North Sea decision could cost billions

Government plans to ban offshore disposal of steel platforms in the North Sea could add several billion pounds to the UK’s decommissioning bill. Environment minister Michael Meacher last week announced that the 60 large steel platforms in the UK North Sea would be removed at least down to their footings and brought ashore for disposal. […]

Government plans to ban offshore disposal of steel platforms in the North Sea could add several billion pounds to the UK’s decommissioning bill.

Environment minister Michael Meacher last week announced that the 60 large steel platforms in the UK North Sea would be removed at least down to their footings and brought ashore for disposal.

He said: ‘The new UK position is no dumping and no toppling of large steel installations.’

The Offshore Decommissioning Communication Project, set up by the oil industry in 1996, estimates that it will cost £12.2bn to remove all installations from the UK sector one-and-a-half to three times the cost of partial removal.

Industry minister John Battle said: ‘Careful analysis of the science, technology and costs involved convinced me that it will be practicable to remove the majority of every big steel structure.’

Meacher suggested that in many cases this would include the footings heavy steel and concrete structures that act as a sheath for the piles that hold the platforms to the sea bed. The Government will meet up to 70% of the cost of decommissioning, through tax relief.

The UK Offshore Operators’ Association said it was disappointed with the change of position. James May, UKOOA’s director-general, said: ‘I am concerned the Government’s position may not be flexible enough to ensure that the best solutions can be found.’

The change of policy is good news, however, for large offshore contractors such as Amec, Brown &Root, and Kvaerner. ‘It makes for a more valuable decommissioning business, certainly,’ said a source at one firm.

The Government will present its proposal to the ministerial meeting of the Ospar convention on sea pollution at Sintra in Portugal this week. Britain’s change of approach is clearly designed to appease the other signatory countries, which, apart from Norway, have in the past insisted on the total removal of disused oil and gas installations.