As many as 50 North Sea oil and gasfields could cease production this year after a collapse in crude prices to 12-year lows, industry experts have warned.
This would accelerate the North Sea’s decline, potentially bringing forward billions of pounds in spending on decommissioning.
Dozens of smaller fields with high production costs that are approaching the end of their lives have been identified by energy consultants Wood Mackenzie as prime candidates to be shut. Halting output is the first step towards abandonment.
This, in turn, could speed up decommissioning — when operators abandon fields and dismantle decades-old infrastructure, including platforms and pipelines.
Wood Mac said oil companies were likely to halt output at 140 offshore UK fields during the next five years, even if crude rebounded from $35 to $85 a barrel. This compares with just 38 new fields that are expected to be brought on stream during the same period.
Industry executives believe the decommissioning industry, still in its infancy, will grow.