The North Sea Transition Authority (NSTA) has started investigating delays in decommissioning wells on the UK Continental Shelf.
Operators are being urged to support the UK supply chain to manage costs and ensure timely decommissioning.
The latest report from the NSTA highlights rising costs due to delays, competition for rigs, and supply chain pressures.
Pauline Innes, the NSTA’s Supply Chain and Decommissioning Director, wrote to operators in November 2023, urging them to speed up plugging and abandoning wells.
Investigations are now underway into failures to meet these deadlines.
Operators must decommission platforms, pipelines, and wells once production stops.
Delays increase costs and emissions. Although the industry reduced decommissioning costs by £15 billion between 2017 and 2022, further reductions have been harder to achieve.
The forecasted expenditure on decommissioning from 2023 to 2032 has risen to £24 billion.
Operators need to balance supply chain capacity with demand. Last year, operators spent £2 billion on decommissioning but completed less work than planned.
Hundreds of wells need decommissioning each year as more fields close.
However, only 70% of planned well decommissioning was achieved last year.
Some operators delay contracts, hoping prices will fall, but this reduces supply chain revenue and capacity.
Rig contractors are seeking opportunities in other regions, risking higher future costs.
Pauline Innes said: “With spending forecast to peak at £2.5 billion per year in the current decade, decommissioning can ensure that the UK’s world-leading supply chain is equipped to help operators clean up their oil and gas infrastructure over the next 50 years and support the carbon storage sector, which will rely on many of the same resources.
“I am concerned that this huge opportunity to safeguard highly-skilled jobs and support the transition will be wasted if operators fail to tackle their well decommissioning backlogs.”
