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North Sea decommissioning: changes afoot?

February 17 - Douglas Westwood's (DW) new publication, the North Sea Decommissioning Market Forecast 2016-2040, considers whether offshore decommissioning will continue to be carried out using heavy lift vessels.

The publication provides a detailed analysis of the amount of infrastructure that needs to be removed in the North Sea over the next 25 years and the associated expenditure.

DW has split the forecast into two different scenarios - one which assumes that decommissioning will continue to be carried out using heavy lift vessels; and another which assess the potential impact that single lift vessels (SLV), like Allseas' Pioneering Spirit, could have on the forecast.

Overall, DW suggests that using single lift vessels could offer major cost savings of around USD12 billion, but only if it is accepted by the industry.

Author of the report, Ben Wilby, commented: "The potential impact of utilising SLVs is huge, with costs savings that will equate to billions of pounds. This is because it will be possible to complete offshore work in one trip, as opposed to the time consuming reverse installation method that pushes costs up. This will all depend on how successful Allseas' Pioneering Spirit is."

DW predicts that the UK will see the removal of 144 platforms between 2019 and 2026, with the UK retaining a high level of spend up until 2040 in both decommissioning scenarios.

"The low oil price environment and age of platforms in the UK are the main drivers of activity," said Wilby. "Operators pushed small fields long past their intended life when oil prices were high, which required life extension techniques that no longer make economic sense.

"Due to the lack of significant improvement (to pre-2014 levels) expected in the oil price over the next five years, operators will instead cease production and begin decommissioning preparations. This will start earliest in the UK, with Norwegian decommissioning activity peaking after 2030."

DW research director and editor, Steve Robertson, added: "Denmark will also contribute to spend over the forecast, though it will differ from that of the UK and Norway owing to the much smaller volume of infrastructure to be decommissioned.

"The decommissioning of North Sea infrastructure presents a sizable opportunity for the specialist decommissioning firms that can work in the harsh environment offshore and can also handle the essential requirements from operators to complete decommissioning projects in a safe and cost effective manner."

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