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BBC Scotland environment correspondent Kevin Keane reports that North Sea operators are facing potential fines if they continue to procrastinate on decommissioning oil and gas wells. The North Sea Transition Authority (NSTA) has issued a warning, stating that there is a backlog of over 500 wells that need to be plugged, with an estimated cost of £41bn. Failure to address this backlog promptly could result in an additional £4bn in costs. The responsibility for these expenses is shared between the private sector and taxpayers.
There are concerns that delays in decommissioning could lead rig operators and other supply chain entities to move their operations elsewhere, ultimately driving up costs. The NSTA has highlighted the importance of addressing this issue promptly to avoid such repercussions. Pauline Innes, NSTA’s director of supply chain and decommissioning, emphasized the urgency of the situation and urged operators to take immediate action. While NSTA is willing to assist operators as needed, it also stated that it will take a firm stance against persistent delays.
In 2024, only 103 wells reached the final abandonment stage of decommissioning, with work being carried out on 223 others. However, in order to clear the backlog effectively, 300 wells need to be fully decommissioned each year. The Oil and Gas UK (OEUK) industry body acknowledged the challenges posed by decommissioning obligations, citing policy instability as a contributing factor. Decommissioning manager Ricky Thomson highlighted the need for stable regulatory and fiscal frameworks to ensure the safe and efficient decommissioning essential for the UK’s economy and environment.
The industry’s commitment to decommissioning remains strong despite the challenges posed by policy uncertainties and delays. Operators are urged to take swift action to address the backlog of wells requiring decommissioning to avoid escalating costs and potential repercussions for the supply chain. The NSTA stands ready to provide support where necessary but will not hesitate to take measures against operators who fail to prioritize timely decommissioning efforts
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