Decommissioning Discussion Dinner

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Exploring both the lack of PE investment in decommissioning and also how the market may evolve to tackle large scale projects that engage the full supply chain.

John Cameron and Stephen Sheal of FWB Park Brown, together with Roger Esson (CEO of Decom North Sea) and Jim Christie (Head of Decommissioning, OGA), hosted a dinner for thirty people representing a mix of industry experts and investors at Granite Park restaurant in Aberdeen.

The intent of the evening was to explore why there is a lack of private equity investment in decommissioning and how the decommissioning market is likely to evolve to tackle large scale projects that engage the full supply chain.

The presentations from both Roger and Jim stressed the importance of a continued focus on the MER (Maximising Economic Recovery) agenda and late life asset management, however highlighted the need for effective planning around future decommissioning activity. There was recognition that decommissioning businesses may struggle to attract investment in the short term, due to the perceived continual delaying of projects and advancements of new technologies that have a positive impact on maximising economic recovery.

Jim Christie highlighted that the UK oil and gas industry remains largely unfamiliar with large scale decommissioning projects but believes that as an industry we must recognise that much can be learned from other sectors and industries and not to be naïve in the belief that we will naturally evolve into global experts on the subject.

Whilst the debate brought up many different opinions and views, it was agreed that in the short term the focus must continue to be geared toward MER. As an industry that has been criticised for its lack of collaboration, the Late Life Planning Portal (L2P2) that encourages companies to share learnings and information aligned to the decommission agenda, was praised as an important step forward as it brings together operators, regulators and the supply chain to create the co-operative environment required by the decommissioning industry.

From an investment perspective, whilst there remains a hesitancy to focus on this particular sector, it was felt there were opportunities to explore investment opportunities in technologies that tackle well plugging and abandonment as per Limerock’s recent involvement in Ardyne Technologies.

Overall an interesting and enlightening evening was had by all in attendance, with an overriding sense of the importance of knowledge sharing and working together to help establish the UK as a global leader in decommissioning best practice.

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