After years of discussion, the North Sea oil and gas industry is now reckoning with the practicalities of tackling its mammoth decommissioning obligations.
With over 500 wells overdue for plugging and final abandonment, costs are rising and scrutiny is increasing. Pressure is mounting on operators to safely and efficiently dismantle of legacy infrastructure. Delays are not only costing billions but are threatening the North Sea’s position as a leader in energy transition and decarbonisation, while also making it difficult for those looking to build a business on decommissioning, an exciting but often slow-moving part of the puzzle.
Industry regulator the North Sea Transition Authority (NSTA) recently warned of severe consequences for operators who fall short of their decommissioning targets. As well as It’s a welcome move, because delays to projects risk the supply chain companies moving vessels and specialist resources to more active international markets. If the UK wants to retain its world class decommissioning sector, it needs the domestic projects to go with it.
The industry’s performance has come under significant scrutiny, with shortfalls being highlighted in recent reports. They highlight how bottlenecks, rising costs and policy uncertainty are undermining progress and adding to the already extensive backlog.
The scale of the task ahead is staggering but not impossible. Industry forecasts suggest that more than 1,500 wells will need to be plugged and abandoned between 2026 and 2030. This amounts to around 300 wells a year, a target that the UK fell well short of in 2024, fully decommissioning only 103 wells. Of those 103, Mermaid Subsea Services (UK) was responsible for shutting down 30 of them, a new record for vessel-based decom in the North Sea. Within this was what it is believed to be largest single vessel-based decommissioning campaign, successfully plugging and abandoning 21 wells for a major operator.
The sectors challenges can only be overcome through close industry collaboration, the adoption of new and innovative models and a relentless focus on quick and safe project delivery. Mermaid Subsea’s achievements and record setting campaigns serve as a blueprint for what is possible when solutions are delivered by a committed, expert team of individuals. Rather than reckoning with the size of the challenge, we should focus on helping operators in the North Sea meet their obligations and strengthen the UK’s position as a leader in energy transition.
As pressure mounts on operators to clear an ever-swelling backlog, the need to support decommissioning, a central pillar of efforts to deliver a just transition, is bigger than ever. For Mermaid Subsea, this is an exciting challenge to continue raising the bar by setting a new standard for responsible, world class decommissioning.
References:
North Sea operators 'running out of time' to plug old oil wells - BBC News
North Sea operators warned to step up rig decommissioning - BBC News
Breaking up is hard to do, but lucrative - BBC News
Soaring Decommissioning Costs Add to UK Operators' Woes - Energy Intelligence
North Sea oil and gas claims fact-checked - BBC News