The estimated cost of decommissioning the remaining oil and gas infrastructure on the UK Continental Shelf (UKCS) is continuing to reduce, according to a new analysis by the Oil and Gas Authority (OGA).
The OGA says its latest report “shows strong progress towards the shared objective of industry and government to reduce decommissioning costs by at least 35%”.
The findings – which will be published in the UKCS Decommissioning Cost Estimate 2019 next month – detail how estimated decommissioning costs have now been reduced to £51 billion, compared to £59.7 billion (estimated in 2017) – despite including more assets and infrastructure than in the 2017 inventory.
When compared directly to the inventory identified in 2017, the estimated costs have been reduced by 17% to £49 billion, says the OGA.
The reductions has been primarily driven by improvements in planning and execution practices.
“It's really good news that the industry is now half way towards the collective target after just two years,” says Nils Cohrs, OGA’s head of decommissioning.
“Better capability and experience is providing greater certainty of actual UK decommissioning costs with several operators already achieving significant cost savings through adopting different approaches, learning and sharing with others, and challenging previous norms.
“The supply chain is also bringing new solutions to the market in terms of pricing structures, business models, and technology.”