The upside to the downside – upstream and downstream and the benefits from North Sea decommissioning

Upstream and downstream, North Sea decommissioning

Tom WilloughbyEngineering

LONDON, (Reuters) came into my inbox.  Always worth a look, so I did… 


The North Sea is, as we know, one of the world’s oldest oil and gas production basins.  Decommissioning is the future. We also know that with oil prices being virtually halved in the last year, the industry has been searching for ways to reduce expenditure. A lot of assets are up for sale, but as Reuters reports, not many deals have been done.  Part of the reason for this is that any potential buyer is reluctant to take over responsibility for the decommissioning work that will be required. The estimated cost of total decommissioning is c. £50BN, so some consideration is now being given to the selling company retaining the liability in order to sweeten the deal (or even to give it a chance at all).  It is not just an oilfield, it’s potentially a legal minefield.


So, is your North Sea glass half full or half empty?   With the North Sea being the first major offshore basin to go through the decommissioning process, this provides the opportunity for the UK to be at the forefront of developing safe, efficient technology solutions that can be adopted across the world – for example in those parts of the US GOM that are at similar levels of maturity to the North Sea.


Significant manpower will also be involved in North Sea decommissioning.  The picture in Aberdeen is currently somewhat bleak for recruiters. Indeed, engineering headhunters elsewhere in the UK and the world are casting covetous eyes at the talent available, and in many cases willing, to move to another region of the world, or other areas (downstream anybody?) of the industry. 


However, while it’s certainly true that some of those who have made a healthy living from the North Sea are heading for pastures new, when you look at the North Sea as part of the bigger (recruitment) picture, and add in the skills that will develop as the UK becomes a world-leader in decommissioning, then for those more far-sighted recruiters the opportunities are just beginning.  There will be a need for the new decommissioning authority to work with recruiters for expertise to plug not just the wells but also the drain of talent that is currently flowing out of the North Sea.  Those engineers whose skills are better adapted to a move away from north-east Scotland will be (as they increasingly are) available on the world market, while the (occasionally new) skills required for decommissioning can be developed and/or brought in from other geographies or industries.


It will not be easy, but it will be necessary.  Perhaps in a year or so, Reuters will be reporting on the outstanding success of North Sea decommissioning and the part that the recruitment industry has played in achieving a world-leading reputation for the UK and its fledgling Oil and Gas Authority in a new, and of necessity, growing business area for the global oil and gas industry.






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