North Sea operators ‘operating out of time’ to plug outdated oil wells | EUROtoday

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Kevin Keane

BBC Scotland surroundings correspondent

Getty Images Several oil rigs stacked up in the Cromarty FirthGetty Images

NSTA warns that rig operators will search work abroad if delays proceed

North Sea operators have been warned that they may very well be fined in the event that they proceed to delay on the decommissioning of oil and fuel wells.

Industry regulator the North Sea Transition Authority (NSTA) mentioned companies have been “running out of time” to sort out a backlog of greater than 500 wells to be plugged.

The value – estimated at £41bn – is shared between the non-public sector and the taxpayer. It mentioned that additional hold-ups would value an additional £4bn.

Offshore Energies UK (OEUK) mentioned “policy instability” within the business had created uncertainty, however mentioned the sector was nonetheless dedicated to decommissioning.

When an oil effectively involves the tip of its life, its operator has a accountability to completely decommission it.

NSTA started an investigation after figuring out a whole bunch that had missed plugging deadlines.

It mentioned that any delays threat rig operators and others within the provide chain shifting their vessels out of the North Sea to hunt work elsewhere.

The regulator mentioned that this may push up the prices in the long term.

Getty Images A line of rigs stacked up in the water with two small boats in the foreground and a sky of dark cloudsGetty Images

There usually are not sufficient rigs in UK waters to hold out the forecast decommissioning work

If the backlog will not be addressed, NSTA mentioned there may very well be greater than 1,000 further wells due for decommissioning by the tip of the last decade.

Pauline Innes, NSTA director of provide chain and decommissioning, urged operators to behave instantly.

She mentioned: “The stark reality is that operators are running out of time to get to grips with the backlog as more contractors consider taking their rigs abroad, which damages the supply chain’s ability to meet demand and remain cost competitive.”

She mentioned NSTA was ready to assist operators when crucial however would “get tough” on those that regularly delay.

Significant uncertainty

In 2024, solely 103 wells have been decommissioned to the ultimate abandonment stage with some type of work being carried out on 223 wells.

But 300 have to be absolutely commissioned annually if the backlog is to be cleared.

Industry physique OEUK mentioned companies have been actively progressing their decommissioning obligations however that it was a posh endeavor.

Decommissioning supervisor Ricky Thomson mentioned: “Policy instability, including the Energy Price Levy and pauses in the Environmental Assessment process, has introduced significant uncertainty for the sector resulting in project delays and cost increases.

“The sector is working with the federal government to offer secure regulatory and monetary frameworks to proceed delivering secure, environment friendly decommissioning important to the UK’s economic system, surroundings, and long-term power future.”

https://www.bbc.com/news/articles/cn4101grdxvo