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Less offshore energy decommissioning work carried out in UK last year despite higher spend

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OEUK’s annual offshore decommissioning report said only 126 wells were decommissioned in 2023 (Andrew Milligan/PA)
OEUK’s annual offshore decommissioning report said only 126 wells were decommissioned in 2023 (Andrew Milligan/PA)

Less offshore decommissioning work was carried out last year despite the overall amount of money being spent on the activity increasing, the industry has said.

Offshore Energy UK (OEUK) said £1.7 billion was spent on decommissioning in the UK continental shelf in 2023, up slightly from the previous year.

OEUK’s annual offshore decommissioning report said only 126 wells were decommissioned in 2023, compared to 139 in 2022.

Ricky Thomson, author of the report, told journalists a “step change” is needed in coming years as just over 2,050 wells are expected to be decommissioned in the next decade — more than 80 per cent of active well stock.

Complicating the progress is the fact that many of the ships and facilities used in oil and gas decommissioning are also needed for offshore wind installation, with Mr Thomson saying this creates a “direct clash” between the two industries.

He said innovation is needed to attract more heavy-lift ships to UK waters.

Cost inflation, combined with political and fiscal uncertainty, made it more difficult for businesses to spend money in decommissioning, he said, though 2023 also involved some more difficult projects being undertaken.

Mark Wilson, operations director at OEUK, said: “Last year’s report discussed the big challenges ahead, from the influx of renewable projects vying for the UK supply chain’s resources, to the uncertain political and fiscal landscape that chilled investment.

“The predicted upsurge in decommissioning activity has landed, even if a damp squib: the spend has risen slightly in 2023 but activities across the decommissioning work breakdown structure (WBS) have tumbled.

“In short, the UK has spent more money doing less work in 2023.

“The macroeconomic factors at play cannot be ignored: cost inflation, political risk and competition for resources have all made it harder to do business.”

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