Oil and Gas Decommissioning | Decom North Sea

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​Collaboration Key to Business Efficiency

It's an obvious question perhaps: does the apparent rise in decommissioning activity in and around the North Sea oil and gas sector mean there's less business being done while some operators are slowing down?

Nigel Jenkins, chief executive of Aberdeen-based body Decom North Sea (DNS) with 250 members in the business, fields the query with a serious response.

"With the current oil price shock all aspects of UKCS activity will no doubt be under review, " he says. "However for decommissioning this may not be negative sign."

In what way? "While there may be an impact on E&P activity, it's incumbent on the industry to decommission what is still there but no longer needed, as highlighted in the Wood Review which DNS fully endorses. So to some extent growth in decommissioning is an indication of the status of the UKCS and development of the industry."

Added to which there is the relatively recent structural change – the creation of his organisation – that has facilitated activity expansion while bringing more formalised monitoring and coordination into what had previously happened in a more individual and disparate way.

"DNS was created in 2009 after the government recognised that decommissioning would always be needed, and that doing it efficiently, according to regulation, could be an opportunity for UK plc – particularly with Scotland being in the geographical position it is. Our ambition is to make Scotland and the UK a recognised centre of excellence for decommissioning."

That is delivering a win-win result, with the environment's protectors seeing success and involved companies listening to, and learning from, each other with the consequence of better business being done. If DNS were a profit-driven operation, with its quickening rise in membership – "up significantly in the last six months" – it would actually be a three-cornered win.

"We are a not-for-profit organisation," says Jenkins, who took on his role five months ago after board positions with KDC, AMEC,AECOM and DNS itself.

"We are not a trade or supply chain association: we represent operators of every size, from the likes of BP and Shell to SMEs and specialist technology companies. Because we are completely non-partisan we can bring operators and the supply chain together and say to them: How can we be more efficient? How can we do this differently?

"A key cost area in decommissioning, is 'well plug and abandonment' and we play a key role in bringing people, ideas and developments together on such a front to improve efficiency. We drive collaboration for meaningful business benefits for our members."

Which is not to say that DNS itself is above thinking about finance. But it does so in a spirit of prudent management. Its Aberdeen HQ is "modest" with a staff of five (including the CEO, new GM and an additional marketing/events manager) and "we carefully control overheads so that ' funds are used to drive forward industry cost efficiency, collaboration, learning, key projects and industry gatherings".

Such meetings include the UK's leading annual decommissioning conference in St Andrews where "DNS and Oil & Gas UK bring the industry together to update on case studies and lessons learned; and we have a programme of lunch-and-learn events where members present on a particular problem they've solved".

None of which suggests that DNS is turning a blind eye to the oil and gas industry's less than happy year. Far from it. Jenkins sees riding occasional storms as part of business. "If the operators' discretionary spend is reduced because of a reducing oil price, that will clearly impact on many related activities. But decommissioning is often unavoidable. DNS is here to help, particularly in this current difficult moment by supporting the development of cost-efficient solutions. There are many projects in the pipeline and it is conceivable that the industry will be even busier next year, although there are clearly many challenges ahead."

By which time, no doubt, there will be new horizons to contemplate anyway.

Page 13 - 18th December 2014 - http://www.times-energy.co.uk/

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