Date lodged: 30 January 2018
To ask the Scottish Government, in light of the recent report by Options for Scotland on alternative strategies for decommissioning, whether it will review its policy on decommissioning of offshore oil rigs, and, if so, whether it plans to ask the UK Government to do the same.
Answered by: Paul Wheelhouse 27 February 2018
The Options for Scotland Report focuses predominantly on the tax regime regarding the decommissioning of fixed oil and gas structures, namely the topsides and jackets of offshore oil and gas platforms. As you will be aware the UK Government approve and regulate decommissioning programmes for all UKCS fixed oil and gas installations and pipelines, and are responsible for ensuring that decommissioning is delivered in a safe, efficient and cost effective manner whilst minimising the risk to the environment and other users of the sea. Although decommissioning is a reserved matter, the Scottish Government is committed to maximising the economic benefits available from decommissioning, and supporting Scottish industry to win valuable contracts in areas such as topside salvage and disposal, building upon the existing successes in capturing high value projects in areas such as well-plugging and abandonment.
The Floating Market Study, published on 5 January, by the Scottish enterprise agencies (SE and HIE) indicates there is significant market potential in decommissioning floating and mobile oil and gas infrastructure, including oil rigs, floating production vessels, and support vessels. It is imperative that the Scottish supply chain ready itself for the full range and diversity of decommissioning opportunities for fixed and floating assets in order to compete with other nations which are already active in decommissioning; thereby making the most of these economic opportunities for Scotland. The range of projects that we have funded through the Decommissioning Challenge Fund indicates that there are already organisations poised ready to capitalise on these markets. Slowing our momentum could therefore mean that we permanently miss out on opportunities across the sector.
We are aware of the wider issues raised by the Options for Scotland report, particularly the growing debate around environmental management, and regulatory and market capability aspects of decommissioning. As this industry develops we will continue to review all the latest evidence, including perspectives of industry and regulators, to ensure that our approach to decommissioning utilises best practice and seeks to optimise the benefits for Scotland.