- New initiative to lower well decom costs and stimulate supply chain
- Streamlined approach to wellhead removals on the agenda
- New report shows industry spent record £2.6bn decommissioning infrastructure in 2025
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 North Sea Transition Authority (NSTA) and 17 operators have signed a charter with a set of guiding principles, including working collaboratively to develop a smoother approach to wellhead removals.
The signatories will share data, expertise and resources, and identify opportunities to share vessels for this type of work. Industry estimates suggest using vessels instead of rigs could lower the total bill for remaining subsea wellhead removals by approximately 30%, or about £200 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.
Operators undertook decommissioning work on 257 wells in 2025, progressing 114 of those to final abandonment status, according to the NSTA’s UKCS Decommissioning Cost and Performance Update, published today (13 August). In 2024, operators worked on 238 wells and fully abandoned 103.
However, 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.
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. 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.
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.
Pauline Innes, NSTA Supply Chain and Decommissioning Director, said: '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. The North Sea’s biggest operators have come aboard and embraced the principles of the charter, so we’re off to a great start.'
Mark Wilson, Offshore Energies UK’s Energy Operations Director, said: '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.'
Photo: A subsea wellhead
The NSTA’s report also shows industry spent £2.6 billion overall on decommissioning in 2025, up from £2.4 billion in 2024, as platform and infrastructure removals and well decommissioning activity increased.
The reduction to the overall cost estimate for remaining decommissioning activity – to £43.4 billion (in 2025 prices) from £43.6 billion – was marginal, partly due to geopolitical instability and competition from other regions and industries for supply chain resources.
Furthermore, UK local content for decommissioning contracts awarded in 2025 was 71%, well above the voluntary commitment of at least 50% local content in the North Sea Transition Deal.
Background
Signatories include Adura, Apache, bp, CNOOC International, Dana Petroleum, ENI, EnQuest, Harbour Energy, INEOS Energy Europe, Ithaca Energy, NEO NEXT+, NSTA, Perenco, Serica Energy, Shell, Spirit Energy, TAQA UK.
The average cost per wellhead removal was £700,000 over the past five years, based on a sample size of more than 100 wells. Approximately 1,000 subsea wells remain to be decommissioned in the UKCS. Reducing costs by 30% would save around £200 million, assuming all wellheads are removed, and not accounting for inflation.
UKCS Decommissioning Cost and Performance Update 2026
Key findings from the cost report will be presented during a webinar at 10am on Thursday 13 August. Register here: NSTA decommissioning webinar 2026
For further information please contact: Tel: 07776 548196. Email: mark.lammey@nstauthority.co.uk
Source: NSTA
