Lowestoft energy boss urges action to make region a decommissioning ‘centre of excellence’
10:00 22 August 2012
Charles Hodge Photography,Lowestoft, 01502 500272 ©Charles Hodge Photography
A leading energy industry boss is urging the government to slash red tape and back the East in its quest to become “a centre of excellence” in the decommissioning industry.
Martin Jolley, managing director at AKD Engineering, wants to cut back the time it takes to decommission an oil and gas platform to help the region harness a potential £8bn industry in the North Sea.
The plea comes as the company looks to become one of the first businesses in the world to offer a “one-stop shop” for retiring platforms through its new alliance with American company Tetra.
But Mr Jolley has warned that local businesses will need to show the world that they are leading the way in the industry, if they want to draw investment, and secure the “massive opportunity” to create hundreds of new jobs.
“We could become known as the decommissioning centre,” Mr Jolley said.
“Great Yarmouth outer harbour and Felixstowe port could play a major part in this programme.
“We could get firms relocating from all over the world to learn about the industry if we become a centre of excellence.
“We need support from the Department of Energy and Climate Change because when we decide to decommission a platform it can take up to two years, but in the Gulf of Mexico companies can do it in a month.
“Meanwhile, we also need to work with our local politicians to try and get local companies to show what the East has got to offer the decommissioning world.
“There could be a massive opportunity for employing hundreds of people here.
“I think the opportunity for the east coast of England is phenomenal, but you have got to have the will to do it.”
AKD Engineering, based at Horn Hill Lowestoft, decommissioned five gas platforms between 2008 and 2010 in the Shell Leman Field six miles off the Norfolk coast. The deal was worth approximately £12m.
Now, the company is working on a joint venture with Tetra, which has decommissioned more than 1,000 wells in the Gulf of Mexico.
Together, they hope to capture the North Sea market by combining Tetra’s expertise of plugging wells below sea level, with AKD’s experience of disposing of platforms above water.
At present, the alliance has launched a bid to decommission four wells in the North Sea operated by the oil and gas production group, Tullow.
AKD, which employs 120 people and is forecasted to make £15m turnover this year, estimates that each North Sea decommissioning project is worth between £1m and £6m, with the potential of working on more than 500 platforms in the next 25 years.
Simon Gray, East of England Energy Group (EEEGR) chief executive, said the potential scale for decommissioning and recommissioning work in the East cannot be ignored. He said: “It’s not long since joint research by Deloitte and Douglas-Westwood suggested a £47.5bn business opening up in the North Sea.”