Britain’s North Sea operators have been ordered to tackle hundreds of abandoned wells drilled around UK coasts amid fears they could pour polluting oil and gas into the sea.
The North Sea Transition Authority (NSTA), which regulates the industry, has threatened to fine them millions of pounds if they continue to shirk the job.
It found there are up to 1,000 wells which have the potential to leak oil and methane into UK waters – a risk that will persist forever unless they are permanently plugged. Some are drilled thousands of metres into bedrock, making plugging them even harder.
The NTSA also warned that many of the drilling rigs needed to find and seal abandoned wells are being pulled out of the North Sea because windfall taxes and new regulations imposed by the Government are wiping the UK industry out.
“By law, operators must decommission oil and gas infrastructure, including permanently inactive wells, to protect the marine environment … A backlog of more than 500 wells which missed their decommissioning deadline has built up and – unless operators quickly ramp up their activities – the figure could grow considerably,” the NSTA said.
“In excess of 1,000 additional wells are expected to be due for decommissioning between 2026 and 2030.”
It added: “Operators must immediately start tackling their backlog of wells that are already due for decommissioning to stop rigs leaving the North Sea and prevent billions of pounds of additional costs for themselves and taxpayers.
“Some companies are showing good performance in meeting their regulatory duty to decommission wells which have permanently stopped producing, but too many have delayed this work and fallen behind.”
The NSTA did not name the main culprits, but its ruling applies to all companies operating around the UK now or in the past.
Larger companies like Shell and BP, which were once amongst the most active in the North Sea, are thought to have a better record than the multitude of smaller companies that now dominate the UK offshore sector.
Cost of decommissioning
The UK oil and gas industry has been operating for nearly 60 years, during which time an estimated 8,000 holes have been drilled deep into the seabed in areas suspected of containing fossil fuels.
Some were successful, leading to commercially viable reserves, but most were either dry or contained too little oil or gas to be worth exploiting.
Such wells are temporarily sealed but must later be permanently plugged with marine cement that will prevent oil or gas from bubbling up into the sea at a later date. Subsea surveys have already shown that many such abandoned wells are leaking fossil fuels into the sea.
However, the cost of decommissioning will likely soon outstrip the income generated by the UK’s shrinking oil and gas reserves.
Offshore Energies UK, a trade body, has estimated that it will cost around £25bn to decommission the redundant wells, pipelines and platforms spread across the UK’s North Sea, Irish Sea and eastern Atlantic waters over the next decade.
Pauline Innes, from the NSTA, said: “The NSTA is pulling every lever at our disposal to encourage operators to decommission more wells more quickly. We are willing to help operators when that is necessary but equally, we are prepared to get tough on those who continually frustrate and delay.
“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.”
Offshore Energies UK, the trade association for the UK’s offshore energy industry, said decommissioning projects had been thrown into turmoil by the UK’s political instability in recent years.
Ricky Thomson, decommissioning manager, said: “Decommissioning offshore structures is complex and demands close collaboration across operators, regulators, and the supply chain.
“Policy instability, including the Energy Price Levy [windfall tax] and pauses in the environmental assessment process, have caused project delays and cost increases.
“The sector is working with stakeholders to provide stable regulatory and fiscal frameworks to continue delivering safe, efficient decommissioning.”
“When you share your news through OGV, you’re not just getting coverage – you’re getting endorsed by the energy sector’s most trusted voice.”
