15 June 2015
Decommissioning – a bittersweet positive?
Decommissioning has been singled out as a bittersweet positive in the latest Oil and Gas survey conducted by Aberdeen & Grampian Chamber of Commerce (AGCC) in partnership with law firm Bond Dickinson.
At a time of widespread low confidence in the UK Continental Shelf (UKCS), one area showing increases in activity is decommissioning with more than 80% of contractors involved in the sector seeing additional levels of activity in the last 12 months. Only one in four of these contractors (24%) expect the value of it to decrease in the next 12 months.
And Bond Dickinson, which has been involved in 25% of all decommissioning projects in the UKCS, says the survey findings confirmed its experience.
“Decommissioning is the bittersweet positive in the survey. Academics have been predicting an imminent spike in decommissioning for years but that spike is now well and truly upon us. Decommissioning is not driven by oil price or demand and could be very important in maintaining the value of activity in the North Sea,’’ said Uisdean Vass, oil and gas partner at Bond Dickinson.
The research comes shortly after Decom Offshore 2015, the flagship event organised by Decom North Sea (DNS) – the representative body for the offshore decommissioning industry. With decommissioning costs forecast to reach in excess of £50billion over the next 35 years, the event featured major operators and service companies giving an update on decommissioning plans.
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See the full findings of the 22nd AGCC Oil and Gas Survey here.