North Sea oil and gas operators on Thursday backed an initiative to reduce the cost of decommissioning thousands of inactive wells, as the industry seeks to tackle a growing backlog and ease pressure on taxpayers, according to statements from the North Sea Transition Authority.
The initiative could cut the cost of removing remaining subsea wellheads by about 30%, or about 200 million British pounds ($270 million), according to industry estimates.
The savings would come partly from using specialist vessels rather than expensive drilling rigs for the final stage of well abandonment.
This initiative has the potential to be a win-win-win for operators, suppliers and taxpayers, Pauline Innes, NSTA supply chain and decommissioning director, said in a statement.
The NTSA signed a charter with 17 operators setting out principles for closer cooperation on well decommissioning, including sharing data, expertise and offshore resources and identifying opportunities to share vessels.
Operators use rigs for the initial stages of decommissioning, including plugging wells with cement to prevent leaks. However, the new approach uses vessels to remove wellheads from the seabed, freeing rigs to undertake earlier-stage work.
The NSTA said a dedicated industry workgroup will develop a framework for carrying out so-called AB3 wellhead severance activities while meeting regulatory requirements.
The push comes as decommissioning activity in the UK Continental Shelf accelerates. The NSTA said that operators worked on 257 wells in 2025 and brought 114 to final abandonment, up from 238 wells worked on and 103 fully abandoned in 2024.
However, about 500 inactive wells remain awaiting final abandonment, while over 1,000 additional wells are expected to require decommissioning over the next five years.
The regulator has increased scrutiny of operators, including through greater performance transparency, new data tools and sanctions for non-compliance.
The industry's decommissioning bill reached a record 2.6 billion British pounds in 2025, up from 2.4 billion a year earlier, as work on wells, platforms and subsea infrastructure increased.
However, despite higher spending, the estimated cost of completing the remaining UKCS decommissioning program dropped to 43.4 billion British pounds in 2025 prices, down from 43.6 billion British pounds.
The NSTA attributed the limited reduction in part to inflation, geopolitical uncertainty and competition for specialist offshore resources from other regions and energy industries.
Cost pressures highlight the importance of improving efficiency as the UK oil and gas sector moves deeper into its decommissioning phase.
Operators and suppliers are using collaborative procurement, new commercial models, technology trials and longer-term contracts to reduce costs and improve planning.
The sector is also maintaining a strong domestic supply-chain presence. UK-based companies secured 71% of the value of decommissioning contracts awarded in 2025, exceeding the 50% voluntary local-content commitment under the North Sea Transition Deal.
The NSTA's latest decommissioning benchmarking report, published on Thursday, expands its database to over 1,280 wells, almost 200 more than in the previous edition.