Oil and gas decommissioning

The Decommissioning Action Plan launched by Scottish Enterprise and Highlands and Islands Enterprise in 2016 sets out how we are making the most of decommissioning opportunities at home and abroad.

In February 2018, in partnership with Highlands and Islands Enterprise and Scottish Enterprise, we commissioned Westwood Energy Group to produce the Offshore Floating Asset Decommissioning Market Study which explores decommissioning opportunities in the oil and gas sector.

We are also providing funding and assistance to enhance the capability of the Scottish supply chain, with the aim of making Scotland a world leader in decommissioning.

Decommissioning Challenge Fund 

The Decommissioning Challenge Fund (DCF) was announced by the First Minister on 8 February 2017 as a means of supporting:

  • infrastructure upgrades and innovation in retrieval and transportation methods at ports and harbours
  • supply chain projects to strengthen Scottish decommissioning capabilities and capacities
  • projects to develop high quality and comprehensive investment-grade business proposals for decommissioning
  • engineering scoping work at key sites to build business cases
  • feasibility studies to help to attract private investment

The DCF aligns with and supports cost reduction efforts related to retrieval and disposal activities, with the aim of improving the Scottish onshore decommissioning market.

It supports the Decommissioning Action Plan and complements past successes of the Scottish supply chain in securing contracts for certain aspects of high-value decommissioning work.

Decommissioning Challenge Fund Call 2019 to 2020

The fourth round of the Decommissioning Challenge Fund opened to new applications on 15 July 2019. 

We welcome applications for projects that will strengthen Scottish decommissioning capability and capacity, meeting the following criteria: 

  • Infrastructure upgrades that will enable a facility to increase their competitiveness in securing large-scale onshore decommissioning projects. Applicants within this criteria must already hold the required SEPA licences, or be in the process of obtaining the required licences for needed to undertake onshore decommissioning (e.g. WML, PPC, etc.), or demonstrate that the site has already completed onshore decommissioning work within the last 24 months. Locations which do not meet the above criteria will not be eligible to apply.
  • innovation associated with retrieval, transportation and disposal activities that address an industry challenge and/or lead to cost reduction
  • projects that advance Scottish knowledge and skills across the decommissioning sector and lead to greater efficiency or safety, lead to a reduction of emissions, improve waste management and/or advance the circular economy.
  • Small and Medium Enterprises (SME) that demonstrate support is required for infrastructure, training, technology or equipment that will increase the competitiveness of Scotland’s decommissioning supply chain businesses, strengthening the existing supply chain

Successful projects will need to demonstrate, in line with the requirements of State Aid:

  • public investment is required to enable the full scope of the project to be achieved
  • where necessary the project can secure other sources of funding that will make a significant contribution towards the overall cost of the project

How to apply  

Expressions of interest can be submitted on the consultation section of our website.  The closing date for full applications is 2 September 2019.

Once the expression of interest has been checked to ensure the project meets the eligibility criteria, an application form and guidance will be sent out by email. If you have any questions please email DCF@gov.scot

Projects supported by the DCF

The DCF ran three successful application calls between 2017 and 2019. Grant offers totalling £10.3 million were made to 28 projects and partnerships.

Some examples of projects supported by the DCF include:

  • Peel Ports, Hunterston - feasibility studies for the first stage of plans to redevelop the marine quay, and infrastructure to support waste management from decommissioning activity
  • Isol8, Aberdeen –Development of a thermite-based well barrier tool string for the well plugging and abandonment market. This will not require a drilling rig and can be deployed by wireline
  • OilMac, Dundee – Purchase and refurbishment of a 1,200-tonne fixed-location heavy-lift crane to deliver cheaper heavy lift rates to decommissioning projects
  • Oil States Ltd, Aberdeen –Development of an Integrated Well Abandonment Tool, providing a rigless solution utilising cheaper, intervention vessels for easy access, and fendering for flood tunnels to prevent damage to flood covers
  • Kishorn Port Ltd – Permanent pumping system for the dry dock, concrete repairs for extra protection, roadway surfacing for easy access, and fendering for flood tunnels to prevent damage to flood covers
  • Dales Marine Ltd. Edinburgh – replacement of dry dock gates at the Dry Dock in Leith, Edinburgh.

DCF Programme Board and Partners

We chair the DCF Programme Board, which is responsible for ensuring the DCF supports projects with the best opportunity of securing onshore decommissioning contracts and which have a high likelihood of succeeding.

The Programme Board’s key roles are to:

  • evaluate and endorse applications, make awards, and steer the production of a DCF award Board Report
  • establish the approach to monitor who project awards are spent, budget oversight and governance of the fund
  • contribute to discussions regarding the financial approach to any extension to the DCF beyond the initial year 1 funding

The Programme Board is supported by the DCF Partners, drawn from Scottish Enterprise and Highlands and Islands Enterprise, who are responsible for the day-to-day running and administration of the Fund. This includes making small awards, reporting outcomes, and preparing materials for Programme Board meetings, including recommendations.