OPINION: The UK oil and gas sector deserves credit for again cutting the estimated cost of decommissioning its oil and gas facilities, but it must step up efforts to get as close as possible to a looming target that now looks set to be missed.

The UK North Sea industry provides vital energy supplies for the country.

But ­­— amid rising environmental concerns and anger over its huge profits when millions of householders are struggling under soaring domestic energy costs — its contract with society is on shaky ground.

In a new report, the North Sea Transition Authority (NSTA) said industry has done well in the last year to cut the forecast cost of decommissioning the UK’s 12,000 offshore wells, 300 platforms, 1000 offshore structures and 40,000 kilometres of pipelines by £1.5 billion ($1.8 billion), or 2%, to £44.5 billion.

This total estimate is now £15 billion lower — a reduction of 25% — than it was in 2017, when the regulator introduced a baseline estimate of £59.7 billion and set a target of reducing costs by 35% to £39 billion by the end of 2022.

That Covid-19 pandemic has blown industry’s efforts to hit that target off course, but the NSTA still commended operators for making further inroads while battling huge economic uncertainties caused by the pandemic.

It must not be forgotten that the UK public purse is on the hook for billions of pounds in tax relief to help operators cover the cost of removing their facilities.

Given the generally negative public perceptions of industry right now, you would hope industry feels it is a non-negotiable obligation to do as much as possible to make up some of the lost ground.

(This is an Upstream opinion article.)