Decom Mission research reveals widespread frustration in the sector

A survey by liquidation trade body Decom Mission revealed widespread frustration among regulators amid several supply chain issues.

The survey also revealed concerns among respondents that the decom industry is “moving towards a lowest price wins environment, which is unsafe and will lead to unsafe operations and shortcuts.”

Launched last year, Decom said the study aimed to provide a “snapshot” of industry sentiment across the offshore oil and gas, nuclear and decommissioning sectors.

The survey received 199 responses from organizations including supply chain companies, asset owners and operators, consultants and regulators.

More than half of survey respondents said they worked in multiple energy sectors, with about a third working exclusively in oil and gas.

In addition to gathering information on sentiment across the sector, Decom Mission said the survey also provided “major insight into current supply chain capabilities and performance.”

The results, covering topics including commercial operations, sector confidence, environment, people and skills, and safety and regulation, revealed a sense of frustration and anxiety across the supply chain related to decommissioning.

The study reflects the “current reality” of the supply chain

Decom Mission presented its findings at the opening session of this year’s Decom Week event in Aberdeen, with the organization’s chief executive Sam Long saying the study focused on “the current supply chain reality”.

“While we understand that there will always be an emphasis on future opportunities in the energy industry, we felt it was necessary to focus on the current supply chain reality and, in doing so, we have re-categorized what many of us will recognize in a more anecdotal way as the basis for practical and quantifiable knowledge ” said Long.

© Provided by Kenny Elrick/DC Thoma

“This allows us to continue to support the supply network (which includes asset owners) to address identified challenges such as the requirement for more sustainable and equitable business practices, the continued need to support a decompression culture and mindset and enable better performance.

“These outcomes include improved recycling and asset reuse, support for circular economy principles, more effective regulation and a commitment to decarbonize decom operations.”

Offshoring and cost pressures are the main problems

The survey, developed jointly with process safety and data analytics company Empirisys, included both text-based and multiple-choice responses.

With an average survey score of 0.62, responses suggested a “level of dissatisfaction with the decom industry.”

Particular dissatisfaction was felt in the areas of project implementation, regulation and skills gaps.

“People and skills are a key issue in most sectors,” Long said.

“But this is a nuanced issue and will require smart solutions.”

On the commercial front, respondents “feel overwhelmed by budget constraints, project delays and pressure to cut costs,” according to the study.

© Taqa/Coen de Jong

Respondents felt that costs often outweigh environmental impacts and that the industry was not meeting its circularity and repurposing goals.

They also expressed concern about the lack of experienced staff, the challenge of maintaining profitability and the obstacles to investing in sustainable technologies.

“There is general frustration with the commercial challenges facing the decommissioning sector and the desire to introduce more sustainable and fair business practices,” the report said.

The survey also revealed low levels of trust in the sector, with responses highlighting concerns about ongoing project delays and deferrals, offshoring and lack of project visibility.

Lack of regulatory transparency for the decom sector

Respondents also expressed dissatisfaction and concern about the current regulatory environment regarding the decommissioning of offshore facilities.

Many responses expressed a desire for regulatory reform and change to provide greater transparency, and staff felt that regulators were not providing sufficient guidance and support to organizations dealing with decommissioning.

The impact of regulatory decisions on the UK economy, particularly in relation to decommissioning work carried out or outsourced overseas, amid concerns about the impact on sector development and value for UK taxpayers.

© Provided by AF Gruppen

Several responses also highlighted “operators’ influence on regulators appears to be disproportionate” and questions about integrity and accountability.

Some respondents felt that regulators often side with operators “to the detriment of other stakeholders.”

Decom Mission’s chief operating officer, Callum Falconer, said there was rarely a “failure” in the organization’s work with “both regulated and regulated entities”, but “opportunities for improvement do arise”.

Safety is positive, although some concerns remain

Questions about safety training, prioritization and culture were some of the highest scoring questions throughout the survey, with most respondents responding positively.

However, respondents also expressed concern that “safety, especially in terms of decommissioning, is often overshadowed by cost considerations.”

Empirisys chief technology officer Peter Sueref said the survey results could “provide insight into real changes in the decom supply network.”

“The carefully crafted survey yielded thousands of text responses, resulting in a deep database of information from which conclusions can be drawn,” Sueref said.

“Our approach to analyzing these responses included not only analyzing numerical and statistical responses, but also adding real value by extracting opinions and insights from long text responses and weaving it all together to provide rich, meaningful insights.”