Companies have a legal duty to decommission platforms and pipelines in a safe and cost-efficient manner once production operations have permanently stopped at their oil and gas fields.
Decommissioning work has been taking place in the North Sea since the early 1990s and in the past decade has become a mainstream activity which generates billions of pounds of spending annually.
While decommissioning is regulated by central government, the North Sea Transition Authority engages with companies in the years prior to production ceasing – providing guidance and setting clear expectations – to ensure that decommissioning plans are developed in a way that minimises costs and supports the energy transition.
In consultation with industry, we set targets for lowering overall decommissioning costs for North Sea infrastructure in order to reduce the burden of tax reliefs on the Treasury, with strong progress made in recent years. Money saved by operators can also be invested in new production and emissions reduction projects. We report on decommissioning performance and work with other industry groups to capture and share learnings – and promote collaboration.
In addition, we work with licence holders to identify and prioritise opportunities to repurpose offshore oil and gas infrastructure for energy transition projects, such as carbon capture and storage and hydrogen. There is potential for a number of pipelines in particular to be repurposed, possibly saving industry billions of pounds.
The NSTA is also the regulator for well decommissioning, which is forecast to make up almost half of the total cost of decommissioning.