§ Mr. Matthew TaylorTo ask the President of the Board of Trade (1) how many oil platforms there are in British waters; what is the estimated date of decommissioning for each; what decommissioning options are currently being considered for each oil platform in operation in British waters; and what is the Government's preferred option for disposing of oil platforms in British waters; [41123]
(2) what estimate she has made of the potential cost to public funds of tax reliefs for the decommissioning of oil platforms in the North Sea over the next 10 years; [41124]
(3) what is Her Majesty's Government's policy towards the disposal of oil platforms at sea. [41125]
§ Mrs. BeckettThere are approximately 250 offshore oil and gas installations currently located on the UK Continental Shelf. The majority will reach the end of their 235W useful lives during the next 25 years but the peak years for decommissioning activity are expected to be between 2003 and 2012.
Our policy is based on a presumption in favour of land disposal except where, taking account of the environment as a whole, such a course is neither safe nor practicable. Generic studies have demonstrated that the great majority of existing installations will be brought onshore for re-use, recycling or disposal. These studies have also shown that the current generic solution for large concrete installations is to leave them in place. There is no single generic solution for heavy steel installations located in deeper water and we consider that these structures should be assessed on a case-by-case basis with decisions based on solid analysis and in the light of open and transparent consultations.
Gross decommissioning costs over the next 25 years are estimated to be in the range of £7 billion to £10 billion at current day prices. The Inland Revenue estimates that around 50 per cent. of the costs will be met by the Exchequer through tax relief. Decommissioning costs generally qualify for tax relief under the normal Petroleum Revenue Tax and Corporation Tax rules. Royalty relief is currently available where royalty has been paid on that licence.