Decommissioning fund launched

A new £5 million fund will provide opportunities for the supply chain in Scotland to benefit from the decommissioning of North Sea infrastructure.

The Decommissioning Challenge Fund (DCF) will support infrastructure upgrades and innovation in salvage and transport methods at Scotland’s ports and harbours. It will also encourage engineering scoping work at key sites to build business cases that will attract further private investment.

The news comes as Shell plans to apply to begin decommissioning its Brent oil field.

First Minister Nicola Sturgeon launched the Fund today at Sparrows, an Aberdeen based supply chain company with expertise in decommissioning that has just secured a  major contract to provide 102 cranes to Scottish Power. The First Minister also visited exploration technology specialists Zilift Ltd.

Alongside the Decommissioning Action Plan, launched by Scottish Enterprise and Highlands and Islands Enterprise last year, the Fund will help Scotland's oil and gas sector make the most of decommissioning opportunities at home and abroad. 

Ms Sturgeon said:

“With up to 20 billion barrels of oil and gas remaining, the Scottish Government’s top priority remains working with industry and stakeholders to maximise economic recovery from the North Sea.  

“The new £5 million Fund also recognises that decommissioning is an emerging, but growing, activity in the North Sea, with £17.6 billion expected to be spent in the North Sea over the next decade.

“Scottish-based firms are already seizing opportunities, securing the lion’s share of value from a range of decommissioning activities, including project management of decommissioning programmes and high value well plugging and abandonment activity.

“Here at Sparrows, expertise developed in the oil and gas sector is being transferred to other energy and manufacturing sectors, and securing a major new contract is a significant milestone for the company.

“News today that Shell plans to apply to begin decommissioning its Brent oil field underlines the importance of planning for decommissioning. The Fund builds on our Programme for Government commitment to identify investment opportunities, with a view to improving capacity at Scottish ports, increasing the economic return to Scotland from a variety of removal, disposal and dismantling activities.”

Background

A DCF Programme Board, drawn from government and industry, and chaired by the Director for Energy & Climate Change will oversee the delivery of the fund. Decommissioning Action Plan available here: http://bit.ly/2kcRHQb

The Scottish Government will make further funds available in future years once business cases have been developed to support larger scale projects. We will work closely with industry, local authorities and stakeholders to explore opportunities.