More than 2,000 oil and gas wells are expected to be shut down in the North Sea in the next decade at a total cost of about £20 billion ($23.75 billion), an industry report has said.
In its annual Decommissioning Insight report, Offshore Energies UK says an upsurge in decommissioning activity has begun and is expected to continue over the next three years.
It estimates about 2,100 North Sea wells will be deactivated over the next decade.
OEUK says a number of decommissioning projects have been brought forward, meaning the cost has increased from an estimated £16.6 billion last year.
Ricky Thomson, OEUK’s decommissioning manager, said the sector was "snowballing" and this surge in deactivation was expected to continue for years.
“But this poses a challenge as well as an opportunity," he added. "The growth of renewables and demand for decommissioning services and expertise will create increasing pressure for resources.
“This is a great problem to have and it’s vital this opportunity is properly managed across the sector so that UK firms can capture the lion’s share of this £20 billion opportunity.
“With the right support from government and action from the industry, the UK could make major gains from decommissioning, as well as retain thousands of jobs for this growing sector.”
The report says decommissioning work in the North Sea is expected to continue until about 2070.
The regulator, the North Sea Transition Authority, said the industry should expand on its progress in lowering the cost estimates for decommissioning work.
It wants the bill for all decommissioning work reduced to £33.3 billion.
“We have rightly praised industry for the work it has already done to save billions of pounds on decommissioning but now is the time to press home the advantage," said Pauline Innes, the NSTA’s head of decommissioning.
“This new target will help keep up momentum and strengthen our industry’s reputation for safe, efficient and economical offshore project execution.”
The proportion of spending on decommissioning in companies' budgets is set to rise from 14 per cent this year to 19 per cent by 2031.
More than 75 per cent of Britain's total decommissioning spending will be on wells in the central and northern North Sea.
UK Chancellor Jeremy Hunt last week announced an increase in windfall tax on North Sea oil and gas producers from 25 per cent to 35 per cent, bringing total taxes on the sector to 75 per cent, among the highest in the world.
OEUK has also warned that the growing number of oil and gas workers turning to the fast-growing offshore wind industry could create a shortage of skilled workers for decommissioning.
Oil and gas production in the North Sea, a major deepwater production hub since the 1970s, has been in steady decline since peaking at about 4.4 million barrels per day in the 1990s.
Company%20profile
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Who has been sanctioned?
Daniella Weiss and Nachala
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Harel Libi & Libi Construction and Infrastructure
Libi has been involved in threatening and perpetuating acts of aggression and violence against Palestinians. His firm has provided logistical and financial support for the establishment of illegal outposts.
Zohar Sabah
Runs a settler outpost named Zohar’s Farm and has previously faced charges of violence against Palestinians. He was indicted by Israel’s State Attorney’s Office in September for allegedly participating in a violent attack against Palestinians and activists in the West Bank village of Muarrajat.
Coco’s Farm and Neria’s Farm
These are illegal outposts in the West Bank, which are at the vanguard of the settler movement. According to the UK, they are associated with people who have been involved in enabling, inciting, promoting or providing support for activities that amount to “serious abuse”.
The specs
Engine: 2.0-litre turbo 4-cyl
Transmission: eight-speed auto
Power: 190bhp
Torque: 300Nm
Price: Dh169,900
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Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
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The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
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Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
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Power: 220 and 280 horsepower
Torque: 350 and 360Nm
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Disposing of non-recycleable masks
Use your ‘black bag’ bin at home
Do not put them in a recycling bin
Take them home with you if there is no litter bin
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MATCH INFO
Cricket World Cup League Two
Oman, UAE, Namibia
Al Amerat, Muscat
Results
Oman beat UAE by five wickets
UAE beat Namibia by eight runs
Namibia beat Oman by 52 runs
UAE beat Namibia by eight wickets
UAE v Oman - abandoned
Oman v Namibia - abandoned
The biog
Favourite hobby: taking his rescue dog, Sally, for long walks.
Favourite book: anything by Stephen King, although he said the films rarely match the quality of the books
Favourite film: The Shawshank Redemption stands out as his favourite movie, a classic King novella
Favourite music: “I have a wide and varied music taste, so it would be unfair to pick a single song from blues to rock as a favourite"
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
