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The National
3 days ago
- Business
- The National
North Sea oil firms warned of fines over well decommissioning delays
The North Sea Transition Authority (NSTA), the industry regulator, said firms are "running out of time" to address a backlog of more than 500 wells needing to be plugged. The estimated cost of decommissioning these wells is £41 billion, which is shared between the private sector and the taxpayer according to BBC reports. READ MORE: 'No way' convicted felon Donald Trump should be welcomed in Scotland, Greens say Further delays could add £4 billion to the total cost, the NSTA warned. When an oil well reaches the end of its productive life, the operator is responsible for permanently decommissioning it. NSTA launched an investigation after identifying hundreds of wells that had missed their plugging deadlines. The regulator said the delays risk rig operators and supply chain companies relocating their equipment and personnel to other regions. If that happens, the regulator believes future decommissioning work in the North Sea would become more expensive. Currently, there are not enough rigs in UK waters to carry out all the forecasted decommissioning work. If the backlog continues, NSTA warned that more than 1000 additional wells could require decommissioning by the end of the decade. Pauline Innes, NSTA's director of supply chain and decommissioning, called on companies to act without delay. She said: "The stark reality is that operators are running out of time to get to grips with the backlog as more contractors consider taking their rigs abroad, which damages the supply chain's ability to meet demand and remain cost competitive." She added that while NSTA is willing to support firms, it will "get tough" on persistent delays. READ MORE: Lesley Riddoch: The SNP must take up zonal pricing fight – why aren't they? In 2024, only 103 wells were decommissioned to the final abandonment stage, with some form of work completed on 223 wells. However, 300 wells per year need to be fully decommissioned to clear the backlog. Industry body Offshore Energies UK (OEUK) said businesses are working to meet their obligations, but challenges remain. Decommissioning manager Ricky Thomson said: "Policy instability, including the Energy Price Levy and pauses in the Environmental Assessment process, has introduced significant uncertainty for the sector resulting in project delays and cost increases." He said the sector is working with the Government to ensure stable regulatory and fiscal conditions for safe, efficient decommissioning.
BBC News
3 days ago
- Business
- BBC News
North Sea operators 'running out of time' to plug old oil wells
North Sea operators have been warned that they could be fined if they continue to delay on the decommissioning of oil and gas wells. Industry regulator the North Sea Transition Authority (NSTA) said firms were "running out of time" to tackle a backlog of more than 500 wells to be cost - estimated at £41bn - is shared between the private sector and the taxpayer. It said that further hold-ups would cost a further £4bn. Offshore Energies UK (OEUK) said "policy instability" in the industry had created uncertainty, but said the sector was still committed to decommissioning. When an oil well comes to the end of its life, its operator has a responsibility to permanently decommission began an investigation after identifying hundreds that had missed plugging said that any delays risk rig operators and others in the supply chain moving their vessels out of the North Sea to seek work elsewhere. The regulator said that this would push up the costs in the long run. If the backlog is not addressed, NSTA said there could be more than 1,000 additional wells due for decommissioning by the end of the decade. Pauline Innes, NSTA director of supply chain and decommissioning, urged operators to act said: "The stark reality is that operators are running out of time to get to grips with the backlog as more contractors consider taking their rigs abroad, which damages the supply chain's ability to meet demand and remain cost competitive."She said NSTA was prepared to help operators when necessary but would "get tough" on those who continually delay. Significant uncertainty In 2024, only 103 wells were decommissioned to the final abandonment stage with some form of work being carried out on 223 300 need to be fully commissioned each year if the backlog is to be body OEUK said businesses were actively progressing their decommissioning obligations but that it was a complex manager Ricky Thomson said: "Policy instability, including the Energy Price Levy and pauses in the Environmental Assessment process, has introduced significant uncertainty for the sector resulting in project delays and cost increases. "The sector is working with the government to provide stable regulatory and fiscal frameworks to continue delivering safe, efficient decommissioning essential to the UK's economy, environment, and long-term energy future."
