What Exactly Does an Oil Rig Decommissioning Contractor Do?

Oil rig decommissioning offshore is big business. A company will be contracted to do the work, but what exactly does an oil rig decommissioning company do? It’s a good question, and a better understanding of what is involved can help us to more fully understand the complexity of the matter, as well as the many difficulties that can arise from this kind of work.

The decommissioning of oil rigs takes place both offshore and onshore, though it depends on the actual rig and where it is to a large degree as to how it is dealt with. It is a very costly business and not one to be taken lightly. It is for this reason that rig decommissioning contractors should be chosen carefully. A past record of good work with an excellent reputation works well for a decommissioning contractor.

The costs involved are huge. Decommissioning an oil rig in the North Sea will cost somewhere between 30 and 200 million pounds, depending on the size of the structure. Current legislation allows the operators of oil fields that were leased prior to 1993 to claim a rebate on their decommissioning costs from the UK Government. This rebate can be up to 75%, and is considered to be a rebate on their past oil revenue taxes.

Oil rig decommissioning contractors face many technological challenges. Depending on their size, oil rigs can weigh anything from 10,000 tonnes to over 150,000 tonnes – that’s an awful lot of steel and other materials to process! This material has to be cut up (mostly using safe, water cutting techniques), taken from deep waters to a base onshore, usually many miles away and stored, recycled and eventually reused for some other project.

It can be a slow and arduous process requiring a lot of careful planning and implementation. Overcoming the numerous difficulties which are commonly found in places like the North Sea has allowed many technological advances to be made. Over time, contractors can take advantage of someone else’s discoveries of how to best tackle a particular problem building up the expertise required in such a complex issue. Each contractor is able to stand on the shoulders of those who have gone ahead, and so the knowledge and expertise has been accumulated over the years. As an example, the Brent Spar saga of 1995, where Shell faced numerous problems trying to dump the oil platform in deep water off the edge of the continental shelf off Scotland’s west coast, has taught the decommissioning industry a lot. They have learned to work with environmentalists and to pay attention to popular opinion. New approaches have been developed as a result making oil rig decommissioning offshore contractors more efficient than ever.