BUSINESS OUTLOOK 2020

DECOMMISSIONING INSIGHT
2021
NEW – OGUK's Interacti ve
Decommissioning Toolkit

1
Our vision is to ensure the
UK Continental Shelf becomes the
most attractive mature oil and gas
province in the world with which to
do business. The UK Oil and Gas Industry Association Limited (trading as OGUK) 2021
OGUK uses reasonable efforts to ensure that the materials and information contained in the report are current and accurate. OGUK offers the
materials and information in good faith and believes that the information is correct at the date of publication. The materials and information
Read all our industry reports at are supplied to you on the condition that you or any other person receiving them will make their own determination as to their suitability and
www.oguk.org.uk/publications appropriateness for any proposed purpose prior to their use. Neither OGUK nor any of its members assume liability for any use made thereof.
 DECOMMISSIONING INSIGHT 2021
1. Foreword 4
2. Key Findings 6
3. Decommissioning in the UK – Pressing on Post Pandemic 6
3.1 Short term outlook 2020 – 2024 6
3.2 Decommissioning over the next decade 10
4. The UK in detail 14
4.1 Well activity over the next decade 14
4.2 Removals activity over the next decade 16
OGUK's Interactive 4.3 Subsea decommissioning activity over the next decade 20
Decommissioning Toolkit 5. The Wider North Sea Perspective 22
5.1 A look at North Sea activity over the next decade 22
Scan the QR code above 5.2 A Focus on Norway 24
or visit 5.3 A Focus on the Netherlands 26
oguk.org.uk/decommissioning 6. Decommissioning and the Energy Transition 28
7. Appendices 32
7.1 Maturity of Estimates 32
7.2 Glossary 33
7.3 Forecast Activity in the UKCS over the next decade
– A detailed Snapshot 35

DECOMMISSIONING INSIGHT REPORT 2020 3

1. Foreword

Welcome to OGUK’s Decommissioning Insight 2021, marking the end of a year use the tool to create data visualisations that build stronger business cases
in which we saw some recovery after the challenges of the global pandemic with more relevant inputs. I am sure the founders of WG4 would be proud
and commodity price collapse in 2020. While some of those challenges remain, that the Decommissioning Insight report continues to grow from strength
the UK decommissioning industry is looking to the future with purpose. We’re to strength, embracing innovative ways to provide industry with ever more
establishing our key role in the transition to a low carbon energy mix, and granular market intelligence on decommissioning.
executing safe, innovative, and environmentally sound decommissioning. All
while continuing our journey to be safely more cost effective and to maximise Industry’s decommissioning success will depend on driving continuous
the export potential of our goods and services. improvement in efficiency and cost reduction. The 2021 Oil & Gas Authority
(OGA) cost estimate report said that the total cost of the industry’s
The UK industry has been working on decommissioning projects for decades, decommissioning bill had fallen by 23%. In 2017 it was £59.7 billion compared
and OGUK has been at the forefront. Many in the industry will remember with £46 billion this year. This is great progress, but there’s more to do if we are
workgroup 4 (WG4), first established in 2007 when the supply chain became to reach our 35% target by 2022. Together with industry, OGUK developed the
an integral part of OGUK’s remit. This was a pivotal moment in the UK Supply Chain Principles which define excellent practice in business behaviour.
decommissioning industry, helping to drive collaborative behaviours which During 2021, we’ve seen signs that our sector is increasing its support for
the wider industry can learn from. WG4 was responsible for launching many these principles, with innovative ways of working becoming a key focus.
initiatives including the first of its market leading decommissioning guidelines,
the annual Offshore Decommissioning conference and this Decommissioning Examples include new and creative contracting practices which enable the
Insight report. Together, this demonstrates that when operators and the implementation of multi-operator campaigns and allow work scopes to be
supply chain work towards the same goals, great things can be achieved. aggregated. This provides our world-class supply chain with much-needed
visibility of future work. In this way, it can hone its expertise and further
Demand for OGUK’s Decommissioning Insight continues to grow, and for this develop capabilities to achieve the commercial transformation ambitions
12th issue we are incorporating an interactive online tool to give users access outlined in the OGA’s decommissioning strategy. With £16.6 billion to be
to extensive information in more granular detail. Operators can compare their spent on decommissioning over the next decade, now is the time to act.
own data with their peers’ while companies providing goods and services can

4 DECOMMISSIONING INSIGHT 2021

New technology plays a key role in realising these ambitions with the Net encouraging industries to re-use components and promoting creative solutions
Zero Technology Centre (NZTC) providing a hotbed for innovation. But we for recycling decommissioned materials.
need to accelerate the deployment of technologies so we can realise the
full benefits they will deliver. OGUK’s Decommissioning Forum Steering This growing and broadening decommissioning expertise means our industry
Committee is prioritising the implementation of new technologies while our is becoming a powerful global brand. It has a crucial role to play in helping
Well Decommissioning Operators Network (WDON) is supporting an NZTC deliver the UK’s net zero ambitions, as outlined in the North Sea Transition
initiative to accelerate the implementation of alternative well barriers. Deal, while supporting the establishment of the low-carbon energy industries
that will deliver the diverse energy mix of the future.
As one of the world’s most mature oil and gas basins, the North Sea has
become the incubator of significant decommissioning expertise, with UK
services and goods, regulation and guidance in demand around the globe.
Other countries around the world, including Australia, have based much of
their own decommissioning strategy on the UK’s experience. OGUK’s well
decommissioning guidelines, and the UK’s decommissioning work breakdown
structure (WBS) are being widely adopted globally. This market-leading
capability is recognised by the government’s Department for International Katy Heidenreich
Trade (DIT) and given the need to capitalise on early mover advantage in the Supply Chain & Operations Director, OGUK
market, DIT is developing an export strategy for decommissioning, which
will help maximise the potential of the UK supply chain.

In the year of COP26, this industry continues to play a vital role in the energy
transition to a low carbon economy as the UK strives to cut its greenhouse
gas emissions at pace. We’re focusing on greener ways to decommission
and identify circular economy opportunities. That means re-purposing
offshore infrastructure for hydrogen and carbon capture & storage projects,

DECOMMISSIONING INSIGHT 2021 5

2. Key Findings

Industry remains resilient through pandemic A decade of decommissioning- the time is now

spent in forecast spend for

£1.07 £1.46
will be spent on Central and

billion 2020 billion 2021 £16.6

billion
decommissioning
an increase from
£15.1 billion
Northern North
Sea dominate
decommissioning
last year expenditure
In 2020 & 2021 combined industry decommissioned:

wells topsides jackets

Well decommissioning accounts
for 50% of the expenditure 9% 9% of the expenditure will
be on subsea infrastructure
234 21 18 - £8.241 billion on 1,782 (£1.532 billion)

50%
OUT OF
SERVICE

wells – up 1,616 from

OUT OF OUT OF OUT OF
SERVICE SERVICE SERVICE

last year
~88,000 tonnes of
• 1,083 platform wells subsea structures
• 582 subsea
• 117 Exploration and appraisal wells >16,500 mattresses
of Almost 350km of pipelines
~50km of ~4,500 subsea ~1,600 mattresses to be removed
pipelines tonnes
structures
OUT OF
SERVICE
125 topsides ~1.2
~1.2 million tonnes* of million
to be removed tonnes
(~700,000 tonnes) infrastructure from UK alone
*note – not including pipelines

12%
OUT OF
SERVICE

115 jackets to be
Decommissioning is 12% of industry expenditure in 2021 decommissioned 1/3 of the infrastructure 1/3
(~400,000 tonnes) installed in the UK today

6 DECOMMISSIONING INSIGHT 2021

 Building a centre of excellence Decommissioning - a key part of the Energy Transition

Industry working to become more effective and efficient: Re-use and re-purposing

Safe and environmentally sound

Y REP Multi-operator campaigns

Opportunities
Academia
LIT U
to repurpose
I

Operators
AB

TA
infrastructure for:

TIO
CAP

Proje
ct
CCUS Hydrogen Offshore Wind Geothermal

N
s

Supporting the circular economy Natural decline

Exports

Technology Supply Chain Government Over 1,000,000

& Regulators
tonnes of topsides from
OUT OF OUT OF

EXP
SERVICE SERVICE

E RTISE Innovative contracting models North Sea region coming

Oil and gas emissions
falling as some older
onshore over the next
and larger assets
decade. Much
Decommissioning insight 2017 Decommissioning insight 2021
come off stream
Wells 1,624 1,782 of which can be
Industry is becoming Platforms 98 125 reused or recycled.
more efficient Subsea Structures 49,373 tonnes 87,974 tonnes
Total Expenditure £17 billion £16.57 billion
Low carbon decommissioning
Establishing the UK as a global hub
Decommissioning can be an energy-intensive exercise —
we must find ways to reduce our total carbon footprint in
Insight develops with OGUK's decommissioning, like any other part of the industry and the
Interactive Decommissioning Toolkit rest of the economy

DECOMMISSIONING INSIGHT 2021 7

3. Decommissioning in the UK – Pressing on post pandemic
3.1 Short term outlook 2020 – 2024
Figure 1 – 2020 actuals and short term outlook
Decommissioning area Activity in 2020 (actual) Activity in 2021 (forecast) Activity from 2022–2024

84 wells 589 wells

OUT OF

150 wells
SERVICE

• 65 platform well • 124 platform wells • 407 platform wells

Wells • 13 subsea wells • 16 subsea wells • 141 subsea wells
• 6 E&A • 10 E&A • 41 exploration & appraisal wells

OUT OF
SERVICE

14 topsides 7 topsides 45 topsides to be removed

Topsides 152,502 tonnes
56,641 tonnes 56,191 tonnes

OUT OF
SERVICE

11 jackets 7 jackets 44 jackets to be decommissioned

Substructure
27,108 tonnes 19,679 tonnes 56,305 tonnes

Subsea 3.865 km 44.458 km 57 km pipelines to be removed

Infrastructure 2,528 tonnes 2,002 tonnes 8,956 tonnes of subsea structures removed
to be removed 1,088 mattresses 499 mattresses 5,739 mattresses to be removed

8 DECOMMISSIONING INSIGHT 2021

An industry in action – the industry demonstrated resilience in 2020 despite the
challenges presented by the global pandemic and volatile commodity prices. Figure 1
shows that the UK industry is actively dealing with everything from well decommissioning Survey methodology
and platform and jacket removals to subsea infrastructure decommissioning projects for
the coming few years. Data for Decommissioning Insight 2021 have been provided by all 31 operators
across the UKCS as part of the Asset Stewardship Survey, overseen by the Oil
There are signs of market recovery – The UK oil and gas industry saw lower expenditure & Gas Authority (OGA). The survey collates information from all UK operators
in 2020 and this was true of the decommissioning sector too. As Figure 1 shows, the between November and February each year. The forecasts in this report are
reduction hit well decommissioning hardest. These projects are expensive owing to the provided by operators and represent their best estimates at the time of the
number of people and the kind of equipment needed. Last year, only 84 wells were survey. Timings are therefore subject to change.
decommissioned on the UKCS, whereas a typical year sees around 150. This year, 150
wells are forecast to be decommissioned, which is a sign of market recovery. For the first time ever, the data have been
consolidated using PowerBI, providing the
From 2022 to 2024 the forecast shows business returning to its usual pace. With annual ability to gain insights in more granular
expenditures just over £1.5 billion, it is anticipated that almost 600 wells and around 45 detail. This report is accompanied by an
topsides and jacket structures will be decommissioned. It is also anticipated that 69km online tool where the user can access
of pipelines, almost 6,000 tonnes of subsea structures and just over 4,000 mattresses and view the data in an interactive way.
will all be removed. This allows operators to compare their
own data with their peers’, and the supply
An evolving industry - As the oil and gas industry evolves into an integrated energy chain to tailor data visualisations to its own
industry, it will play a vital role in the nation’s climate ambitions. Continued investment business needs and so build better business
OGUK's Interactive
in barrel-adding activity to maximise economic recovery and energy transition projects, cases.
Decommissioning Toolkit
like asset electrification, to meet stringent emissions reductions targets, will impact
decommissioning activity, and therefore this report will continue to provide valuable Scan the QR code above
insight. or visit
oguk.org.uk/decommissioning

DECOMMISSIONING INSIGHT 2021 9

3.2 Decommissioning over the next decade
Figure 2 – UKCS Decommissioning Expenditure (with forecasts for 2021 onward) Figure 3 - Forecast Comparisons for Cumulative Expenditure
Project Management Post CoP Running Costs
Well Decommissioning Facilities / Pipelines De-energising 35

2.50 Topside Preparation Topside Removal

Substructure Removal Subsea Infrastructure
2021 Forecast

Cumulative Decommissioning Expenditure (£ Billion - 2020 Money)

30
Topsides & Substructure Onshore Decommissioning Site Remediation
2020 Forecast
Post Decommissioning Monitoring
2.00 Reduced Spend Scenario
25 2017 Forecast

£1.345
Expenditure (£ Billion)

1.50 £1.297 billion 20

billion
£1.074
billion 15
1.00

10

0.50
5

0.00 -
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Source: OGA & OGUK
Source: OGA & OGUK

Figure 4 – UKCS Expenditure Over Time

35 Operating Expenditure
Development Expenditure
30
(£billion - 2020 money)

Exploration & Appraisal Expenditure

Total Expenditure

25 Decommissioning Expenditure
20
15
10
5
0
1972

2006

2012
1970

1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004

2008
2010

2014
2016
2018
2020
Source: OGUK, OGA
10 DECOMMISSIONING INSIGHT 2021
In line with previous reports, Decommissioning Insight 2021 focuses on expenditure for be why we see an expenditure spike in 2022 with much of the deferred activity displaced
ten years ahead, highlighting the near-term opportunities for the UK’s decommissioning to that year. This year, £1.45 billion is forecast to be spent, perhaps marking a return to
supply chain. The UK industry should be able to use the information in this report to help business as usual.
position itself as a global leader in the decommissioning market.
£16.57 billion will be spent on decommissioning in the UK over the next decade – Figure
Industry becoming more cost effective –Figure 2 shows the annual expenditure broken 3 shows the cumulative expenditure curves from recent Decommissioning Insight reports.
down into the 11 elements of the work breakdown structure (WBS). There are clear peaks The forecast cumulative expenditure in 2020 is shown by the purple line. At that point,
in the expenditure profiles in 2022 (£1.87bn), 2026 (£2.00bn) and 2028 (£2.24bn) which lift there was no real certainty on a vaccine programme and the oil price in 2020 averaged
the average but otherwise expenditure remains around £1.5 billion per year as in previous $41.88/bbl (compared with $64.30/bbl in 2019) and $69.45/bbl as of the end of October
insight reports. Decommissioning Insight reports for the years 2018, 2019 and 2020 all 2021. The 2020 report therefore explored a range of “reduced expenditure scenarios” for
showed expenditure levels for the next ten years (in each case) of just over £15 billion. decommissioning, with the low end at around £22.1 billion by 2030. The orange line shows
Decommissioning Insight 2017 showed a £17 billion anticipated expenditure. This year’s the cumulative expenditure using the 2021 data set. The figures show that the industry will
dataset has more wells, more platforms and more subsea removal weight, and is expected have spent just over £26.5 billion on decommissioning by 2030.
to cost over £400 million less.
The industry has effectively managed its offshore activity despite the pandemic, and while
Decommissioning Insight 2017 Decommissioning Insight 2021 the virus means the future is still uncertain, many lessons have been learned and processes
are now in place to mitigate many of the known implications to working offshore in this
Wells 1,624 1,782 environment. Commodity prices remain volatile, particularly in the case of gas. Brent
Platforms 98 125 crude has seen some relative stability since mid-year, trading consistently above $70/bbl,
following an increase from $50/bbl at the start of the year. However, gas prices have
Subsea Structures 49,373 tonnes 87,974
increased by more than 400 per cent throughout the year, reaching record and prolonged
Total Expenditure £17 billion £16.57 billion high levels. While this may result in the deferral of some decommissioning activity, the
impact will be fully assessed next year.
Industry withstands the shocks of volatile pricing and COVID – Figure 2 also shows the
actual expenditure in the UK decommissioning industry. In 2018 industry spent almost The light blue line shows the cumulative expenditure in 2017. This was the year the OGA
£1.3 billion, rising to almost £1.35 billion in 2019. This trend was expected to continue introduced the industry target to reduce the total forecast costs of decommissioning by
with Decommissioning Insight 2020 forecasting £1.47 billion in 2020. But like many other 35 per cent, from an initial 50% probability estimate (P50) of £60 billion to a target of £39
sectors, the industry was impacted by the COVID pandemic and the commodity price billion. The 2017 forecast would have seen about £32.2 billion spent by 2030. This shows
fluctuations. Still, it spent almost £1.1 billion, only 20 per cent less than it had the year that while there has been a minor increase in expected expenditure over the next decade,
before. While this reduction was partly due to cost efficiencies, much of the expenditure this year compared with last, it is significantly less than the 2021 spend forecast in 2017.
reduction in 2020 was due to activity being pushed to later years in the data set. This may
DECOMMISSIONING INSIGHT 2021 11
 5%
7%
OUT OF
SERVICE

5%
16% 5% 43%
Central North Sea
Figure 5 – Work Breakdown Structure
7% Northern North Sea
Southern North Sea
West of Shetland
Central North Sea Central North Sea
16% 43% 43%
Northern North Sea
Irish Sea
Northern North Sea
Southern North Sea Southern North Sea
West of Shetland West of Shetland
29%
OUT OF
SERVICE

Irish Sea Irish Sea

Source: OGA & OGUK

29%
Source: OGA & OGUK
Source: OGA & OGUK

1 2 3 4 5 6 7 8 9 10 11
Project Post-CoP Well Facilities & Pipelines Topsides Topsides Substructure Topsides and Subsea Site Post-
Management Running Costs Decommissioning Permanent Isolation Preparation Removal removal Sub-structure Infrastructure Remediation Decommissioning
& Cleaning Onshore Disposal Monitoring

Proportion of overall expenditure over the next decade (£million)

7% 9% 50% 4% 3% 9% 4% 3% 9% 1% <1% TOTAL
Northern North Sea &
£436.87 £657.01 £2,858.12 £258.57 £157.77 £548.04 £214.07 £130.38 £582.81 £38.18 £14.17 £5,895.98
West of Shetland

Central North Sea £471.17 £724.75 £3,805.38 £126.36 £233.85 £461.24 £249.62 £215.26 £825.57 £42.12 £28.62 £7,183.95
Southern North Sea
£206.65 £187.41 £1,578.05 £50.72 £118.31 £466.51 £275.05 £113.77 £348.20 £113.44 £28.67 £3,486.78
& East Irish Sea
TOTAL £1,114.69 £1,569.17 £8,241.55 £660.55 £509.92 £1,475.79 £738.73 £459.41 £1,531.69 £193.74 £71.46 £16,566.72

12 DECOMMISSIONING INSIGHT 2021

 Figure 6 – UKCS Regional Expenditure
Breakdown by year (2021-30)
100%

90% Decommissioning is 12.1 per cent of UK offshore Decommissioning expenditure is dominated by central
80% expenditure – In 2021 the UKCS oil and gas industry and northern North Sea – Almost £7.2 billion (43 per
70% is forecast to spend just over £12.1 billion across all cent of the total) will be spent on projects in the central
60% activities, as shown in Figure 4. Around £1.46 billion of this North Sea (CNS) over the next decade, with almost £4
50%
is on decommissioning, representing around 12.1 per cent billion going on well decommissioning. Figure 6 shows that
40%
of the total expenditure. decommissioning projects in the CNS account for almost
30 percent of the expenditure in 2021 but this rises to
30%
Deferral of well decommissioning increases forecast above 50 per cent by 2030. Expenditure in the Southern
20%
expenditure – This year’s dataset shows that over North Sea (SNS) accounts for almost 30 per cent in 2021
10%
£8.241 billion (50 per cent of the total) will be spent on but this proportion falls in the middle of the decade, as
0%
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
decommissioning 1,782 wells over the next decade, up some major projects come to an end. Then the focus shifts
CNS NNS SNS WoS IS from £7.390 billion (1,616 wells) in last year’s report. to the Irish Sea (IS) and West of Shetland (WoS).
Source: OGA & OGUK
Looking at the 2019 Decommissioning Insight report, the
industry forecasts that around £6.8 billion will be spent Expenditure profiles differ in regions throughout the
Figure 7 – Breakdown of Expenditure by WBS
on decommissioning 1,630 wells over the ten-year period. North Sea - Figure 7 shows the total expenditure in
element by Region (2021-30) This is £1.4 billion more and will include 152 additional each region, broken down into the different elements
100%
wells over the decade. of the decommissioning WBS. This chart shows the
nuances experienced in different regions. For example,
80%
Well decommissioning was a key focus area in 2020, post cessation of production (CoP) running costs play a
60% sparking initiatives within industry associations and larger role in the NNS and CNS compared with the SNS.
regulators as industry looked to support the industry’s This is because the assets are much larger, housing more
40% recovery by stimulating activity throughout the basin. Last people and being more complex. A greater share of
year’s asset stewardship survey was conducted before the decommissioning projects has been conducted in the SNS
20%
COVID pandemic took hold, and since then almost half the where tail-end decommissioning activities, such as site
0% wells have had to be postponed for a year or more. remediation, play a larger role.
CNS NNS & WoS SNS & IS
Post-Decommissioning Monitoring Site Remediation
Subsea Infrastructure Topsides and Sub-structure Onshore Disposal
Substructure Removal Topsides Removal
Topsides Preparation Facilities & Pipelines Permanent Isolation & Cleaning
Well Decommissioning Post CoP Running Costs
Project Management
Source: OGA & OGUK

DECOMMISSIONING INSIGHT 2021 13

 Figure 9a – Average Forecast Well Decommissioning Cost
4. The UK in detail in the CNS, NNS,& WOS (2021-30)
14 Average = £8.14m
Median = £8.69m Average = £4.69m

Figure 8 – Well Decommissioning Activity in the UKCS (2021-30) 12

Median = £3.78m
Average = £4.50m
Median = £3.44m

10
300

Estimated Cost per Well

Platform Wells - Forecast
Subsea Wells - Forecast 8

250 Suspended Subsea Wells - Forecast Average = £2.91m

6 Median = £2.80m Average = £8.56m
Number of wells to be decommissioned

Average = £2.95m Median = £9.20m

Median = £3.43m Average = £7.99m
200 4
Median = £8.33m

2
Average = £4.77m
150 Average = £2.98m Median = £5.55m
Median = £3.11m
0
2019 2020 2021 2019 2020 2021 2019 2020 2021

100 Platform Subsea E&A

Source: OGA & OGUK

50 Figure 9b – Average Forecast Well Decommissioning Cost

in the SNS & IS (2021-30)
14
0

Estimated Cost per Well (£ Million - 2020 Money)

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Average = £6.06m
Median = £6.33m
Source: OGA & OGUK 12

Average = £5.42m
Median = £5.09m
10
Average = £2.45m
NNS & Median = £2.97m

Well Type CNS SNS & IS Sub-Totals % 8

WoS Average = £3.34m
Median = £3.35m

6
Platform Well 275 325 483 1,083 61% Average = £2.45m
Median = £3.04m Average = £2.34m
Median = £2.70m

Subsea Well 208 319 34 582 33% 4 Average = £6.00m

Median = £6.28m

Suspended 2
Average = £3.25m
32 51 55 117 7% Average = £2.88m
Median = £3.37m

E&A 0
Median = £2.38m

2019 2020 2021 2019 2020 2021 2019 2020 2021

Total 515 695 572 1,782 100% Platform Subsea E&A
Source: OGA & OGUK

14 DECOMMISSIONING INSIGHT 2021

Well decommissioning forecasts increase – Figure 8 shows that 1,782 wells are to be E&A well forecasts increase – This year’s report states that 117 suspended exploration
decommissioned on the UKCS over the next decade. This is an increase from the 1,616 and appraisal wells are forecast for decommissioning in the next decade compared
forecast in Decommissioning Insight 2020. The data also show a fluctuating workload with 80 in last year’s dataset. This increase of almost 50 per cent is likely due to new
over the next decade with spikes occurring in 2023, 2026, and 2028 and 2030. The guidance from the OGA on timelines for decommissioning suspended E&A wells,
sporadic nature of this activity demonstrates the challenging business environment which recommends that operators have plans in place to decommission this well
the industry faced in 2020, when the pandemic and price fluctuations hit the labour- stock within two to five years, unless otherwise justified.1 There is a collective drive
intensive well decommissioning area particularly hard. by industry to collaborate to achieve multi-operator, multi-well decommissioning
campaigns, and suspended E&A wells is one area where success could influence other
Activity peaks are anticipated to level out – All the wells earmarked for decommissioning well decommissioning areas. £509 million is currently to be spent on decommissioning
in 2020 but not completed were moved into later periods of the dataset. The data is suspended E&A wells over the next decade.
compiled by each operator in isolation, therefore while individual operators will plan
their portfolios of work to effectively manage their own workload and budget, they Well decommissioning costs remain consistent – The cost of decommissioning wells in
do not usually consider their peers’ plans when forecasting their own workload. This the CNS, NNS and WoS remains consistent for all well types. Platform wells cost about
explains the spikes in activity. The reality is that, while the UKCS supply chain can adapt, £2.98 million each, very close to the £2.95 million figure in last year’s report. Subsea
each year there will only be the capacity to liquidate a certain amount of scope, so it is well costs are also lower at just under £8 million which is not expected to change; and
likely that we will see a steadier and more sustainable workload. E&A well costs are also roughly the same in 2021 and 2020 at £4.77 million, although the
range has reduced in this year’s report. There is similar softening of costs in the SNS and
NNS less impacted – The data shows a slight reduction in the well numbers in the NNS and IS. In these regions platform wells are expected to cost £2.34 million, subsea wells £6.06
WoS regions, with 515 wells to be decommissioned in the next decade compared with million and E&A wells £3.34 million, on average, over the next decade.
552 in last year’s dataset. This is because most of the well activity in the NNS earmarked
for 2020 went ahead. The main differences come in the CNS, where 695 wells are now Well decommissioning forecast costs are consistent with OGA actual benchmarks –
set to be decommissioned, compared with 615; and in the SNS & IS where 572 wells are When compiling cost estimates, it is important to note that the figures reported in the
forecast compared with 449 over the next decade as stated in Decommissioning Insight Decommissioning Insight are based on an average of operator estimates for the activity.
2020. The OGA produces its “Decommissioning Benchmarking Report”2 which reports actual
performance annually. In 2020, the industry reported that platform wells in the NNS
and CNS cost £3.0 million apiece, subsea well cost £7.8 million and E&A wells cost £3.3
million to decommission. In the SNS and IS, platform wells cost £2.8 million, subsea £6.3
million and E&A wells £4.2 million (again, all at P50).
1
https://www.ogauthority.co.uk/media/5108/oga-suspended-wells-guidance.pdf
2
https://www.ogauthority.co.uk/media/7864/decom_benchmarking-report-2021_final111121.pdf

DECOMMISSIONING INSIGHT 2021 15

4.2 Removals activity over the next decade
Figure 10a – Tonnage of Topsides to be Figure 10c - Tonnage of Substructure to be Figure 10e - Average Forecast Topsides and
Decommissioned (2021-30) Decommissioned (2021-30) Substructure Removal Cost in the CNS, NNS,
120,000
CNS NNS & WoS SNS & IS
80,000
CNS NNS & WoS SNS & IS
& WOS (2021-30)
£9,000
70,000
100,000
£8,000

Estimated cost per tonne (£ - 2020 money)

Average = £2,823
60,000 Median = £2,898
Topsides to be Decommisioned (t)

£7,000
80,000

Substructure to be Decommissioned (t)

50,000 Average = £2,190
£6,000
Median = £2,304 Average = £2,024
Median = £2,361
40,000 £5,000
60,000 Average = £2,110 Average = £1,772
Average = £1,794 Median = £2,061
£4,000 Median = £2,105
Median = £1,974
30,000
40,000 £3,000
20,000
£2,000
20,000
10,000 £1,000

£0
0 0 2019 2020 2021 2019 2020 2021
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Topsisdes Substructures
Source: OGA & OGUK Source: OGA & OGUK
Source: OGA & OGUK

Figure 10b – Number of Topsides to be Figure 10d - Number of Substructures to be Figure 10f - Average Forecast Topsides and
Decommissioned (2021-30) Decommissioned (2021-30) Substructure Removal Cost in the SNS & IS
(2021-30)
£16,000
17 Total
Total
16 CNS 16
CNS £14,000
15 NNS & WoS
NNS & WoS SNS & IS
14 14 14 14
SNS & IS

Estimated cost per tonne (£ - 2020 money)

13 13 £12,000
12 12 12 12 12 12 12
11 £10,000
10 10 10
9 9 £8,000
8 8 8
7 7 7 7 7 7 7 £6,000

5 5 Average = £3,033
£4,000
4 4 4 Median = £3,368
Average = £2,020 Average = £2,296
3 3 3 3
Median = £2,433 Median = £2,596
2 2 2 2 2 2 2 2 2 £2,000
1 1 1 1 1 1 1 1 1
0 0 0 0 0 0 0 0 0 £0
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2019 2020 2021

Source: OGA & OGUK Source: OGA & OGUK Source: OGA & OGUK

16 DECOMMISSIONING INSIGHT 2021

Topsides and substructure removal activity on the rise – 125 topsides (704,230 It should be noted that the top and bottom ends of the cost estimate range have
tonnes), and 115 jacket structures (382,308 tonnes) will be decommissioned over the moved closer together (see the charts in Figure 10) as the amount of data about project
next decade. This is up from 93 topsides and 85 jackets as reported in Decommissioning expenditure rises.
Insight 2020. Both topsides and substructure charts show tonnage being removed at
a steady rate in the first half of the decade before rising in the latter half. Topsides Decommissioning lift market interacting with other markets – The offshore
removals between 2021 and 2025 will average around 50,000 tonnes per year, and decommissioning market is now interacting with the offshore wind installation market.
substructure decommissioning around 20,000 tonnes. This increases to around 90,000 As of 31 December 2020, the UK had 2,291 offshore wind turbines, and 33 offshore
tonnes of topsides removed, and 60,000 tonnes of substructures decommissioned per substations installed around its shores with a further 719 offshore turbines and 11
year from 2026 to 2030. offshore substations under construction.3 The lift vessels and resources used to install
offshore wind turbines are the same as those used to remove offshore oil and gas
The data show the relationship between tonnage removed, and quantity of installations installations, particularly the smaller assets in the SNS. The oil and gas industry will
removed. For example, 2023 is the year with the lowest topsides tonnage removed: normally offer long time windows of two to three years for a lift contractor to remove an
33,666 tonnes. It is also a year of high activity with 15 topsides removed. All the removals installation. This has allowed contractors to remove assets during quieter periods, which
activity in this year is conducted in the SNS, where assets are much smaller than in the increases vessel utilisation and cuts operator costs. Offshore wind farm installation
CNS and NNS. The weight of individual assets being removed in 2023 is between 240 projects are getting larger, with many installation campaigns for a lift vessel now running
and 6,547 tonnes. into the hundreds of days. This means that even though oil and gas removal projects
have offered windows, the timeframes for removals are constrained. With many assets
More cost certainty for platform removals costs – The cost per tonne of both topsides being removed during short time periods this could in future have a knock-on effect on
and substructures has dropped slightly in the CNS, NNS and WoS. This year’s report onshore disposal facility capacity. Additionally, as offshore wind turbines get larger, this
expects topsides removal to cost £2,011 /tonne, down from £2,190 last year; and market could start to interact with those larger oil and gas installations in the CNS and
£1,722/tonne for substructures compared with £2,024/tonne in last year’s report. By NNS. Over time, as offshore wind farms age, these too will be decommissioned as will
contrast, in the SNS and IS we see a slight increase at £2,296/tonne, compared with offshore structures to support industries like CCUS, hydrogen and geothermal. While
£2,020 last year. Topsides and substructure costs are combined in this region as most these industries will benefit from a supply chain expertise born from decommissioning
projects remove the topsides and the substructure in the same campaign. They are oil and gas structures, as many of the skills and infrastructure are easily transferable,
smaller than assets in the CNS and NNS. competition for resources may also drive up prices.

3
https://www.thecrownestate.co.uk/media/3792/offshore-wind-operational-report-1.pdf

DECOMMISSIONING INSIGHT 2021 17

 CASE STUDY: TAQA and Brae Bravo

The Brae Bravo decommissioning project is a landmark

Earlier this year, TAQA Europe made history as it undertook its first major
for TAQA and has set the standard for decommissioning
decommissioning project, which also happened to be one of the largest topside
programmes going forward. It has established a foundation
removal projects of its kind in the North Sea.
for future decommissioning success, demonstrating TAQA’s
ability to complete such programmes in line with its safety and
The Brae Bravo platform produced about 500 million barrels of oil equivalent over
sustainability goals.
its 33-year lifetime. With nearly 300,000 arrivals on its helideck since 1982, it is
known to many in the industry for its sheer size. The successful completion of this
The structure, weighing over 36,000 tonnes, was sent to the AFOD
project marked the culmination of many years of thorough planning by a project
Environmental Base in Vats, Norway, with the aim of reusing or
team which shaped a bespoke strategy for a programme of such size.
recycling 95% or more of the material.
When TAQA assumed operatorship of the Brae field in October 2020, the project
The logistics and applied resources have placed Brae Bravo
remained on track for 2021 execution. The removal strategy centred upon a two-
among the most intense projects performed in the North Sea
phased campaign – one that featured two of the world’s largest semi-submersible
over the past year. At peak, during the first phase, more than
crane vessels: Heerema Marine Contractors’ Thialf and Sleipnir.
500 personnel, many from sub-contractors based in Aberdeen
and across the UK, were on the semi-submersible crane vessels.
Campaign 1, executed from the Thialf, removed the platform cranes and helideck,
Nearly 400,000 working hours were performed across both
and prepared the remaining topsides for removal at a later stage. During these
phases without any major incidents recorded.
activities, Sleipnir simultaneously completed the removal of the Brae Bravo flare
tower, bridge and flare jacket marking the first time these two semi-submersible
For many people who worked on the decommissioning
crane vessels converged in the North Sea. Campaign 2 saw the return of the Sleipnir
programme, this marks the end of an era. The safe and successful
to remove the remaining topside modules and transport them to the dismantling
removal project, completed during an unprecedented global
yard.
pandemic, was a fitting conclusion.

18 DECOMMISSIONING INSIGHT 2021

DECOMMISSIONING INSIGHT 2021 19
 Figure 11a – Subsea Decommissioning Expenditure
in the UKCS (2021-30)
350
CNS
300 NNS&WoS
SNS&IS

250

349km of pipelines to be removed

Forecast Expenditure (£ Million)

200

150
over the next decade
100

50

0
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Source: OGA & OGUK

Figure 11b – Subsea Structure Removal Tonnage Figure 11c – Number of Mattresses Removed in the UKCS (2021-30)
30,000 in the UKCS (2021-30)
3,500

CNS
25,000 CNS
3,000 NNS&WoS
NNS&WoS SNS&IS
SNS&IS
20,000 2,500
Subsea Structure Removal (tonnes)

Quantity of Mattresses
2,000
15,000

1,500

10,000
1,000

5,000 500

0
0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Source: OGA & OGUK
Source: OGA & OGUK
20 DECOMMISSIONING INSIGHT 2021
Subsea decommissioning expenditure sees slight reduction – This year’s insight report Subsea structure removal activity set to increase steadily over time – Around 2,000
looks in greater detail at the subsea infrastructure than in previous years. With 9 per tonnes of subsea structures are forecast to be removed between 2021 to 2023 rising
cent of the overall expenditure forecast to be spent on subsea decommissioning, this is steadily to over 11,000 tonnes in the middle of the decade. A spike is seen in removals
a key cost driver for the UK decommissioning industry. £1.531 billion is set to be spent in activity in 2030 as a few larger subsea structures are set to be decommissioned in the
a fluctuating profile over the next ten years, a reduction from the £1.622 billion forecast CNS. Decommissioning Insight 2020 forecast that just over 70,000 tonnes were forecast
in Decommissioning Insight 2020. to be removed but this has increased to almost 90,000 tonnes in this year’s report.

Invisible decommissioning – There are almost 350km of pipelines, 90,000 tonnes

of subsea infrastructure, and 17,000 mattresses to be removed from the UKCS over Mattress decommissioning sees slight reduction – 16,661 mattresses are set to be
the next decade. This is a side of decommissioning that goes relatively unnoticed by removed from the North Sea over the next decade, down from around 22,000 reported
communities. While large topsides and jacket structures normally draw a crowd as they in last year’s Decommissioning Insight. Of that total, 7,620 are in the CNS with slightly
are brought ashore for disposal, these smaller pieces of infrastructure tend to escape fewer expected to be removed from the NNS and WoS (4,886) and SNS and IS (4,155).
public attention as they are landed and transported to their final destination for disposal,
reuse or recycling. With a supply chain well set up to service the oil and gas sector, these
smaller items are more “business as usual” for the logistics and disposal organisations in
the areas used to dealing with this kind of infrastructure.

DECOMMISSIONING INSIGHT 2021 21

5. The Wider North Sea Perspective

5.1 A look at North Sea activity over the next decade

The UK does the most North Sea decommissioning work – Decommissioning in the
Survey methodology
UK accounts for 67% of the North Sea’s well decommissioning workload, 69% of the
Data have also come from other countries around the North Sea, namely Norway,
topsides removal tonnage and 68% of the substructure decommissioning tonnage.
the Netherlands and Denmark. Data from the Netherlands came from Nexstep,
a joint initiative of the state-owned Energie Beheer Nederland (EBN) and the
North Sea well decommissioning remains steady over the next decade – Over 200
Dutch oil and gas industry, represented by NOGEPA. OGUK also collected data
wells are forecast to be decommissioned each year across the North Sea with 2,679
directly from three operators in Denmark.
wells in total. 528 wells are to be decommissioned in the Netherlands, 278 wells in
Norway and 91 in Denmark. Again, there are spikes in the dataset for 2021, 2023 and
For the first time, data from Norway were collected by Norsk Olje Og Gass
2026 in an otherwise smooth portfolio of work.
(NOROG), a trade association representing the Norwegian oil and gas industry.
The data came from a record eight operators, allowing greater insights as
Topsides decommissioning activity is steadily rising over the next decade – Just over 1
detailed in this section.
million tonnes of topsides infrastructure will be removed over the next decade, up from
900,103 tonnes as stated in Decommissioning Insight 2020. There is a general increasing
trend in topsides decommissioning with just under 60,000 tonnes to be removed in
2021, rising to almost 160,000 tonnes in 2029 before dropping back to just over 120,000
tonnes in 2030. Again, most of the topsides comes from the UK sector, with Netherlands
scopes starting to rise from 2023, and a few large Norwegian scopes slated for the end
of the decade.

A game of two halves for North Sea substructure decommissioning – A steady workload
of substructure decommissioning is anticipated for the North Sea where between
20,000 and 40,000 tonnes are expected to be decommissioned between 2021 and 2025.
The activity then peaks in 2026, with a few large projects forecast to take place in the UK
and Norway. The workload in the latter half of the decade remains high at above 70,000
apart from 2028 where just under 50,000 tonnes are forecast to be decommissioned.

22 DECOMMISSIONING INSIGHT 2021

 Figure 12a – Number of Wells to be Decommissioned Figure 12b - Number of Topsides to be Figure 12c - Number of Substructures to be
in the North Sea (2021-30) Decommissioned in the North Sea (2021-30) Decommissioned in the North Sea (2021-30)
500
UK
450
Norway 180,000 160,000
400
Number of Wells to be Decommissioned

The Netherlands UK
160,000 140,000
UK
Denmark Norway

Substructures to be Decommissioned (t)

350
140,000 Norway The Netherlands

Topsides to be Decommissioned (t)

120,000
Denmark
300 The Netherlands
120,000
100,000
Denmark
250 100,000
80,000
200 80,000
60,000
150 60,000

40,000 40,000
100

50 20,000 20,000

0 0
0
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Source: OGUK, OGA, NexStep, NOROG Source: OGUK, OGA, NexStep, NOROG Source: OGUK, OGA, NexStep, NOROG

Country Number of wells Topsides (tonnes) Substructure (tonnes)

UK 1,782 67% 704,230 69% 382,308 68%
The Netherlands 528 20% 150,932 15% 77,913 14%
Norway 278 10% 149,914 15% 76,072 14%
Denmark 91 3% 12,107 1% 26,095 5%
TOTAL 2,679 100%* 1,017,183 100%* 562,388 100%*
*May not add to 100% due to rounding

DECOMMISSIONING INSIGHT 2021 23

 Figure 13 – Wells Activity in Norway (2021-30)
60

5.2 A Focus on Norway 50 Platform

Number of wells to be deommissioned

Subsea
40

30
OUT OF
SERVICE

278 wells to be decommissioned 20

Well • 237 platform wells 10

Decommissioning • 41 subsea wells
over the next decade 0
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Source: NOROG

OUT OF
SERVICE

Topsides removal Substructure decommissioning

150,932 tonnes 91,222 tonnes
Removals to be removed to be removed
over the next decade over the next decade

Subsea decommissioning to be decommisioned

Subsea Pipelines: 971km over the next decade
Infrastructure Subsea structures: 2,830 tonnes
Mattresses: 547 tonnes

24 DECOMMISSIONING INSIGHT 2021

 CASE STUDY: Norway Case Study – Repsol, Gyda

Both Phase I and III operations have been

The Gyda field is located in the Norwegian sector of the North performed using simultaneous operations
Sea about 280km southwest of Stavanger in 66 metres of water. (SIMOPS) with phase II activities being
The field was developed using a single integrated steel platform conducted by the rig. To perform these
which combines drilling, processing, and accommodation. operations in parallel with the rig has saved
Production commenced in June 1990 and oil, gas, and water have months of rig operations.
been produced from the reservoir about 4km below seabed. The
production from the field ceased February 2020. Preparation for removal is now ongoing
and the plan is to de-man the platform late
Repsol, as the operator of the field, finished decommissioning November.
the 32 wells in October this year in a campaign of 715 days. Prior
to start-up of the well decommissioning campaign a “ready to Both topside (17,270 tonnes) and jacket
operate” project for the rig was executed to make sure it was (13,386 tonnes) are planned to be removed
safe and would operate effectively during the campaign. by Pioneering Spirit during the summer
2022. The bearing blocks for the single lift
Decommissioning of the wells was done in three phases: have been installed while the engineering
down and cleaning work is being finalised.
• Phase I: Wireline to install a deep-set mechanical plug, release The conductors are cut and secured but will
of the annular safety valves, punch and cutting of production be removed with Pioneering Spirit during
tubing, displace well to kill fluid and install shallow barrier for the summer of next year in conjunction
nippling down X-mas tree with removal of the jacket.
• Phase II: Use of the main rig to pull tubing and set the cement
plugs in the wells
• Phase III: Cut and secure surface casings and conductors

DECOMMISSIONING INSIGHT 2021 25

 Figure 14 – Wells Activity in the Netherlands (2021-30)
120

5.3 A Focus on the Netherlands Platform

100
Subsea Development
Suspended E&A wells

Number of wells to be decommissioned

80

60

528 wells to be decommissioned

OUT OF
SERVICE

• 408 platform wells

40

Well
Decommissioning • 18 subsea wells 20

• 102 suspended E&A wells 0

over the next decade 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Source: Nexstep

OUT OF
SERVICE

Topsides removal Substructure decommissioning

149,914 tonnes 76,072 tonnes
Removals to be removed to be removed
over the next decade over the next decade

Subsea decommissioning to be decommisioned

Subsea Pipelines: 1,899km over the next decade
Infrastructure Umbilicals: 229km
Subsea structures: 1,841 tonnes

26 DECOMMISSIONING INSIGHT 2021

 CASE STUDY: Netherlands – Wintershall
Wintershall Noordzee, active in
Wintershall’s Dutch campaign gets under way the Southern North Sea since
1965, has substantial experience in
In August 2021, Wintershall Noordzee BV – a 50-50 joint venture between decommissioning and re-using its
Wintershall Dea AG and Gazprom EP International BV – embarked on a installations. Since the late 1980s, it has
large-scale, cross-border decommissioning programme in the Southern decommissioned 58 wells and removed
North Sea. This campaign, for its platform-based wells, demonstrates the 16 production platforms, of which seven
company’s commitment to decommissioning. topsides were reused at new locations in
the Southern North Sea.
The first part of Wintershall Noordzee’s programme will last for about
one and a half years and entails the decommissioning of 24 wells in both Decommissioning and complete
Dutch and German waters and the removal of two platforms and two removal of its assets is part of the
subsea installations. company’s activity cycle. The company
is also a strong believer in co-operation
The tender for this extensive program was granted to the Dutch between the producers and it shares the
contractor Swift Drilling. The Swift-10 jack-up rig has been modified lessons it has learned within the Nexstep
and prepared to start work after a period of stacking arising from the organisation. Wintershall Noordzee is
worldwide economic slump in offshore activities. The campaign began also participating in the Nexstep Joint
at the P9 location, where two subsea wells were decommissioned. After Campaign on Mudline Suspended (MLS)
successful finalisation by mid-October, the seabed domes were removed wells. The well decommissioning process
by a vessel. in the current campaign has a relative
low complexity and will be executed with a vessel rather than a rig.
The next stop for the rig is the Q4-A location, where decommissioning
work needs to be completed to make way for a wind farm. The Q4-A and As well as its platform based wells, the contract that Wintershall Noordzee
Q4-B platforms stand where the Hollandse Kust Noord wind farm is to be has for the Swift-10 includes options to extend the campaign beyond the
built. Removal of the two production platforms is foreseen for mid-2022. current 24 well scope. In parallel to the well decommissioning scope, the
company is also preparing for removal of related installations.

DECOMMISSIONING INSIGHT 2021 27

6. Decommissioning and the Energy Transition
In early 2021, the UK oil and gas industry reached the flagship North Sea Transition Deal Decommissioning across the energy sectors – While some elements of offshore oil and
(NSTD) with the UK Government. The UK’s offshore decommissioning sector will play a gas infrastructure may re-purposed for new industries, all offshore infrastructure will
fundamental role in supporting the nation's drive towards net zero carbon emissions. eventually be decommissioned. Sharing and learning across sectors like offshore wind,
Success in this area will add to the UK’s growing exportability in decommissioning. A nuclear, CCUS and hydrogen will increase efficiency where technologies, expertise and
dedicated group of operators and supply chain organisations within OGUK’s membership experience can be transferable.
is aiming to ensure that the key role played by decommissioning in supporting the energy
transition is understood, with focus on the following areas: Decommissioning: a pathway to the UK climate objectives - Approximately 23
installations are due to cease production between 2021 and 2025. Of those assets due to
The circular economy – Figure 15 shows the total mass of topsides, substructures come offline, four were commissioned before 1990. Natural decline of production from
and subsea infrastructure coming onshore for re-use, recycling, or disposal over the aging fields and assets and decommissioning older energy intensive installations during
next 10 years. Almost 1.2 million tonnes of infrastructure associated with platform this period is anticipated in total to remove 0.3 million tonnes per year of CO2 emissions.4
topsides, substructures and subsea structures will come ashore for dismantling over With emission considerations also now playing a part in contract wins, opportunities
the next decade. This figure is greater when including the waste associated with well for reducing emissions during decommissioning could be better understood by having
decommissioning, pipelines and mattresses with lengths of pipelines and numbers of readily available data on the emission intensities of decommissioning activities.
mattresses reported. Specific weights are not provided within the Asset Stewardship Continuing to strive for cost effective decommissioning will also release capital that can
Survey. be invested in ensuring the UK maintains its domestic oil and gas supply and in emission
reduction projects such as CCUS, hydrogen and geothermal.
It should be recognised that the materials brought onshore from oil and gas
infrastructure, like steel and other valuable metals, could be re-used again in the oil and North Sea Transition Deal – The NSTD is a transformational partnership between
gas industry, or in other industries, reducing the emissions-intensive creation of alloys the UK government and the UK oil and gas industry which will harness the expertise
from raw materials. The onshore dismantling industry is learning fast, progressing well of the industry to meet the country’s urgent climate ambitions of net zero emissions
and the amount of material being re-used and recycled from our industry is increasing. by 2050. The deal has clear outcomes for industry to achieve by 2030. One of the key
performance indicators for the deal is for 50% UK content over the lifecycle of all related
Prolonging lifetime through re-purposing infrastructure – Opportunities also exist new energy projects, as well as oil and gas decommissioning, including 30% locally
for a few installations to re-purpose elements of offshore oil and gas installations, like provided technology. This will be supported by the appointed industry Supply Chain
platforms, pipelines, or wells to support carbon capture utilisation and storage (CCUS), Champion, Sian Lloyd Rees, who will work with government and the industry to help the
hydrogen, geothermal and offshore wind. thousands of companies that support the UK oil and gas sector as they adapt to deliver
the cleaner energy technologies that will increasingly power the UK.5
4
OGUK Energy Transition Outlook 2021
5
https://www.gov.uk/government/publications/north-sea-transition-deal

28 DECOMMISSIONING INSIGHT 2021

 CASE STUDY: CessCon

CessCon Decom took delivery of the DP3 and DP4 platforms from Spirit Energy’s
Figure 15 – Total Tonnage Coming Onshore Morecambe Bay development in the East Irish Sea in June 2021.

from the UKCS (2021-30)

250,000

Topsides & Substructures

Subsea Infrastructure
200,000
Mass of Infrastrucutre Coming Onshore(t)

150,000

100,000

50,000

0
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Source: OGA & OGUK

DECOMMISSIONING INSIGHT 2021 29

 The two topsides were delivered to CessCon’s new
Decommissioning Facility in Methil, Fife by Allseas’ single-
lift vessel Pioneering Spirit where they were transferred
to Allseas’ Iron Lady barge in the River Forth adjacent to
the facility, before being offloaded across the quay to the
dismantling area.

The contract brought the Allseas’ Pioneering Spirit vessel

to mainland Scotland for the first time with CessCon
decommissioning, dismantling, reusing and recycling up to
23,000 tonnes of material with a reuse and recycling target
of 98% (by weight) of all materials.

CessCon developed a new onshore decommissioning facility

from a brownfield site, took delivery of the assets, and
commenced dismantling and recycling operations in line
with its circular economy strategy within a 12-month period,
while adhering to strict COVID guidelines.

CessCon devised and implemented a new ‘Offshore/

Onshore’ methodology, bringing the best practices in terms
of health and safety and operations offshore into an onshore
environment. The new philosophy was well received by the
workforce and clients, and has helped to increase the safety
performance during the final phase of the decommissioning
lifecycle.

30 DECOMMISSIONING INSIGHT 2021

 Learn more about the
North Sea Transition Deal
and the work of OGUK

www.oguk.org.uk/nstd

Add yourself to our distribution list

email: NSTD@oguk.org.uk
Additional Member Content Available

DECOMMISSIONING INSIGHT 2021 31

7. Appendices

7.1 Maturity of Estimates

Each year UK operators provide the cost classification for each of their decommissioning Figure 16 – Cost Distribution by Estimate Quality
projects using the Association for the Advancement of Cost Engineering (AACE)
classifications. These seek to define the stage of each project and indicate the degree of
uncertainty in the estimates.
100% 0%
4% 3%
Class 4 or 5 estimates mean that the projects are in the early planning stages where the 4%
1%
4%
6%
2%
10% 12%
90% 4%
scope of work is still being defined and feasibility studies are being carried out. Class 5 4% 2%
3% 3%
8%
estimates have an expected accuracy range of -20 to +100 per cent. This range narrows 80% 20%
11%
3%

over time as more work is done to increase the understanding of the work involved. Class 15%
70%
2 estimates represent projects that are in the contracting stage with some activities 43%
already being executed. These have a higher degree of accuracy of between -5 and +20 60% 43%
per cent. 38%
50%
40%
The OGA has been working with industry to improve the reliability of costs estimates for 40%
72%
decommissioning projects within the Asset Stewardship submissions. Now, 73 per cent
30%
of the estimates are class 4 or better with 21 per cent being class 3 or better. This chart
46%
demonstrates a significant improvement in the accuracy of the estimates, after the OGA 20% 37% 36%
placed emphasis on it in 2017, but there is still room for improvement. 10%
27%

0%
2017 2018 2019 2020 2021
Decommissioning Decommissioning Decommissioning Decommissioning Decommissioning
Estimate Estimate Estimate Estimate Estimate
Class 5 Class 4 Class 3 Class 2 Class 1 Actuals Source: OGA

32 DECOMMISSIONING INSIGHT 2021

7.2 Glossary

AACE Association for the Advancement of Cost Engineering In the case of offshore installations, derogation is related
A survey run by the OGA which creates a single source to leaving a structure wholly or partially in place as an
Derogation
Asset Stewardship of robust data. It is used to inform stewardship reviews exemption to the OSPAR convention which generally
Survey and provide meaningful insights into current and forecast prohibits disposal of waste at sea.
activity in the UKCS.
CCUS Carbon Capture Utilisation and Storage DIT Department for International Trade
CGBS Concrete gravity-based structure
CNS Central North Sea
EBN Energie Beheer Nederland
Used to compare options, examine differences and
Comparative E&A Exploration and appraisal
identify the ‘most preferred’ option in the development of
Assessment
decommissioning programmes for:
FPSO Floating production, storage and offload vessel
CoP Cessation of production
HSE Health & Safety Executive
The 2021 United Nations Climate Change Conference,
‘Making safe’ of facilities includes cleaning, freeing
COP26 more commonly referred to as COP26, was the 26th United
equipment of hydrocarbons, disconnection and physical
Nations Climate Change conference
isolation, and waste management. ‘Making safe’ of
Making safe pipelines involves depressurising them and removing any
The Petroleum Act 1998 requires owners to set out the
hydrocarbons. Then the pipelines are cleaned and purged,
measures to decommission disused installations and/or
in line with the cleaning programme based on the specific
pipelines in a decommissioning programme.
Decommissioning needs of the system.
A decommissioning programme must identify all the items
Programme
of equipment, infrastructure and materials that have been A structure laid over or under a pipeline to provide
installed and describe the decommissioning solution for Mattresses
protection, stabilisation or structural integrity.
each.

DECOMMISSIONING INSIGHT 2021 33

 The WBS shows all elements of a typical decommissioning
Netherlands Oil and Gas Exploration and Production Work Breakdown
NOGEPA project and forms the basis for calculating decommissioning
Association Structures (WBS)
expenditure during different stages of the process.

WDON Well Decommissioning Operators Network

NNS Northern North Sea
WG4 Work Group 4
NZTC Net Zero Technology Centre
WoS West of Shetland
OGA Oil & Gas Authority
WDON Well Decommissioning Operators Network
Offshore Petroleum Regulator for Environment and
OPRED
Decommissioning
WG4 Work Group 4
OSPAR is the mechanism by which 15 governments & the EU
OSPAR cooperate to protect the marine environment of the North- UKCS UK Continental Shelf
East Atlantic.

Post-CoP OPEX Operational expenditure after production has ceased.

SNS Southern North Sea

IS Irish Sea

The facilities which sit on top of an installation, typically

Topsides
including drilling, processing and living quarters.

34 DECOMMISSIONING INSIGHT 2021

7.3 Forecast Activity in the UKCS over the next decade – A Detailed Snapshot

Northern North Sea & West Central North Sea Southern North Sea Total UKCS
of Shetland and Irish Sea
Platform Wells 275 325 483 1.083

Number of wells to be Subsea Wells 208 319 55 582

decommissioned Subsea E&A wells 32 51 43 117
Total 515 695 572 1,782
Number of Topsides to be removed 14 18 93 125
Total weight of topside to be removed (tonnes) 260,312 241,467 202,451 704,230
Number of substructures to be decommissioned 9 11 94 114
Total weight of substructures to be decommissioned
167,121 94,592 120,595 87,974
(tonnes)
FPSO weight to be removed (tonnes) 155,005 152,914 20,578 382,308
Subsea structures to be removed (tonnes) 33,565 51,343 3,066 328,497
Number of mattresses for removal 4,886 7,620 4,155 16,661
Length of pipelines, umbilicals and cables to be
1,807 3,701 12,950 18,458
decommissioned (km)

DECOMMISSIONING INSIGHT 2021 35

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36 DECOMMISSIONING INSIGHT 2021