Interview with Sandy Hutchison, TAQA UK on their Decisive Shift Towards Decommissioning

Sandy, thank you for joining us here – please can you give us a bit of an overview of 2023 at TAQA UK and what will be keeping you busy in 2024?

Can I first say thank you for offering me this opportunity to tell you something about TAQA UK’s North Sea journey, and in particular the business strategy we’re executing – one that positions us absolutely at the forefront of decommissioning in the UK offshore energy industry.

We’re the only operator focused exclusively on transitioning all our offshore assets towards decommissioning and, ultimately, their physical removal.

2023 was the last year of full production from our portfolio of assets across the Northern and Central North Sea, as we affirmed our roadmap towards exit and advanced our decommissioning planning and preparations across multiple fronts. We made material progress with those plans, including for example the start of large-scale well plug & abandonment (P&A) campaigns in the Northern North Sea.

While we’ll reach several of our big decommissioning milestones during 2024 for our NNS assets, our assets in the Central North Sea will remain focused on production and will be key in us reaching our 2024 business targets. One of our big challenges – and priorities – is to strike the right balance in terms of our focus on production alongside decommissioning project delivery.

From my perspective, the process of putting contracts in place for our decommissioning programme was a major deliverable in 2023.

No other company has ever performed decommissioning on this scale before and as we break new ground, we’re encountering many challenges and opportunities that are testing our capabilities, our technical prowess and our stamina. But, with safety and efficiency as our guiding principles, I think our people are recognising this for what it is – an opportunity to contribute to a truly exceptional programme of activity.

TAQA UK has an extensive decommissioning programme planned over the coming years – can you tell the network more about this and the opportunities it presents?

We have a big year ahead as we begin to execute many of the big-ticket projects in our decommissioning activity set. Over the next few years, we’ll cease production at all seven of our assets; three of them – Tern, Cormorant Alpha and North Cormorant in the Northern North Sea (NNS) – in 2024 alone.

To that end, we’ve been running simultaneous P&A programmes on the three platforms, and in the spring of this year, we’re embarking on the first phases of a major campaign to flush and disconnect all pipelines that link our subsea wells to their host platforms. That in turn will pave the way for the roll-out of forensically-planned asset de-energisation and disembarkation campaigns, rendering them ready for removal (along with our fourth NNS asset, Eider, which has been in utility mode in recent years).

There are multiple other strands to our carefully-scheduled decommissioning programme, not least a subsea wells P&A campaign that – like the subsea disconnection programme – is a multi-year, multi-field contract to be delivered by major services providers supported by a variety of specialist vendors.

In production terms, we’ll continue in 2024 and beyond to work very closely on our joint venture arrangements in the Central North Sea, where our decommissioning plans lie further in the future and where production from our assets – Harding and our two Brae field platforms – is still the main area of focus meantime. Ensuring our production and commercial teams sustain that focus will be critically important to us. Our stakeholders, including TAQA HQ in Abu Dhabi, our JV partners and regulators, rightly expect it of us.

Although we’re of course entering the final miles of our North Sea journey, there’s still a huge amount to be done and supply chain and commercial opportunities will continue to abound. We anticipate that it will still be necessary to put around 250 individual contracts in place, of varying scale, between now and the end of the production phase.

The supply chain obviously has an important role to play in the successful delivery of decommissioning – can you tell us more about this and in your view how operators and the supply chain can work together to achieve the best outcomes?

It’s an interesting point to raise at this time, because we’re currently engaging with the regulator – the North Sea Transition Authority (NSTA) – on this specific issue. We’re keen for them to know more about our approach and to feel reassured that we’re in a position to deliver our programme on time against the backdrop of supply chain capacity pressures. As an operator that’s in the vanguard of large-scale decommissioning, it’s also a great opportunity for us to share our knowledge, experience and learnings with the NSTA for the benefit of operators following in our footsteps.

We’ve always embraced that spirit of collaboration whenever possible, and in that respect, we took part in the industry body Offshore Energies UK Share Fair in March to showcase our decommissioning plans and to platform further contract opportunities that are coming down the line.

We welcome these kinds of opportunities because we’re proud of our track record of innovation and fresh thinking when it comes to our contracting practices, not least in the decommissioning arena.

The process of awarding our Engineering, Preparation, Removal and Disposal (EPRD) contract for the removal of our four NNS assets offers a perfect example. At the pre-tender stage, we funded study work by each prospective tenderer so they could bid on the basis of robust data and exceptional levels of insight into the contract scope. It was a significant investment on our part, but it underpinned the submission of quality tenders while contractors themselves had elevated levels of confidence in their bids; a win-win situation.

Our decision to go to the market early, to promote a culture of openness and transparency, and to offer unprecedented access to our onshore and offshore operations, was appreciated by tenderers. In the same vein, the flexibility built into the contract with the successful bidder helps it to plan the individual asset removal campaigns into its broader long-term work portfolio in what is an increasingly busy and competitive market. It is, incidentally, the biggest single offshore decommissioning contract placed in the UK North Sea to date, a ‘mega scope’ encompassing four platform topsides and three steel supporting jackets weighing around 114,000 tonnes in total.

What is TAQA UK doing to support its people as it decommissions its assets?

We’ve invested an immense amount of time, resources and energy to inform and support our people during a process that inevitably gives rise to uncertainty.

In fact, we’ve gone far beyond the conventional practice of helping colleagues to achieve their workplace potential during their time of employment with us and taken positive steps to help them plan and prepare for working life beyond TAQA UK.

The execution of the various stages of our decommissioning strategy is in itself equipping many of our people with new experience and skills that position them well for new career opportunities in a sector that is set to grow exponentially in the coming years.

We’ve also, however, rolled out a number of initiatives designed to support them in a wider context. These include our Big Picture programme, an employee engagement experience which enabled employees to assess what the late life/decommissioning journey means for them, understand the opportunities it presents and make informed choices on their future. More than 600 staff, as well as many members of our contracting community, took part in the interactive sessions. In parallel, we introduced Future You, our dedicated hub of information and support to help employees settle on their post-TAQA UK plans – whether that’s remaining in the industry, pursuing a new career path entirely or taking retirement – and actively work towards them.

We’ve fostered a culture of people development since our earliest days in the North Sea; we’re proud of our reputation as a good employer, and we want people to move on from TAQA UK in due course with positive reflections on the work experience and development opportunities we have offered.

As an industry leader what excites you about working in our industry and how do you view the oil & gas industry contribution to the energy transition?

TAQA UK’s story began with just four of us working from small, serviced offices in Aberdeen in the late 2000s; we went on to become a major player in the North Sea, producing 60,000 barrels of oil per day at our peak.

I’ve always been excited to be part of a company that essentially grew from nothing, demonstrated flair and a can-do attitude to maximise its potential, proved resilient through highly challenging industry downturns and is now implementing a strategy to bring its operations to a managed close. To have gone circle with TAQA UK gives me huge professional satisfaction; I’m proud of where we’ve come from and what we’ve achieved. I also feel privileged to continue working with our talented employees who have achieved so much, individually and collectively, to help TAQA UK become a success.

The transition to non-fossil fuel sources of energy supply will take time, and although TAQA UK is exiting the North Sea, offshore production will be an essential element of the energy transition for many years to come. So, it’s important to show support for the operating community who will continue to play a vital role in powering homes, businesses and transport, and providing employment. Furthermore, the transition needs to be navigated in a managed way, in conjunction with new energy providers. Working together towards sensible and attainable goals is the right course of action.

The energy industry would also, I believe, benefit immensely from a stable and consistent fiscal and energy policy framework, so companies can plan ahead and make investment commitments with confidence. As a proud Aberdonian, I want the best for our city and its future. Investment will be key to that, requiring collaboration, co-operation and importantly clarity and confidence between companies, shareholders and relevant policy makers.