Westwood Global Energy analysis suggests deferring work would increase well P&A costs by up to US$5.5Bn
An analysis by Westwood Global Energy suggests US$26.0Bn could be spent on decommissioning in the UK North Sea over the next decade, with well plug and abandonment (P&A) alone accounting for about 50% of the cost.
Twenty-two UK fields ceased production in 2024, and about 12% of active UK fields will cease production in 2025, according to the London-headquartered energy analyst.
The UK’s North Sea Transition Authority (NTSA) estimates that about £20.0Bn (US$26.0Bn) is forecast to be spent in the next decade, with an estimated 1,500+ wells required to be plugged and abandoned by 2030. Overall, NTSA reports £40.0Bn (US$51.7Bn) will be spent on decommissioning in the North Sea based on constant 2021 prices.
Westwood Global Energy said deferring work scopes could strain the supply chain’s limited capacity to execute the work. If delays persist and rig availability tightens, well P&A costs could climb by up to US$5.5Bn, due to higher offshore rig day rates, increasing financial liabilities for both operators and the UK government, which provides tax relief on decommissioning costs.
The release of the analysis by the London-based energy analyst comes as political and fiscal uncertainty has impacted investor confidence in the UK, which is accelerating the decline of domestic production. This uncertainty is driving financial and operational risks for operators, as the decommissioning workload increases but contract awards are lagging, particularly for offshore rigs.
“As the UK North Sea enters a new phase where decommissioning becomes the dominant industry driver, the supply chain faces significant demand and major financial risk,” said Westwood research director Yvonne Telford. “Based on current investment plans, up to 40% of UK fields could cease production before 2030. With the impact of decommissioning tax liabilities on abandonment expenditure, cost-effective P&A must be paramount,” she stated.
Westwood chief executive Dominic Ferry said, “Westwood’s new Atlas Decommissioning module provides the clarity the market needs by linking infrastructure data with economic forecasts, offering stakeholders a clear view of the timing, cost and risks associated with decommissioning. By delivering granular insights into decommissioning activity, the module helps operators, service providers and investors to make informed decisions, mitigate financial exposure and seize emerging opportunities in this evolving landscape.”
The research comes as Westwood launches its new Atlas Decommissioning module, which provides real-time and detailed insights into decommissioning timelines, infrastructure removal and market dynamics.
