$100-barrel crude price not enough to save N. Sea industry, warns UK oil chief

 

Bill Cattanach
Bill Cattanach

By DARA BUTTERFIELD

Bill Cattanach of the Oil and Gas Authority (OGA) will give the keynote address at the 5th European Well Abandonment Seminar being held later this month in Aberdeen.

Bill Cattanach OBE is head of PILOT MER UK Secretariat – industry and technology development for the OGA. His presentation will discuss the role the OGA will take in relation to decommissioning in the North Sea with a key focus on the need to control decommissioning’s escalating costs.

He said: “With the current climate in the North Sea, the cost of asset decommissioning is attracting increasing attention, due to the sheer cost and complexity involved in the process.

“More than 5,500 wells, 400 facilities and 10,000km of pipelines will require decommissioning over the next 35 years, at a cost of £50 billion. At a time when making cost efficiencies has taken centre stage, this seminar comes at a crucial time for the industry.”

Shankar Bhukya, Chairman, Society of Petroleum Engineers, Aberdeen, added: “Decommissioning is an extremely expensive process and since introducing this forum 10 years ago, SPE Aberdeen has led the way in sharing knowledge and best practice in this discipline. We are delighted that Mr Cattanach will be sharing his knowledge and experiences at the seminar.”

Looking after upstream oil and gas, Cattanach’s team sits within the Licensing and Consents unit, maintaining close contact with UKCS operators and main contractors to gather intelligence on upcoming offshore projects.

He will also discuss the Pilot project which he is currently leading for the southern North Sea (SNS), looking at well plug and abandonment. While this work is restricted to the SNS it is anticipated working practises and collaborative models can be developed which can then be spread wider throughout the UKCS.

Statoil’s leading plug and abandonment advisor, Steinar Strøm, will outline the major challenges for Statoil’s assets on the Norwegian Continental Shelf, the number of wells due for permanent plug and abandonment in the next 20 years, and how the company intends to ‘attack’ these challenges.

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Commenting last night on the Office of National Statistics figures showing the continuing serious decline in profitability of the N. Sea oil and gas industry, Oil & Gas UK chief executive, Malcolm Webb, said:

 “These shocking figures underline the very serious challenges the sector faces. After more than a decade of spiralling costs, over-taxation and weak regulation, the N. Sea offshore oil and gas industry is now bottom of the league in terms of the cost of producing a barrel of oil and gas. 

“The UK’s difficulties have been greatly exacerbated by the sudden drop in oil price but it would be a grave mistake to believe that the price fall is the cause of the problem.  A recovery in the price, even to $100-barrel, would not resolve matters.”

 

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