North Sea Transition Authority begins investigations into oil well decommissioning delays

Failure to meet targets is adding pressure to supply chains and budgets, with costs mounting significantly. 

Fossil fuel companies operating in the North Sea were contacted by Pauline Innes, Supply Chain & Decommissioning Director of the North Sea Transition Authority [NSTA], who urged them to speed up plugging and abandoning wells. 

Costs of this work fell by £15billion between 2017 and 2022, but forecasts now predict this to rise by £24billion over the coming decade. £2billion was spent last year alone, with less work carried out than had been planned – with 70% of the wells that were due to be decommissioned taken offline and secured. 

According to reports, inflationary pressures had led to several operators postponing decommissioning work in the hope prices would begin to fall. However, in doing so the NSTA has warned that the supply chain is being negatively impacted, reducing the ability of firms to invest in capacity and resources, further obstructing the decommissioning process.  

‘Pockets of operators’ are continuing to ‘perform admirably’, according to the NSTA. However, the majority ‘need to improve by doubling down on their planning’. Fines of up to £5million can be imposed on companies failing to comply. While the assessment focuses on plugging and abandoning North Sea oil wells, concerns have also been raised about the number of rigs and platforms that are now standing unused. One investigation by Follow the Money showed that as of last May 2023 the North Sea was home to around 23,000 fossil fuel industry ‘objects’ in need of decommissioning.  

‘With spending forecast to peak at £2.5 billion per year in the current decade, decommissioning can ensure that the UK’s world-leading supply chain is equipped to help operators clean up their oil and gas infrastructure over the next 50 years and support the carbon storage sector, which will rely on many of the same resources,’ said Innes. ‘I am concerned that this huge opportunity to safeguard highly-skilled jobs and support the transition will be wasted if operators fail to tackle their well decommissioning backlogs.’ 

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Image: Galen Crout