North Sea industries could adapt and thrive during oil field maturation

Up to $100 billion in spending is possible through 2040 as operators start taking down the aging infrastructure in the North Sea.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  Jan. 15, 2018 at 8:45 AM
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Jan. 15 (UPI) -- Tearing down the infrastructure from aging North Sea oil and gas fields could generate a stream of revenue for the industry as a whole, a consultant group said.

Royal Dutch Shell started the process of taking down legacy operations at the Bravo production platform in the North Sea last year. The Bravo platform supported Brent oil field development, but was closed down in 2014.

Field maturation has forced the idling of several production platforms and Shell is in the midst of a multi-million-dollar plan to take them down. The British government estimated it could cost about $77.3 billion to decommission offshore infrastructure.

Energy consultancy Westwood Group said up to $100 billion in spending on decommissioning is expected for Western Europe over the next 20 years. That represents a significant source of revenue for the industries like port operators that can handle the challenge for a maturing North Sea basin.

At least 4 million tons of infrastructure will be pulled down from Western European waters by 2040, taken onshore and dismantled and Westwood said it's not reasonable to expect what's already on hand to take it all apart.

Ports from Scotland south, therefore, could find ways to dismantle or recycle the tonnage at a profit.

"The supply chain stands to benefit from meaningful revenue streams and is gearing-up accordingly," the report read. "However, in a volatile and weakened commodity price environment, the key challenge is for the supply chain to present efficient, cost effective solutions to the exploration and production operators, while still being able to achieve reasonable profitability."

Some of the smaller rigs have already 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.

With decommissioning of some of the aging infrastructure in the North Sea under way, a trade group is making plans for what to do with all the paperwork. Trade group Oil & Gas U.K. said last week the paperwork alone could present logistical problems as the industry decides what to do with the "thousands of boxes of physical records."

Shell started a 60-day consultation period for its plans to decommission three of its Brent production platforms in the North Sea in early February 2017, sparking concerns from environmental groups. Lang Banks, the Scottish director of environmental group WWF, said that, by his read, the outline from Shell lacked "qualitative judgments and opinions" from experts, including some of the engineers at the Dutch supermajor.

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