DW: Decommissioning firms to benefit from oil price collapse

The oil price collapse has been bad news for nearly every company involved in the industry, but one group that could actually benefit from it are specialist decommissioning companies, Douglas-Westwood, an energy intelligence group, has said in its DW Monday report. 

According to Douglas-Westwood, for these companies there is an opportunity to be part of removing the huge tonnage of infrastructure that exists in the North Sea. With oil prices forecast to remain low, life extension work that has kept many North Sea platforms producing long past their design life no longer makes commercial sense, DW explained. The Dunlin platform (producing since 1978) is an early casualty having been abandoned last year.

Douglas-Westwood’s (DW) new North Sea Decommissioning Market Forecast 2016-2040 predicts that the UK will dominate decommissioning expenditure. Costs could exceed $50 billion using current removal methods or $43bn if SLVs (such as the Pioneering Spirit) are utilised. This $7bn saving, DW said, is due to the number of extra-large platforms that will require removal, which would lead to high costs using current techniques. The most common decommissioning method is reverse installation and while this is well established and safe, it is time consuming, resulting in high costs, said DW.

According to the energy intelligence group, SLVs can complete lifts much quicker, lowering offshore costs substantially. This will only happen however, if the Pioneering Spirit is a success and embraced by the industry, something that will be required before other SLVs are commissioned, DW noted.

DW says it anticipates that 146 platforms will be removed from the UK during 2019-2026 – 51% of all UK platform removals over the forecast. This is, DW explained, due to the high number of ageing platforms in the UK, which have an average age of over 20 years and are uneconomic at current commodity prices, as a result of high maintenance costs and the expensive production techniques required for mature fields. However, DW concluded, many of the largest platforms will remain in place until the 2030s, mainly due to tiebacks that have increased production late in life.

Share this article

Follow Offshore Energy Today

Events>

<< Dec 2019 >>
MTWTFSS
25 26 27 28 29 30 1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31 1 2 3 4 5

Africa Oil Week 2020

For over 25 years Africa Oil Week has been the meeting place for Africa’s most senior E&P stakeholders.

read more >

CERAWeek 2020

 Each year, CERA clients gathered for a few days in Houston…

read more >

Offshore Technology Conference (OTC) 2020

The Offshore Technology Conference (OTC) showcases leading-edge technology for offshore drilling, exploration…

read more >

2020 EXPLORATION AND PRODUCTION STANDARDS CONFERENCE ON OILFIELD EQUIPMENT AND MATERIALS

The development of consensus standards is one of API’s oldest and most successful programs.

read more >

Jobs>

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply