The UK’s North Sea Transition Authority (NSTA) announced, in a statement posted on its site recently, that “leading” North Sea operators have backed an NSTA well decommissioning charter.
“North Sea operators have pledged to support an initiative to help them meet their well decommissioning obligations, boost the supply chain, and potentially deliver significant savings for industry and taxpayers,” the NSTA said in its statement, which highlighted that the NSTA and 17 operators had signed a charter “with a set of guiding principles, including working collaboratively to develop a smoother approach to wellhead removals”.
Signatories include Adura, Apache, BP, CNOOC International, Dana Petroleum, Eni, EnQuest, Harbour Energy, INEOS Energy Europe, Ithaca Energy, NEO NEXT+, CNR International, Perenco, Serica Energy, Shell, Spirit Energy, and TAQA UK, the charter revealed.
The charter states that the NSTA “is committed to working closely with industry to ensure inactive wells with no prospect of resuming production are decommissioned in a cost-effective and timely manner”.
“At present, market conditions are challenging. A shortage of semisubmersible rigs is pushing up costs, which will be borne by current and future operators and taxpayers, and contributing to the build-up of a backlog of suspended wells awaiting decommissioning,” the charter adds.
“The NSTA has always listened to operators who are determined to fulfil their well decommissioning obligations and considers that they would benefit from our support, including our ability to share certain high-quality data and bring industry stakeholders together,” the charter continues.
“Through our ongoing engagements with industry, in particular, we have been made aware of an opportunity to collaborate with stakeholders to streamline the delivery of AB3 wellhead severance (WHS) work, which we believe would be to the mutual benefit of operators, the supply chain, taxpayers, and regulators,” it goes on to state.
The charter outlines that the NSTA, in collaboration with operators, drew up the charter with the aim of achieving several objectives. According to the charter, these comprise, “Reducing the cost of, and amount of time spent on, well decommissioning work”; “Defin[ing]… a pragmatic framework for the delivery of AB3 wellhead severance activities in a cost-effective manner that satisfies regulatory obligations”; “Stimulating supply chain activity and ensuring best use is made of the well plugging and abandonment supply chain, including both vessels and rigs”; “Tackling the well plugging and abandonment backlog”; and “Identifying and adopting new commercial and contractual delivery models”.
The charter highlights that it asks signatories to embrace the following principles – “Work together with the NSTA and industry partners in a true spirit of collaboration”; “Support the resourcing of the initiative, including by making colleagues available to participate in the workgroup and workshops”; “Share data relating to inactive wells, and be forthcoming with relevant insights, with the workgroup, but this does not permit or require any conduct which would otherwise be prohibited by or under any legislation, including in relation to competition law”; “Embrace opportunities to engage the supply chain early, share data and scheduling information with them”.
Activity Needs to Increase
In its statement, the NSTA highlighted that charter signatories will share data, expertise, and resources, and identify opportunities to share vessels for this type of work.
It revealed that industry estimates suggest using vessels instead of rigs could lower the total bill for remaining subsea wellhead removals by approximately 30 percent, or about GBP 200 million ($271 million).
“Disused wells which will not produce oil and gas again need to be decommissioned in a cost-effective and timely way that reduces environmental and safety risks and lowers the cost of decommissioning tax relief to the Exchequer,” the NSTA noted.
The NSTA highlighted in its statement that operators undertook decommissioning work on 257 wells in 2025 and progressed 114 of those to final abandonment status, according to its recently published UKCS Decommissioning Cost and Performance Update. In 2024, operators worked on 238 wells and fully abandoned 103, the NSTA highlighted in its statement.
The organization went on to warn, however, that “with a backlog of 500 inactive wells awaiting final abandonment, and with more than 1,000 additional wells due for decommissioning over the next five years, activity levels need to increase”.
“To ensure obligations are met, the NSTA has provided greater transparency of performance, launched new data tools, and imposed sanctions for non-compliance,” it added.
“The new initiative will add impetus by ensuring best use is being made of the North Sea fleet. Rightly, rigs are being used for the initial subsea well decommissioning phases, which involve plugging wells with cement to prevent leaks,” it continued.
“Operators could reduce costs and emissions and save time by making greater use of vessels, instead of rigs, for the final step – removing the wellhead from the seabed,” it noted.
The NSTA went on to state that a new workgroup will support the aim of getting more of these vessels on the move, “while also freeing up rigs to conduct earlier stage well decommissioning work”.
“Its members intend to define a pragmatic framework for the delivery of AB3 wellhead severance activities in a cost-effective manner that satisfies regulatory obligations,” it said.
Win-Win
In the NSTA statement, Pauline Innes, NSTA Supply Chain and Decommissioning Director, stated that “this initiative has the potential to be a win-win-win for operators, suppliers, and taxpayers”.
“By collaborating, we can tackle the backlog, lower the cost of well decommissioning, protect the marine environment, and stimulate the offshore service sector,” Innes added.
“The North Sea’s biggest operators have come aboard and embraced the principles of the charter, so we’re off to a great start,” Innes continued.
Mark Wilson, Energy Operations Director at industry body Offshore Energies UK (OEUK), said in the statement, “industry’s commitment to this charter shows a shared determination to work collaboratively and responsibly with the NSTA and partners to address inactive wells safely, efficiently and drive down costs”.
“By sharing data, providing expertise and engaging the supply chain early, operators can improve visibility, planning and outcomes across the sector while maintaining legal, regulatory and operational standards,” Wilson added.
In its UKCS Decommissioning Cost and Performance Update, the NSTA said decommissioning remained a major activity across the UKCS last year, “with industry spending reaching a record GBP 2.6 billion [$3.5 billion], reflecting continued progress in the decommissioning of wells, platforms, and subsea infrastructure”.
“Operators carried out decommissioning work on more wells than in the previous year, while topside and infrastructure removal activity also increased, demonstrating a continued commitment to meeting regulatory obligations and delivering safe and responsible decommissioning,” it added.
The NSTA went on to state in its report that, “despite this record level of expenditure, the estimated cost of completing the remaining UKCS decommissioning program has reduced only marginally to GBP 43.4 billion [$58.8 billion]”.
“While operators and the supply chain continue to pursue efficiencies, progress has been offset by inflationary pressures, market uncertainty, growing competition for specialist offshore resources, and increasing demand from other energy sectors,” it highlighted.
“From our platform to LinkedIn’s energy professionals – your announcements reach the entire sector’s network, not just our readers.”