Insight
Decommissioning: the UK's US$66 billion headache
This report is currently unavailable
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Decommissioning is arguably the single biggest issue in the minds of those interested in UK oil and gas right now, weighing on operators, oilfield services companies, prospective asset buyers and sellers. In total, Wood Mackenzie estimates future decommissioning spend from 2017 onwards at £53 billion (US$66 billion, 2016 terms) with £11 billion (US$19 billion) expected to be spent over the next five years. There are a number of uncertainties surrounding this market, from fundamental questions such as how much will it cost, when will it happen, through to what happens if someone defaults on their liabilities. There are, mercifully, some certainties in the decommissioning sector. The UK has stringent regulations that set out the obligations of what needs to be removed, how to handle companies defaulting on obligations and decommissioning relief deeds (DRD) which guarantee the rate of tax relief.
Table of contents
- Executive summary
- Overview
-
The size and timing of the decommissioning market
-
Cost estimates for decommissioning
- Timing of decommissioning
- Is the service sector ready?
-
Cost estimates for decommissioning
-
Laws and regulations
- International obligations provide clear rules on the removal of facilities
- National obligations
-
Fiscal rules
- Ring Fenced Corporation tax and Supplementary Charge
- Petroleum Revenue Tax
-
Decommissioning relief deeds (DRD)
- Non-Default
- Default
- Implications for UK based oil & gas companies
-
Outlook
- Is the UK Government able to sustain decommissioning tax relief?
Tables and charts
This report includes the following images and tables:
-
Tax receipts 2009 - 2016UK plc total decommissioning spend vs tax reliefFuture UK abandonment tax relief (top 20 companies)
What's included
This report contains:
Other reports you may be interested in
Asset Report
Azadegan Phase 2
Azadegan is the largest oil field discovered in Iran in the last 30 years, and one of the biggest globally, with estimated oil in place ...
$3,720
Asset Report
Rosebank
The deepwater Rosebank oil field lies in the Faroe-Shetland Channel, 15 kilometres from the UK/Faroese median line and 125 kilometres ...
$6,900
Asset Report
Peregrino
Peregrino is a heavy oil field located in the shallow waters of the Campos basin.
$3,720
