THE COST to the UK and Norway of scrapping oil platforms has risen by £500 million in a year.

A new report by Oil and Gas reveals that decommissioning spending in the UK and Norwegian Continental Shelf has risen by 31 percent to £2.1 billion in 2015. It now represents five percent of total industry spending, compared with two per cent in 2010.

The analysis also shows firms expect to spend £17.6 billion on the UK Contintental Shelf decommissioning by 2025, compared with a previous estimate of £16.9 billion from 2015 to 2024. Half of that spending will be in the central North Sea.

Read more: Beyond Brexit - Scottish passport plan could allow Scots to keep working and living in Europe

The report come as as the UK Government was warned by the SNP that it must take "decisive action" to help the oil and gas industry as a new report highlighted a lack of leadership and a closing "window of opportunity" to effect change.

An analysis by consultants PwC revealed that Scotland's oil and gas industry may have as little as two years to fix fundamental problems before sliding into “a rapid and premature decline”.

HeraldScotland: A CGI of the Brent oil platforms off the Shetlands

The analysis said the North Sea, which supports 350,000 jobs across the UK, had the potential to carry on for decades, with as much as 30 billion barrels of oil still remaining.

But in a stark warning, it also said the industry had “reached a fork in the road” and “the window of opportunity to effect change is getting smaller all the time”.

The Oil and Gas report also shows that over the next decade, there are more than 100 platforms forecast for complete or partial removal from both the UK and Norwegian continental shelves. While 52 new projects appear for the first time in this year’s report, most of these have been a long time in the planning.

Read more: Beyond Brexit - Scottish passport plan could allow Scots to keep working and living in Europe

The report, the first survey of both the UK and Norwegian decommissioning plans, revealed that over 1,800 wells are scheduled to be plugged and abandoned and around 4600 miles of pipeline is forecast to be decommissioned.

Mike Tholen, Oil & Gas UK’s upstream policy director said: “There could still be up to 20 billion barrels of oil and gas to recover from the UK Continental Shelf.


"If the UK is to continue to gain the full economic benefit from its oil and gas resource, it is important that the industry continues to work with the OGA as well as with HM Treasury to attract fresh investment, avoid premature decommissioning, retain the critical infrastructure needed to access future reserves and ensure decommissioning is carried out in a timely and most cost-effective way."

PwC warned that the oil price is "unlikely" to return to 100 US dollars (£80) a barrel and is instead more likely to settle at between 60 dollars (£48) and 70 dollars (£56) a barrel in the next few years.

A report by the group found growing confidence in the industry with oil prices stabilising and supply and demand more balanced.

It said the "general consensus is that the North Sea does have a future" but that a number of "fundamental issues" need to be addressed in the next two years.

Read more: Beyond Brexit - Scottish passport plan could allow Scots to keep working and living in Europe

The report states: "The window of opportunity to effect change is getting smaller all the time. According to some respondents, the basin has some 24 months to turn around performance.

"Time is of the essence if a suite of solutions can be deployed to rescue the basin.

"Leadership is lacking - the basin needs new ideas - it needs disruption and change whilst recognising the benefit of the wisdom and experience that has gone before."

Progress in terms of tax changes and the creation of an Oil and Gas Authority was praised but "there is more still to do".

The SNP want the UK Government to use the Autumn Statement to outline more support for the industry.

Aberdeenshire East MSP Gillian Martin said: "Tory government ignorance of the needs of the North Sea industry is laid bare in this report.


"It makes clear that the oil and gas sector has the potential to develop but only if the UK Government provides the right support - which they have failed to do for decades.

"PwC has said that there is more than just the fall in the oil price to consider when looking at the industry's future - and it is clear that the UK Government's decades of mismanagement has left the oil and gas sector in this situation where it risks a 'rapid and premature decline' if action is not taken.

"This is why the Chancellor must listen to industry experts and take the decisive action necessary to help support the North Sea industry - which supports thousands of jobs across Scotland and the rest of the UK."

Dr Andy Samuel, chief executive of the Oil and Gas Authority, said: "Now is the time for everyone to demonstrate leadership to ensure we harness the expertise, imagination and tenacity that has built the UKCS (UK Continental Shelf) into one of the UK's greatest industrial success stories."

Read more: Beyond Brexit - Scottish passport plan could allow Scots to keep working and living in Europe

Scottish Labour economy spokeswoman Jackie Baillie claimed the Scottish Government "ignored the crisis in the oil and gas industry for months because it was politically embarrassing for them".


She said: "During the independence referendum Nicola Sturgeon personally promised a second oil boom and the reality demonstrates how important it is to our economy to remain part of the UK.

"Rather than brush the problems facing the industry under the carpet, the SNP government should commission an urgent review of the measures to protect jobs and skills such as the transition training fund.

"The Tory government also has a role to play here and should establish a public body to protect important assets at times of volatility in the oil price, look towards investment in decommissioning for when the time comes and promote the exporting of the skills that Scotland has to capture opportunities in the rest of the world."

A Treasury spokesman said: "The UK Government has provided more extensive support than any other government in response to falling oil prices.

"We have permanently zero-rated the petroleum revenue tax and halved the supplementary charge for the industry. The marginal rate of tax on mature fields has more than halved in the last two years.

"At a local level, we are funding surveys to boost new exploration and supporting cutting-edge research and development.

"We have also established the Oil and Gas Authority as an independent regulator so it can now act with greater speed and flexibility to drive investment, support jobs and further the UK's competitive edge."