Already in some basins, such as the United Kingdom’s continental shelf, low production, falling efficiency, aging assets and rising decommissioning liabilities are making production less attractive. Now, persistently low oil prices are putting pressure on producers to consider the costly and irreversible decision to decommission those structures.
How can both independent producers and international oil companies develop the capabilities and strategies for decommissioning? Is forming a collaboration the answer? And what do organisations stand to save by adopting these approaches? Read the full article on the Oliver Wyman Ideas app or download the PDF.
A breakdown of decommissioning costs
Proportion of total expenditure for each element of decommissioning
*Other includes site remediation, onshore recycling and monitoring
Source: Oil & Gas UK; Oliver Wyman analysis
Defusing the decommissioning time bomb
Oil and gas companies must collaborate to contain the potentially crippling costs of removing offshore facilities.
Thorsten Querfurt, Nic Singleton