September 4, 2017 / 11:26 PM / 10 months ago

Britain should seize chance to lead world in oil decommissioning - Treasury

EDINBURGH (Reuters) - Decommissioning of oil facilities in the North Sea over the next decades presents a chance for Britain to become a world leader in the field if firms seize the opportunity, the finance ministry said on Tuesday.

FILE PHOTO: A section of the BP Eastern Trough Area Project (ETAP) oil platform is seen in the North Sea, around 100 miles east of Aberdeen in Scotland, Britain, February 24, 2014. REUTERS/Andy Buchanan/Pool/File Photo

“The North Sea is one of the first regions in the world to start decommissioning on such a large scale,” said Andrew Jones, exchequer secretary to the Treasury, ahead of a visit to the Offshore Europe oil sector conference in Aberdeen.

Britain’s Oil and Gas Authority forecasts that UK oil and gas operators will spend almost 60 billion pounds on decommissioning in the North Sea oil region, off the northeastern coast of Scotland, between now and the 2050s.

Removing, dismantling, cleaning and recycling old oil rigs and pipelines is an obligation of all oil and gas operators in the UK, and as the industry matures decommissioning is an area of opportunity.

“The UK oil and gas industry supports 300,000 jobs, and with up to 20 billion barrels of oil yet to recover, has many productive years ahead. As the need for decommissioning grows, we must seize the opportunity to cement the UK as a world leader in this field and export this knowledge globally,” Jones said.

Around one tenth of old oil and gas facilities have already been removed from the area, and in the next 10 years more than 100 platforms will need to be scrapped and over 1,800 oil wells plugged, according to the Oil and Gas Authority, a trade body.

Tax relief from the government covers around 40 percent of the total cost of decommissioning for UK companies, the Treasury said.

Reporting by Elisabeth O'Leary; Editing by Susan Fenton

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