Tom Leeson takes a look at the decommissioning sector – he believes the future is bright for a segment which, in truth, is still in its infancy
Aquick glance at the news right now illustrates that we are living through interesting times as the price of Brent Crude – and E&P activity – begins to rise again. However, from a decommissioning standpoint, the fundamentals are the same; North Sea oil and gas is still flowing, facilities still need to be maintained and decommissioning activity will still happen.
With a large number of projects currently under consultation with the regulators, decommissioning programme approvals are anticipated to increase significantly between now and 2020. However, we can’t expect this to necessarily convert directly to a similar number of North Sea decom projects. In the past year, we’ve seen an uptake in the sale and purchase of mature assets, with the expectation of field life extension. Naturally, this can lead to questions regarding the future of North Sea decommissioning. This doesn’t mean decommissioning is taken off the table, it simply moves that uncertainties regarding the timing of cessation of production and subsequent decommissioning activities remain, with some programmes likely to be delayed. This is highly positive, in line with MERUK, and ultimately good for the wider industry.
Regardless of the outcome of any changes that take place over the coming weeks, months and years, the UKCS decommissioning sector will still be required to access equipment and knowledge from Europe and across the globe, and in turn provide our services to those markets, as our expertise increases.
With more than 90 per cent of North Sea decommissioning yet to take place, these are still relatively early days; there are lots of decommissioning lessons yet to learn and share, and a focus on this area is expected to yield considerable benefits. Equally, this means there are lots of opportunities yet to present themselves.
In other words, for us at Decom North Sea, the overarching objective does not change; we will continue connecting capability with opportunity and working to achieve cost-efficient decommissioning solutions.
Our most recent initiative has been the formation of the Decommissioning Leadership Group (DLG). Providing strategic leadership to our Board of Directors, the DLG will lead the strategy, direction and agenda of Decom North Sea, ensuring we continue to be as connected to members as possible, fulfilling their needs to the best of our ability. It will also work closely with industry bodies and will be a primary opportunity for our members to contribute to and shape the development of the decommissioning sector to meet the changing needs of the industry.
First edition of Guidelines
Our Decommissioning Directory, which was launched earlier this year in conjunction with Scottish Enterprise and the Oil & Gas Authority will also be fundamental to this. As the sector continues to evolve, the directory allows both operators and the supply chain to plan for the future, identify potential consortiums and manage supply peaks by categorising supply chain companies by key activity, capability, case history and geography.
The directory also provides an understanding of whether companies provide this service as part of their core business, integrated services or whether they sub-contract the work; it will assist in identifying alternative contracting and commercial arrangements, ensuring the supply chain is ready to optimise the opportunities that arise.
In conjunction with the directory, Decom North Sea has commissioned a number of initiatives designed to improve the planning of environmental assessment and waste management during the decommissioning process.
The Environmental Appraisal Guidelines, published in draft for industry consultation in 2017, aim to provide practical advice and a framework for robust environmental appraisal that is proportionate to the nature of the decommissioning activities proposed and the level of detail available at the decommissioning programme submission stage.
Having been developed in close liaison with BEIS (the Department of Business, Energy & Industrial Strategy) and a major North Sea operator and having now been subject to extensive review and comment by practitioners in the sector, I am confident that the first edition of guidelines, released in July, are truly aligned to industry and stakeholder processes, and therefore invaluable to those navigating the environmental implications of decommissioning.
Understanding and appreciating the issues involved with managing the various waste streams from decommissioning has also driven us to develop (in close consultation with BEIS, SEPA, the Environment Agency (EA) and the HSE), the Managing Offshore Decommissioning Waste Guidelines. Currently published in draft for consultation, these concentrate upon the numerous regulations, regimes and consultations required in the safe and effective management of materials and wastes generated by offshore decommissioning.
Complexity is inherent in offshore decommissioning waste management. Highly regulated processes need to be adhered to for very good reason; waste management does more than protect the environment; it reduces risks to human health. Therefore, it is critical that waste is managed and reported correctly, via access to best practice and lessons learned. This is something our Guidelines, which will be updated regularly, will reflect. All of the current initiatives lead me to truly believe that we are now better placed to understand how to approach the challenges of late life operations through end of production and into decommissioning. As a result, we are more equipped to further support our members in servicing the UK / UKCS decommissioning sector in an environmentally sound, cost-effective and time-efficient manner.
There is little doubt that the future of the decommissioning sector is bright, and I have great confidence that we are in good shape to help remove the roadblocks and build strong foundations for operators, supply chain and regulators alike to benefit from the opportunities that arise.
Decom North Sea
Tom Leeson is Decom North Sea’s interim Chief Executive. Decom North Sea is the single topic, multi region membership organisation which connects capability with opportunity across the oil and gas decommissioning sector. As a not for profit organisation, Decom North Sea is working to enhance knowledge transfer and facilitate collaborative activities to deliver ‘innovative models’ that minimise decommissioning costs, ensuring best value for tax payers and maximising business potential for its member companies.
For further information please visit: www.decomnorthsea.com