THE cost of decommissioning North Sea oil and gas facilities could total up to £83 billion it has been estimated.
The figure comes from a regulatory report that highlights the potential for the UK to become a world leader in decommissioning but which may heighten fears about the implications for taxpayers.
The report from the Oil and Gas Authority represents the latest attempt to estimate the bill the industry will face for clearing up in the North Sea as hundreds of fields reach the end of their lives in coming decades.
The authority has calculated there are over 250 fixed installations, over 250 subsea production systems, over 3,000 pipelines and approximately 5,000 wells, all of which require to be decommissioned.
Noting the wide range of uncertainties involved it said the associated decommissioning costs could total from £44.5bn to £82.7bn.
It reckons the most likely estimate is £59.7bn.
The figure is broadly in line with the £53bn estimate produced by Wood Mackenzie in January.
Edinburgh-based Wood Mackenzie said then that the UK Government would be expected to pick up 45 per cent, or £24bn, of the bill.
Revenues from North Sea oil have plunged amid the downturn triggered by the sharp fall in oil prices since 2014.
Led by Andy Samuel, the OGA reckons the industry could cut the expected cost of decommissioning by 35 per cent, to £39bn.
This will require firms to develop new ways of working and to collaborate more.
The expertise developed should be exportable.
The OGA said: “The transformational scenario will require industry to be constructively disruptive, doing things differently in addition to incremental efficiencies. This will result in a world leading decommissioning industry in the UK.”
Decommissioning hit the headlines earlier this month when Shell shipped the first of four platforms used on the giant Brent field to Hartlepool.
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