs and carry out logging on the
subsea well stock to assess their condition prior to beginning the campaign.
The approach ultimately adopted to carry out well P&A depends on various factors, with no single approach
being appropriate for every situation. Operators are learning from each other through proactive networking and
sharing lessons learnt through conferences and forums. This area continues to be one of significant development
and progress.
37
5.8 Platform Removal Costs

A platform’s weight has little effect on some of the standard overheads associated with removal, including
removal preparation, vessel mobilisation, sea-fastening, transportation and load-in onshore. The smallest
and lightest structures, commonly found in the southern North Sea and Irish Sea, can therefore have a much
larger cost per tonne for topside removal. The overall cost per platform, meanwhile, is significantly lower in
these regions.
Looking at the graphs below and overleaf, there is a wide range in forecast removal costs per tonne across the
UKCS. Platforms at the top of the range are the smallest, weighing less than 500 tonnes. In the central and northern
North Sea, most platforms are expected to fall below £6,000 per tonne for topside removal and £8,000 per tonne
for substructure removal, with just a few platforms at the high-end of the cost scale. There are a variety of factors
driving the removal cost for the large, complex platforms found in these regions, including weather constraints,
removal method, or the ease with which removal activity can be carried out as part of a campaign.
Figure 17: Historical Variation in the Removal Costs per Tonne for Topsides and Substructures
in the Central North Sea and Northern North Sea and West of Shetland
14,000
Average Forecast Topside Removal Cost per Tonne
Average Forecast Substructure Removal Cost per Tonne
12,000
Estimated Cost per Tonne (£ - 2016 Money)
10,000
8,000
6,000
4,000
2,000
0
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Topside Substructure
Removal Cost per Tonne 2016 Survey Average 2017 Survey Average
Topsides £3,600 £2,800
Substructures £4,300 £4,700
38
Figure 18: Historical Variation in the Removal Cost per Tonne for Topsides and Substructures
in the Southern North Sea and Irish Sea
18,000
16,000
Estimated Cost per Tonne (£ - 2016 Money)
14,000
12,000
10,000
8,000
6,000
4,000
5
2,000
0
2013 2014 2015 2016 2017
Topside and Substructure
Removal Cost per Tonne 2016 Survey Average 2017 Survey Average
Topside and Substructure £3,900 £3,600
Approaches to Cost Reduction

The market for heavy-lift vessels required for topside and substructure removals is well-established, particularly
for platforms that can be removed by single-lift using smaller barges. As the market matures, vessels such as
the Pioneering Spirit are being built to lift heavier loads19 and the supply chain is increasingly offering integrated
packages that combine different decommissioning activities into a single contract, often through consortiums of
several companies that individually offer very different services.
With topside and substructure removal and the associated preparatory work representing 21 per cent of total
decommissioning expenditure on the UKCS to 2025, efficiency gains in this area will have a substantial impact in
lowering the overall cost of decommissioning.
19
See www.allseas.com/equipment/pioneering-spirit
39
Operators have indicated that they are looking to reduce the costs of removal by:
• Consolidating decommissioning activity as part of a longer-term programme – aggregating the removal of

several platforms in a single campaign spreads mobilisation costs across assets. This may involve leaving some
assets in place until their removal aligns with activity for other assets.
• Allowing the market to drive the removal method – rather than dictating a particular approach, operators are
increasingly looking to the supply chain to specify the optimum solution, and are open to integrated packages
of services and contracts.
• Being flexible about when activity takes place – this allows the removal contractor to carry out the activity
when the vessel is available.
• Exploring the potential for cross-operator campaigns – this is already proving a valuable approach in the
southern North Sea where platforms are smaller and the cost for removal per tonne is therefore higher.
40
6. Glossary
AACE Association for the Advancement of Cost Engineering
Barge-launched jackets weigh between 5,000 and 25,000 tonnes.
They are yard fabricated and transported horizontally to the field on a
Barge-launched jacket transportation barge, then launched from the barge over rocker beams
and upended through controlled flooding. Final positioning may require
crane assistance.
Pipe installed in the wellbore to retain the borehole dimension and seal off
Casing hydrocarbon and water-bearing formations. Casing is usually cemented in
place to ensure the pipe remains in place.
Christmas tree The valves and fittings assembled at the top of a completed well.
CNS Central North Sea
A long continuous length of pipe wound on a spool. The pipe is straightened
Coiled tubing prior to pushing into a wellbore and rewound to coil the pipe back onto
the transport and storage spool.
Used to compare options, examine differences and identify the ‘most
preferred’ option in the development of decommissioning programmes for:
a) All installations for which derogation is sought under OSPAR Decision
Comparative assessment
98/3
6
b) All pipelines being decommissioned under the Petroleum Act 1998
c) All drill cuttings piles that are not screened-out at Stage 1 of OSPAR
CoP Cessation of production
A large diameter pipe extending upwards from or beneath the seafloor to
the top of the well on the platform. The purpose of the conductor is to act
Conductor
as a guide for drilling the well and a protective barrier from the elements
for the well casings and tubing during the life of the well.
Drilling derrick A structure used to support crown blocks and drilling string of a rig.
Leaving infrastructure in place and carrying out appropriate work to ensure
that there is minimal risk to other sea users or the marine environment.
Decommissioning in situ
This could apply to any installed facilities on the seabed, such as pipelines,
manifolds, pipeline crossings and the footings of larger jackets.
Energie Beheer Nederland is a company that invests in the exploration,
EBN
extraction and storage of gas and oil on behalf of the Dutch State.
Flexible flowlines usually transport hydrocarbons between subsea
infrastructure and the host platform or vessel. They are manufactured
Flexible flowlines
from composite layers of steel wire and polymer sheathing that provide
protection and flexibility to the flowline.
FPSO Floating, production, storage and offloading vessel.
The addition of wells in a field that decreases average well spacing
Infill drilling to accelerate expected recovery and increase estimated recovery in
heterogeneous reservoirs.
Fixed rig installed at the well location, usually self-contained, with steel or
Integral rig
concrete legs anchored to the seafloor.
Well servicing operations conducted within a completed wellbore to
Intervention
restore or improve production or injection.
41
Self-contained combination drilling rig and barge with legs that can be
Jack-up rig
raised and lowered independently onto the seafloor.
A short segment of flexible pipe with a connector half at either end. A
Jumper jumper is commonly used to connect flowlines and/or subsea facilities
together.
These structures weigh less than 10,000 tonnes and are yard-fabricated
Lift-installed jackets before being transported on a barge to the field. Once at the field, the
jacket is lifted from the barge into position using a suitable crane vessel.
To continuously measure formation properties with electrically powered
Logging
instruments to make decisions about drilling and production operations.
‘Making safe’ of facilities includes cleaning, freeing equipment of
hydrocarbons, disconnection and physical isolation, and waste
Making safe management. ‘Making safe’ of pipelines involves depressurising them and
removing any hydrocarbons. Then the pipelines are cleaned and purged,
with the cleaning programme based on the specific needs of the system.
A manifold in the context of oil and gas production is a pipe to which wells
are connected in order to collect, co-mingle and direct fluid flow from
Manifold more than one well. Such an installation can be on a platform or on the
seabed for accumulating several subsea wells. Manifolds can be used for
the distribution of fluids for injection into a series of wells.
Mattresses are often used to provide protection, for stabilisation, and
Mattresses as crossover support for pipelines. These comprise flexible blocks linked
with rope or wire, or concrete forms or grout bags filled with cement.
MER UK Maximising Economic Recovery from the UKCS
A mill or similar downhole tool is used to remove casing in the well where
a barrier needs to be installed in case of pressure or potential movement
Milling
of hydrocarbons behind the casing. The objective is to prevent fluids
flowing into another formation or to the surface.
Rig designed in modules that can be lifted onto a platform by crane to be
Modular rig
erected on site.
NNS Northern North Sea
NOGEPA The Netherlands Oil and Gas Exploration and Production Association
NUI Normally Unmanned Installation
OGA Oil and Gas Authority
Over-trawl surveys make sure the seabed is safe for normal fishing
Over-trawl surveys
activities to resume.
Reverse installation whereby the topsides modules are lifted separately
Piece-large onto a transportation barge or the deck of the crane vessel before being
taken onshore.
The piece-small method involves dismantling the topside and using
Piece-small onshore demolition techniques to produce small, manageable pieces that
can be transported onshore.
Pig A device used to clean pipelines.
A solid or gel made out of a variety of materials designed to stop up a hole
Plug
or aperture, to fill a gap, or to act as a wedge.
42
Reverse installation Same as piece-large
Rigid pipelines are manufactured from carbon steel or a high performance
steel alloy, with additional coatings providing corrosion protection,
Rigid pipelines
stabilisation or, in some cases, insulation. Rigid pipelines transport
hydrocarbons between subsea infrastructure and platforms and to shore.
The portion of a pipeline extending from the seafloor to the surface is
termed a riser. The function of a riser is to provide conduit(s) to move
Risers
produced fluids and/or injection fluids between the seafloor equipment
and the production host.
Small, unmanned platforms consisting of minimal facilities (wells,
manifolds, and perhaps minimal separation and or testing facilities).
Satellite installations These installations are designed to operate in conjunction with a host
fixed production platform to provide further processing and onward
transportation of fluids.
The securing of cargo to a vessel so that movement during transportation
Sea-fastening
does not cause damage.
These steel jacket structures weigh more than 12,000 tonnes and are
Self-floaters designed with two large diameter legs for buoyancy during installation.
The single-lift method involves removing the topside in one piece
Single-lift and may involve extra engineering work to reinforce the topside in
6
preparation for removal.
Used for deepwater drilling. They have ballasted columns to remain on
Semi-submersible rig location assisted by either mooring lines or dynamic positioning systems.
Used for exploration and development drilling.
These structures usually weigh under 2,000 tonnes and are typically
Shallow-water jackets deployed in water depths of 55 metres or less. They include smaller
launched and lift-installed jackets, as well as minimum facilities platforms.
SNS Southern North Sea
Short segment of rigid pipe with a connector half at either end. A spool
is commonly used to connect flowlines and/or subsea facilities together,
Spool e.g. a subsea tree to a subsea manifold. On platforms, spools are used
to connect pre-installed piping where final connection is performed
offshore.
A safety device installed in the upper wellbore to isolate producing fluids
Subsea isolation valves
in the event of an emergency.
Subsea tie-backs usually connect small reservoir accumulations,
Subsea tie-back developed using subsea trees and manifolds, back to a host platform for
onward processing and or transportation.
Trunklines are defined as pipelines with a diameter greater than 14 inches
Trunkline
and a length above 18 kilometres.
Usually referred to as production (or injection) tubing. This is a pipe
Tubing inserted in the well to carry and contain the production (or injection) from
the reservoir to the surface.
UKCS UK Continental Shelf
Umbilical Utility support pipes
43
The removal and decontamination of scale build-up that deposits in the

Well-scale decontamination
tubing of a well during production of reservoir fluids.
Well P&A Well plugging and abandonment
The wellhead is the termination point where the casing strings in the well
Wellhead
are supported and provide pressure containment.
A form of well intervention that uses an electrical cable to lower tools into
Wireline
the borehole and to transmit data to the surface.
A mobile self-propelled rig used to perform one or more remedial
Workover rig operations, such as deepening, plugging back, pulling and resetting liners.
WoS West of Shetland
44
45
oilandgasuk.co.uk @oilandgasuk
[email protected] Oil & Gas UK
ISBN 1 903 004 96 9

© 2017 The UK Oil and Gas Industry Association Limited, trading as Oil & Gas UK

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DECOMMISSIONING INSIGHT 2017

DECOMMISSIONING INSIGHT 2017

• Across the four regions:

UK Continental Shelf in Focus

Forecast Decommissioning Activity Across the North Sea, 2017 to 2025

Central and Northern

Central and Northern

production efficiency, field interdependencies and brownfield

where this has–happened.

3.2 A Growing Market

4.2 Well Plugging and Abandonment

Figure 1: Well P&A Forecast Across the North Sea

Figure 2: Well P&A Forecast in the Central North Sea

Subsea Development Wells

Number of Wells Proportion that are Platform Wells Forecast Expenditure

UK Northern North Sea and West of Shetland

Number of Wells Proportion that are Platform Wells Forecast Expenditure

100 Suspended Exploration and Appraisal Wells

Number of Wells Proportion that are Platform Wells Forecast Expenditure

Danish Continental Shelf

Figure 5: Well P&A Forecast on the Danish Continental Shelf

Number of Wells Proportion that are Platform Wells

Norwegian Continental Shelf

Figure 6: Well P&A Forecast on the Norwegian Continental Shelf

Number of Wells Proportion that are Platform Wells

Figure 7: Well P&A Forecast on the Dutch Continental Shelf

Number of Wells Proportion that are Platform Wells

Danish Continental Shelf Norwegian Continental Shelf

Danish Continental Shelf Norwegian Continental Shelf

Making Safe and Topside Preparation

Figure 9: Forecast Topside and Substructure Removal Across the

Norwegian Danish Dutch

UK Central North Sea

UK Southern North Sea and Irish Sea

Norwegian Continental Shelf

Danish Continental Shelf

Dutch Continental Shelf

4.4 Subsea Infrastructure

Figure 10: Forecast Pipeline Decommissioning, 2017 to 2025

Trunkline (km) Other Pipelines (km) Umbilicals (km) n

Mattresses and Other Subsea Infrastructure

Other Subsea Infrastructure

4.5 Onshore Recycling and Final Disposal

4.6 Site Remediation and Long-Term Monitoring

Looking nearer term, operators forecast that £17 billion

5.1 Maturity of Estimates

5.2 Cost Reduction Targets

5.3 Historical Comparison of Forecasts

Figure 12: Historical Comparison of Cumulative Forecast Expenditure

Source: Oil & Gas UK, Asset Stewardship Survey

5.4 Regional Breakdown

Figure 13: Regional Breakdown of Decommissioning Expenditure

Southern North Sea and

Central North Sea

Northern North Sea and

Source: Oil & Gas UK, Asset Stewardship Survey

5.5 Expenditure by Decommissioning Component

Estimated Cost - £17 Billion

3,000 Project management and facility running costs Well P&A

5.6 Operator Project Management and Facility Running Costs

• Consolidating decommissioning activity as part of a longer-term programme – aggregating the removal of