DECOMMISSIONING

Cambo Oil Field to cut carbon emissions

Some campaigners believe the Cambo oil and gas project off the coast of Shetland should not go ahead. Actually, it would be far worse for the environment if domestic oil and gas production fields like Cambo are halted.

Some 75% of the UK’s energy needs are currently met by oil and gas. The UK government’s advisory body, the Climate Change Committee (CCC), has said the UK will still need oil and gas for decades to come.

Stopping production from fields like Cambo will not stop the need for oil and gas. Instead, the country will have to import it from overseas – frequently from countries with higher emissions and less commitment to act on them.

Retaining domestic production is therefore essential to both ensure the continued supply of the energy we need and to enable us to move faster to a lower carbon future.

But we all know – and agree – that emissions must come down. So, during the time that we still need oil and gas, the key must be to produce them with as low a level of emissions as possible so that we can still heat our homes, run our cars and power our industries as our country moves to lower-carbon energy.

Helpfully, the UK’s changing oil and gas industry has decades of expertise in developing the

technologies that we need to tackle climate change head-on. And we have a plan. Through the North Sea Transition Deal – agreed with the UK government in March this year – we are accelerating home-grown, greener energies and dramatically cutting emissions – not just in our sector, but across the UK.

This was reinforced last week with the publication of the Transport Decarbonisation Plan by the UK government – and the recognition of the need for our sector’s skills and resources for electrification, hydrogen and new biofuels and synthetic fuels.

Over the last eight years, emissions from our industry have fallen by 16%. We will cut them by 50% over the next ten years, and 90% by 2040. By 2050, we will have made the UK Continental Shelf a carbon-neutral basin, reduced emissions by 60 million tonnes – that is the equivalent of taking 2.5 million cars off the road – and we will help the UK achieve its climate goal of net-zero emissions.

Oil and gas produced here in the UK has far a lower emissions intensity than many of the key imports – such as liquified natural gas – and we are committed to do ever better.

Projects like the Cambo field are part of a lowcarbon journey that will support energy security, jobs, the economy and the net-zero future that everyone wants to see.

Like all future UK oil and gas projects, the Cambo field is designed with loweroperating emissions in mind. It has been built 'electrification-ready', with the potential to import renewable power when it becomes feasible in the future. It is in line with the industry’s decarbonisation targets, and it is included in the country’s long-term energy projections.

Production from the Cambo field will help to power the country and be used to manufacture everything from medicines and clothes to laptops and even solar panels. While we are still going to use oil and gas, we should produce it here in the UK from fields like Cambo.

The North Sea Transition Deal will help all other future fields in UK waters become cleaner, with £16 billion worth of investment being unlocked to scale up carbon capture and storage as well as hydrogen.

John Lawrie Metals Strengthens Decommissioning Capabilities with Two New Quayside Facilities

John Lawrie Metals Ltd, the decommissioning and metal recycling experts, has announced two new quayside decommissioning facilities in the North East of Scotland.

Following the issue of full Waste Management Permits direct to John Lawrie, it means the

company now has the capability to receive and process subsea infrastructure and piece small material at both Aberdeen and Montrose Ports. John Lawrie is committed to servicing the increasingly important decommissioning industry and is excited to offer full decommissioning services at these locations.

With its focus on metal processing efficiency and service agility, these new quayside operations will mean the company has the ability to downsize and process material onsite, as well as the potential to ship direct from the Ports with little or no road transportation or haulage required. Both sites will have direct quayside access meaning ease of discharge and handover for client materials and will be managed specifically for subsea structure

and piece small material returns, offering the decommissioning industry two new key locations for landing offshore assets.

By having both the Waste Management and Environmental Authorisations (Scotland) Regulations 2018 Permits in place, the sites are able to accept all types of material produced during a decommissioning campaign.

As the industry moves into a phase of slower production and increased decommissioning activity, it is becoming ever more important to have the right facilities in the right locations available to the market. With an aim of zero to landfill, John Lawrie Metals is the largest metal recycler in the North-East of Scotland, handling around 200,000 tonnes of metal annually.

Innovative thinking to overcome a decommissioning challenge

The Oil and Gas Authority’s (OGA) 2021 Decom Costs report reveals that the estimate has fallen from the original £59.7 billion to £46bn and is on track to hit the target of £39bn by 2023 called for in the 2017 report.

This year’s 4% reduction contributes to a total cut of 23% thus far, an average of almost 6% a year, and in line with what is needed to cut the total cost by 35%.

Importantly, the paper reduction has been matched by a 20% cut in the costs of completed decommissioning projects. Actual decommissioning expenditure in 2020 was £409million lower than estimated the previous year, in comparison to a £170m reduction in 2019 and £432m in 2018. The 2020 reductions were largely due to deferral of activity as a result of Covid-19 and the low commodity price.

The industry is demonstrating a growing culture of continuous improvement, allied to knowledgesharing and learning from experience which is helping it to reduce costs despite the fragmented nature of the market which historically made collaboration difficult.

The report makes it clear that industry must maintain the pace of cost-cutting because the opportunity is immediate; the next 20 years is when most decommissioning will take place and when the reductions must be made.

The OGA’s recently-published Decommissioning Strategy warns that the industry must change its commercial practices to prevent higher costs and focuses on four main strands to achieve savings - planning for decommissioning, commercial transformation – encouraging the supply chain to be more proactive in soliciting

work, supporting energy transition from late life into decommissioning, and technology, processes and guidance.

Since 2017 reductions of 25-35% have been achieved across three of the largest cost categories – well decommissioning, removals and subsea infrastructure. Well decommissioning alone represents 45% of the total cost estimate and removals for a further 25%; and these two categories account for more than £10bn of the overall savings to date.

However, despite the overall positive performance, reductions have begun to slow, and if it continues at the same pace as the past two years, the target will be missed. Therefore, there is a clear need to build on what has already been achieved by capturing remaining opportunities from collaboration and aligned, incentivised contracting.

The OGA has recently relaunched the Pathfinder website which flags up a large and growing number of opportunities for contracts and which encourages collaboration in all projects, including decommissioning work.

Fairfield Decom to Cease Trading

Fairfield Decom has confirmed that it will cease trading in a statement posted on its website.

In the statement, the company’s managing director, Graeme Fergusson, described the decision to stop operations as being “very difficult”.

“This was especially tough given the talented team that has worked tirelessly to bring this unique solution to the market, bolstered by significant support and encouragement from our shareholders, the supply chain, regulators, financiers and industry bodies,” Fergusson said in the statement.

“Although our model was received positively by both operators and the wider industry, it has proven to be difficult for the operators to translate this enthusiasm into action,” he added.

“Despite the industry calling for innovative decommissioning propositions, there is a discernible gap between the rhetoric and the reality. The Fairfield Decom team developed something entirely different – an innovative decommissioning model with integration at its core and a never-seen before commercial proposition. Nonetheless, without a firm commitment from an operator, numerous material offers fell at the final hurdle,” Fergusson went on to say.

In the statement, Fergusson outlined that there must now be a sense of urgency in the decommissioning sector.

“Without the appetite for true commercial innovation and the willingness to move away from conservative working practices, we not only run the risk of higher decommissioning costs but of losing valuable skills and a sustainable supply chain,” he said.

“The next 20 years is poised to see an unprecedented increase in decommissioning activity. While we are naturally disappointed that Fairfield Decom will not be a part of that journey, we urge the industry to step up to unlock the huge potential of the global decommissioning market, thus providing muchneeded opportunities for UK businesses and the highly skilled energy workforce,” he added.

Fairfield Decom was established in 2019 with Heerema Marine Contractors and AF Offshore Decom. The entity brought together an unrivalled track record and expertise to create a unique solution for ultra-late life and decommissioning operations in the North Sea, according to Fergusson.

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