A new report by the Oil & Gas UK has indicated that offshore decommissioning expenditure is declining as oil and gas companies are gaining expertise and becoming more efficient.
The report predicted that decommissioning costs will stabilise at around £1.5bn per annum. The revised figure is 20% lower than the 2017 forecast.
The UK oil and gas industry is expected to incur decommissioning expenses of around £15.3bn between now and 2027, with 1,465 wells set to be decommissioned during this period.
In comparison with previous estimates, cumulative expenditure up until 2027 has been reduced by £4bn.
More than 950,000t of topsides are planned to be removed across the North Sea, over 605,000t of which will be from the UK Continental Shelf (UKCS).
According to the report, the UK is set to become the largest market for decommissioning expenditure during the outlook period.
Oil & Gas UK decommissioning manager Joe Leask said: “As the decommissioning sector matures, we’re becoming more efficient and our growing expertise is enabling us to plan projects more cost-effectively.
“Our knowledge is continuously expanding and contributing to competitive decommissioning delivery. The efficiency improvements we see in decommissioning reflect what is being achieved across the oil and gas lifecycle and attracting fresh investment in the basin, to extend the life of many assets and increase economic recovery.
“Our focus now needs to be on identifying the areas we excel in, strengthening the share of our local market and then exporting those skills and capabilities into the global market.”
The industry body attributed the reduction in costs to improved productivity and the movement of activity beyond 2027.