The British Oil and Gas Authority (OGA) has published a report providing the new cost estimate for offshore oil and gas decommissioning in the United Kingdom Continental Shelf (UKCS). The OGA produced the report in order to reduce uncertainty in the decommissioning costs calculation (namely existing offshore facilities, pipelines, exploration and development wells, suspended open water exploration wells, onshore terminals).
The report sets a new target of at least 35% of costs reduction in the oil industry while the current P50 (50% certainty) decommissioning cost estimate of all UKCS operations is set at £59.7bn (2016 prices, around US$77.4bn). If the industry manages to implement the 35% reduction objective, this figure could be decreased down to £39bn (2016 prices, around US$50.6bn). The cost uses a probabilistic approach, with P10 decommissioning costs reaching £44.5bn and P90 costs reaching £82.7bn.
In order to support this objective, the OGA will monitor the industry's performance and publish an annual progress update report.
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