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EY comments on UK National Audit Office report on North Sea decommissioning costs

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Oilfield Technology,

Jon Clark, EMEIA Leader for Oil & Gas Transaction Advisory Services at EY, comments on the recently published report by the National Audit Office identifying UK taxpayers’ potential exposure to £24 billion of North Sea decommissioning costs:

“This is a significant amount which the oil & gas industry is well aware of. The sector’s focus on cost reduction is likely to help to reduce this amount and should be applauded.

“However, there is potential to go further by moving decommissioning up the strategic agenda for stakeholders in this important industry. Strategic collaboration, new commercial models to enable aggregation of decommissioning activity, and fiscal reforms (such as Transferable Tax History) to enhance market efficiency can all make a meaningful impact above reduction of activity cost.

“As the oil & gas industry dynamics evolve, requiring new and different skills for decommissioning, there is also a vital human capital element to this sector which perhaps doesn’t get the attention it deserves relative to the significant financial amounts involved.”

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