Three-quarters of oil firms see $40 as North Sea tipping point

Almost three-quarters of industry participants believe sub-$40-per-barrel oil prices will accelerate decommissioning in UK waters, DecomWorld’s North Sea Late Life Strategy Survey has found.

The tipping point for North Sea decom is $50/bbl in the long term, according to one expert (Image: DecomWorld)

Related Articles

But two experts who spoke to DecomWorld on the back of the survey said decommissioning could not take off immediately because companies lack the cash to fund such activities.

Tom Leeson, Principal Consultant in Well Abandonment at Reverse Engineering Services, said there will be less decommissioning for at least the next 18 months because of cash shortages, but that “a lot of fields” cannot be sustained long term at prices of less than $50/bbl.

UK promise of decom tax relief has industry unconvinced

Members of the offshore oil industry have expressed serious reservations about the British government’s promise of tax relief for vendors that retain decommissioning liabilities.

The 2016 UK Budget has promised tax relief for decommissioning (Image credit: HM Treasury)

Related Articles

Chancellor of the Exchequer George Osborne said in the 2016 budget that the government will provide certainty that companies will be able to access tax relief on their costs when they retain decommissioning liabilities for an asset after a sale. He said the move was designed to encourage new entrants for late-life assets and the development of late-life business models.

Intelligence brief: GoM producer files for Chapter 11; Well management, P&A experts join forces

Decommissioning news you need to know.

Energy XXI has filed for Chapter 11 bankruptcy protection (Image credit: iStock / carterdayne)

Related Articles

GoM producer Energy XXI files for Chapter 11

Gulf of Mexico-focused oil producer Energy XXI has filed for Chapter 11 bankruptcy protection after reaching a deal with noteholders on financial restructuring.

Energy XXI said it believes it has sufficient liquidity, including about $180 million of cash on hand and funds generated from ongoing operations, to continue its operations and support the business in the ordinary course during the restructuring process.

North Sea operators urged to co-develop P&A tech to accelerate gains

North Sea operators can cut plugging and abandonment costs by working with suppliers to develop new technologies which improve well analysis, site access and plug durability, according to a top official from the UK’s oil and gas regulator.

Operators can help reduce P&A costs by co-operating more with suppliers (Image credit: exdez)

Related Articles

By keeping suppliers up to date on any upcoming P&A plans, operators can help their partners to keep costs down, Carlo Procaccini, head of technology at the Oil and Gas Authority (OGA), told DecomWorld.

These things are being discussed, but we need to accelerate,” he said.

Pages