Oil and gas operators have forecast decommissioning expenditures will cost £1.5billion every year for the next decade.
Oil and Gas UK has launched its annual Decommissioning Insight which is the leading industry forecast for activity and expenditure on the UK Continental Shelf (UKCS).
The report focuses on the activity of 28 operators in the UKCS, providing a cost analysis for the next 10 years.
From this year until 2023, expenditure will tally-up to £14.6billion.
Data was compiled from operators’ responses to an Oil & Gas UK survey which was conducted this summer on their decommissioning activity.
An additional £3billion has been attributed to new respondents to the survey and £1.2billion has been added from higher forecasts for existing projects.
Following the launch of the Wood Review, which recommended a decommissioning strategy, the report aims to help the industry find the capabilities to meet the needs of a maturing oil province.
Last year, £470million was spent on decommissioning, and this year expenditure is expected to reach £1billion.
The largest category of the expenditure is well plugging and abandonment which represents 44% of the total forecast or £6.4billion.
Oonagh Werngren, operations director, said: “Decommissioning Insight 2014 will be of huge interest to both operators and contractors as they look to the future.
“Our report provides the industry with the facts and figures it requires in order to be as informed and prepared as possible for when opportunities arise in this growing sector.
“For operators, this might be a case of collaborating on work programmes to reduce cost and gain greater efficiency, and for the broader supply chain it is ensuring the UKCS is geared up to take on this new challenge, ensuring the right technologies are developed and we have the resources in place to handle the work.”
Many of the projects included in the 2014 survey are in the central North Sea, with 43% of expenditure coming from this region.
Most of the decommissioning programmes which have been captured in the survey are considered to be in the early scoping stages.
Oil and Gas UK said the forecasts could be subject to some change as projects become more defined.