In line with the Petroleum Act 1998, when the production of gas and oil comes to an end, facilities must be dismantled – or decommissioned – and the surrounding area must be restored to its initial condition. According to a 2018 report from Oil & Gas UK, the representative body for the offshore oil and gas industry, the UK currently accounts for one-third of decommissioning expenditure across the 12 top markets. Such a high level of expenditure has raised concerns (see further reading links below), but it does provide an opportunity to be a world leader in terms of expertise, technology and regulation. The government has pledged to support the industry to take on that world-leading role.
From March to May 2019, the government ran a consultation to identify what can be done to strengthen Scotland and the UK’s position as a global decommissioning hub. The call for evidence focused on improving capability for the UK market, reducing costs and exporting expertise. The feedback is still being analysed.
Given that the government has conducted a consultation on how to shape the UK decommissioning industry, this policy can be moved to ‘in progress’. We’ll track the next steps closely to see what government support for the industry emerges, so follow this policy to stay tuned!
Develop a world-leading mind – get the details!
- Watchdog questions UK’s oil decommissioning tax relief estimate – Reuters.com
- Taxpayers pouring billions into North Sea oil and gas decommissioning: It’s an oil slick on the public finances – The Independent
- Oil and gas in the UK – offshore decommissioning – NAO
- Public cost of decommissioning oil and gas infrastructure inquiry – Public Accounts Committee
- Business Outlook Report – Oil and Gas UK
- UK government backs Shell’s plan to leave some North Sea installations in place, despite German concerns – Unearthed (Greenpeace)