(WO) – Newest evaluation from Westwood World Vitality Group, the specialist power market analysis and consultancy agency, reveals the extent of economic and logistical hurdles for North Sea decommissioning. Political and financial uncertainty has impacted investor confidence within the UK which is accelerating the decline of home manufacturing. Because of this, US$26 billion could possibly be spent on decommissioning within the subsequent decade, with nicely plug and abandonment (P&A) alone accounting for ~50% of the fee.
Evaluation reveals that timing uncertainty is driving monetary and operational dangers for operators, because the decommissioning workload will increase however contract awards are lagging, significantly for rigs. Deferring work scopes may pressure the provision chain’s restricted capability to execute the work. If delays persist and rig availability tightens, nicely P&A prices may climb by as much as US$5.5 billion, because of larger offshore rig dayrates, rising monetary liabilities for each operators and the UK Authorities, which offers tax reduction on decommissioning prices.
“Because the UK North Sea enters a brand new part the place decommissioning turns into the dominant trade driver, the provision chain faces vital demand and main monetary threat,” mentioned Yvonne Telford, Analysis Director at Westwood. “Primarily based on present funding plans, as much as 40% of UK fields may stop manufacturing earlier than 2030. With the influence of decommissioning tax liabilities on abandonment expenditure, cost-effective P&A should be paramount.
Dominic Ferry, CEO at Westwood, added: “Westwood’s new Atlas Decommissioning module offers the readability the market wants by linking infrastructure knowledge with financial forecasts, providing stakeholders a transparent view of the timing, price, and dangers related. By delivering granular insights into decommissioning exercise, the module helps operators, service suppliers, and traders make knowledgeable selections, mitigate monetary publicity, and seize rising alternatives on this evolving panorama.”
The analysis comes as Westwood launches its new Atlas Decommissioning module, offering real-time flexibility for customers providing detailed insights into decommissioning timelines, infrastructure removing and market dynamics. For the primary time, trade gamers will be capable to dynamically mannequin decommissioning schedules based mostly on key financial drivers, similar to commodity costs and working prices, permitting them to foretell shifts in exercise and optimise planning.
