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British report eyes lower cost for North Sea decommissioning

The process to tear down parts of the legacy infrastructure that supported the Brent oil field started in May.

By Daniel J. Graeber
British report eyes lower cost for North Sea decommissioning
A report on the costs tied to tearing down legacy operations in the North Sea says a change in mindset could help drive down the price tag. File photo by Maryam Rahmanian/UPI | License Photo

June 29 (UPI) -- A report published Thursday on the capital needed to take down British oil and gas infrastructure said major changes are needed to drive down costs.

The Oil and Gas Authority said Thursday it would cost about $77.3 billion to decommission offshore infrastructure. With the right cost-cutting plans in place, that figure could move lower by about 35 percent.

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"To achieve this target there will be a need for significant change in the way decommissioning is approached and behavioral change will be a critical component," OGA Operations Director Gunther Newcombe said in a statement.

The cost of tearing down North Sea oil rigs would be covered by energy companies and British taxpayers. The report said that just as British oil and gas fields have proven their value over the past 40 years, there should be a collective push to minimize costs.

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The report said several other industries have found innovative solutions on technology and pricing and "oil and gas decommissioning should be no different."

Terri King, the president of the British subsidiary of Conoco Philips and a member of the decommissioning task force, said cost estimates serve as effective benchmarks for the industry. Some of its own costs to take down a well are down by almost 50 percent.

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"Our focus now includes transformational technology that will help us materially change the way we work," he said.

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Smaller rigs have been dismantled as some of the oil and gas fields in the British waters of the North Sea reach the end of the production lifespan. In May, Royal Dutch Shell started the process to take down legacy operations at the Bravo production platform in the North Sea, which supports the Brent oil field.

Operations at the Delta platform ended in 2011 and the Alpha and Bravo platforms were shut down in 2014. Field maturation has forced the idling of the production platforms and Shell is in the midst of a multimillion dollar plan to take them down.

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