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North Sea gas decommissioning opportunities on the table

PUBLISHED: 09:12 18 March 2011

Companies in the East of England are needed to aid the success of the multi-billion pound business of dismantling and removing North Sea oil and gas platforms as they cease production, the industry was told yesterday.

Five years ago the estimated value of the future decommissioning business was £12bn a year. Today the estimate is £29bn a year, Brian Nixon, chief executive of the trade group Decom North Sea told a seminar in Great Yarmouth yesterday.

In the Southern North Sea alone, there were more than 120 installations which would have to be removed over the next decade.

With only 7pc of decommissioning so far completed, the industry is on the cusp of a massive programme with a much learning to be done, the seminar was told.

“So far we have seen only a few individual one-off projects done in isolation so there is no set standard for the work,” said Mr Nixon. “It is not as straightforward as once thought.”

More than 60 delegates attended an East of England Energy Group (EEEGr) organised seminar in Great Yarmouth.

One of the most vital roles of his group would be to provide reliable market intelligence to the industry and to get the supply chain working with platform operators to find the most effective and efficient way of doing the work.

If the UK supply chain could get in quickly and master the business, their skills could also be exported to decommissioning operations across the world.

Alistair Corbett, BP decom project manager, admitted that the cost to major companies like his would be enormous – and they were looking to supply chain companies to find innovative and cost-effective ways of achieving it.

“The cost to us of decommissioning each North Sea rig could be around £28-29m; we have to have a lot of money in the kitty. There’s nothing in it for us – but there is for you and we want to share it with our own supply chain.”

He said there was still uncertainty about the best mode of removal and the options for dismantling, recycling or reuse of platforms.

Members at the meeting staged by EEEGR, the East of England Energy Group, at the Imperial Hotel, heard that up to 96% of platform parts could be recycled after removal.

EEEGR chief executive John Best said they would play their part in encouraging the supply chain to take up the challenges and they would help supply that ‘reliable’ market intelligence which was so keenly sought.

“Just by bringing expert speakers here to Great Yarmouth has saved around £50,000 it would have cost if we had all travelled to Aberdeen for that expertise,” he added.

• The UK subsidiary of a US oil and gas firm has completed the sale of a gas field in the southern North Sea to Great Yarmouth-based Perenco UK.

Bridge North Sea sold the Durango development, a subsea well brought on stream in 2008, for an initial cash consideration of £5.5m.

In addition and on an ongoing basis, Bridge will be entitled to receive from Perenco 18pc of any profits it generates from a UK petroleum production licence that contains the Durango Field.

The well is already linked to the Waveney platform, which is operated by Perenco and sends gas back to Bacton Gas Terminal on the north Norfolk coast.

Bridge North Sea is a subsidiary of Bridge Resources Corp.

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