Energy Voice | ‘Frightening picture’ over decom cost uncertainty, says OGA

The head of decommissioning at the Oil and Gas Authority has said operators remain “very uncertain” over their costs for shutting down North Sea assets.

Speaking at Decom Offshore at the AECC, Nils Cohrs said it was a “frightening picture” how uncertain operators were of their costs.

He has been discussing the plan to achieve the target of a 35% reduction in North Sea decommissioning costs to £39billion or less.

He said: “We have the cost categories of level one to five, with five meaning you really don’t have a clue what your cost is going to be.

“For the majority in the next five years, the majority of cost estimates sit in the category five to four range so we’re still very uncertain.

“Can we get a definition on the cost a lot more to the levels three and twos, how can we get there in a shorter period?

“It is a frightening picture when you look at how uncertain we are on forecasted costs.”

Mr Cohrs added that it was not all doom and gloom and confirmed that a decommissioning lessons learned report will be published by the OGA by the end of June.

He added:“It’s still a developing market at the moment, less than 10% of the decommissioning has happened so hopefully with the lessons that are coming this year and next year operators will be more confident in their cost estimates.

“Success breeds success, so the more stories we can share on how operators or supply chain realise that they have done something and the cost has come down, the better.”

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