Firms must cut costs to secure key contracts, says energy chief

BP Etap platform (Eastern Trough Area Project) in the North Sea, PRESS ASSOCIATION Photo

BP Etap platform (Eastern Trough Area Project) in the North Sea, PRESS ASSOCIATION Photo - Credit: PA

The region's supply chain companies must cut costs and sharpen their services if they are to take a slice of the burgeoning decommissioning market, an industry leader has said.

Julian Manning, of Baker Hughes. Picture: submitted

Julian Manning, of Baker Hughes. Picture: submitted - Credit: Archant

East of England businesses eyeing the multi-billion pound sector risk losing out to bigger players unless they can put a cost-effective offer on the table, according to the chairman of the East of England Energy Group's (EEEGR) Decommissioning Special Interest Group (SIG).

The warning comes ahead of an event for energy companies in Norwich this week, which will outline more about the decommissioning programme, opportunities for business and what operators are looking for.

The Oil & Gas Authority (OGA), Shell, Oceaneering and Proserv will give presentations about SNS decommissioning, while Magnox will share experience gained in the nuclear decommissioning sector at the event at Sprowston Manor Hotel next Thursday, December 17, between 11am and 3pm.

Julian Manning, of oilfield services company Baker Hughes, said: 'For parts of the supply chain, decommissioning can seem like a hologram. You can see it but when you touch it you feel nothing.

'But it is ongoing and it is real – and it is a fast-changing and evolving part of the life cycle that needs regular engagement to keep abreast of the many opportunities to get involved. Decommissioning in the SNS is a new space for some of the asset owners and unquestionably all are driven to take cost out of the task in hand.

'This clear message of lowering decommissioning costs during planning and execution provides an excellent opportunity for involvement. If the local supply chain can deliver a solid service offering that significantly takes out cost and limits risk, they will be heard.'

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More than 440 fields are either developed, or are in the process of being developed, in the North Sea, with 800 production facilities – fixed or floating platforms or subsea completions – in production or in development.

However, the majority of the pre-1980 structures are now beyond their original service life of about 25 years.

Mr Manning said that asset owners and operators had no 'big pot of money' for decommissioning old or redundant platforms and structures.

'With some 500 wells to eventually be plugged and abandoned, this is an area where cost can be taken out. We already see operators collaborating on identifying opportunities for joint campaigns in order to benefit from efficiency savings,' he added.

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