The decommissioning costs of oil and gas firms which have recently gone bankrupt or are in financial distress is near $15billion, according to new analysis from Boston Consulting Group (BCG).
The decommissioning bill for NEO Energy’s newly-acquired Exxon Mobil assets in the UK has been estimated at $1.1billion (£795m).
The offshore oil and gas sector is “ripe” for emerging new decommissioning models, however analysts BCG said they “strongly doubt” some will survive.
Widespread decommissioning deferrals could lead to a “wave of idle iron” in the UK and globally as companies rush to preserve cash and potentially shut down uneconomic oil platforms, according to new analysis.
New analysis has outlined “huge concerns” for UK taxpayers around whether oil and gas firms will be able to meet their hefty decommissioning costs, with some rising above their company market values.