THE decommissioning business established last week by oil services tycoon Alasdair Locke has appointed Phil Milton as its chief executive following the acquisition of his business.

Well-Safe Solutions said the acquisition of Intervention Project Management (IPM) and appointment of Mr Milton had put it “firmly on-track to establishing [its] authority and credibility”.

IPM was founded by Mr Wilton in 2007 and specialises in plug and abandonment (P&A) services in the North Sea, West Coast of Africa and Australia.

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Well-Safe was established to capitalise on the growing demand for decommissioning contracts in the North Sea. Its founders plan to raise £200 million in investment, and have a target of creating 400 jobs within the first three years of operation.

Since the oil price began to tumble in 2014 a number of groups have brought forward plans to abandon old fields given the cost of extracting remaining reserves.

Subsequently, spending on decommissioning in the North Sea is expected to double to £1.7 billion this year with P&A services accounting for about 60 per cent of decommissioning costs.

It is estimated that around 5,000 wells in the North Sea require decommissioning over the coming decades.

The launch of Well-Safe Solutions marked the return to the North Sea for Mr Locke, whose Abbot Group services business was sold for £906m in 2008.

Well-Safe Solutions will offer operators a complete P&A service from front-end engineering and design to project execution, which it says will allow companies to meet the challenges and regulatory issues around decommissioning.

It aims to take advantage of what Mr Patterson said was a fragmented market by becoming the focal point for operators, handling all aspects of planning, logistics and execution though one contract.

The business has been funded by the state-owned Scottish Investment Bank. Its founders have also invested in the business but have not disclosed any further details.

Well-Safe will use funds to buy the assets required to carry out well abandonment work, including a semi-submersible rig, jack-up rig and light-weight intervention vessel.

Mr Patterson said the acquisition of IPM provided the company with the foundation upon which to build this P&A-focused business. “More importantly, with the appointment of Phil Milton to head up our wealth of P&A expertise and experience, we are firmly on-track to establishing our authority and credibility in the market,” he added.

IPM provides independent engineering, project management and consultancy services to the global oil and gas industry.

It initially focused on supplying high calibre well engineering personnel to operators and the service sector. The self-funded start-up grew to become a respected provider of well engineering support and project management.

Mr Milton said: “The shift towards prioritising decommissioning activity, along with the number of shut-in wells, more incentives and current lower costs, makes P&A activity much more attractive. It’s the right time for Well-Safe to enter the market with a very compelling proposition that will deliver the complete package of collaboration, efficiency, safety and savings.

Corporate finance advisers to the energy sector, Simmons & Co, acted for Well-Safe. Its managing director Mike Beveridge noted that the timing of Well-Safe’s entrance to the market could provide it with a platform to become an important new employer in the North East.

“There’s a huge well stock in the North Sea that needs this know-how and experience to decommission wells safely and efficiently,” he said. “I would expect Well-Safe to take this model to other well decommissioning programmes worldwide – further strengthening the UK’s position as a proving ground for new ideas and business practices which can be adopted elsewhere around the globe.”