UK decommissioning facing crisis without urgent action, oil and gas regulator’s report confirms
For immediate release: Thursday 13 August 2026
UK decommissioning facing crisis without urgent action, oil and gas regulator’s report confirms
Today’s NSTA report shows rising costs, supply chain issues, falling local content
Report backs up recent Redwater Insights research into looming clean-up crisis
Short window for action to prevent disastrous delays, blowouts, costs to UK taxpayers
LONDON - A report released today by the UK’s oil and gas regulator confirms that decommissioning will require urgent intervention, as ballooning industry costs raise questions about whether firms can afford the clean-up they are legally required to perform.
The North Sea Transition Authority’s (NSTA) decommissioning cost and performance update for 2026 has confirmed that the backlog of more than 500 wells in the North Sea needing clean-up has not been cleared, with 1,000 wells to be soon added to the queue.
The report highlights other key issues impacting the pace and scale of decommissioning, including rising costs, supply chain issues, and falling local content.
The regulator’s report confirms the findings of a recent Redwater Insights study on the economic and employment impacts of decommissioning in the North Sea. The report released in April this year found that decommissioning presents a huge opportunity to the UK, if done well.
Redwater Insights experts say key takeaways from today’s NSTA report include:
The backlog of more than 500 wells in the North Sea needing clean-up has not been cleared – despite more money being spent by operators;
And while spending is up, most operators are showing material underspend on decommissioning work;
Supply chain bottlenecks in the UK are increasingly a barrier to decommissioning work. The UK marketed semi-submersible fleet has fallen from 11 units in 2023 to 6 in 2026, at exactly the point when demand for well abandonment is increasing – an issue which merits government intervention;
In the last four years, cost estimate increases have grown faster than inflation, meaning spending inefficiencies and less work done per pound spent;
Current decommissioning figures show local content is falling, from 91% in 2025 down to 71% in 2026.
Redwater Insights Research Director Rob Schuwerk said:
“The NSTA report shows a backlog of 500 wells overdue for decommissioning, despite an increase in spending on clean-up in 2026. And while spending is up, most operators are showing material underspend on decommissioning work.
“The regulator has historically been too flexible and collaborative, with insufficiently strong deadlines and penalties to prevent strategic deferral of decommissioning.
“However, requiring timely decommissioning work could be an opportunity rather than a burden. More spending on decommissioning means more employment in decommissioning.
“If done right, decommissioning work could provide up to 25,000 UK jobs each year, and create £15 billion in economic benefit to the UK. Crucially it could extend the careers of around 15,000 current oil and gas workers facing the ‘cliff edge’ of unemployment.”
In April this year, Redwater Insights published its own report into North Sea decommissioning, conducted by researchers from Ebberstone and Transition Economics. The report was the first time the economic and employment impacts of North Sea decommissioning had been studied in detail.
The report highlighted the short window for action needed to prevent delays causing potentially disastrous impacts for UK jobs and regional economies. The report found that timely and effective decommissioning could:
Deliver more than 30,000 jobs in total (up to 25,000 of those in the UK) made up of 11,000 direct full-time equivalent jobs per year over the next decade, plus 13,500 indirect jobs, and around 6,000 roles in the flow-on benefits to regional and national economies;
Extend the careers of around 15,000 current oil and gas workers, helping them avoid the ‘cliff edge’ of unemployment facing the sector
Attract around £25.6 billion in investment from operators, delivering around £6.8 billion in direct economic benefit to the UK, with a further £9 billion in indirect and induced gross value added; and,
Government action to guarantee operators clean up ageing oil and gas infrastructure together with support to the UK supply chain, would provide a critical skills bridge for 15,000 workers facing a ‘cliff edge’ of unemployment, while creating opportunities along the UK’s east coast in Aberdeen, East Anglia, Teesside and Tyneside.
Recommendations from the Redwater Insights report include:
Increasing powers of the regulator, the North Sea Transition Authority (NSTA) to impose binding deadlines on operators, take financial assurance from operators, and increase fines for delays;
Ensuring greater involvement from regulators to require operators required to pre-fund some decommissioning costs;
Introducing measures to ensure higher levels of local content to benefit oil and gas reliant regions in the UK rather than jobs going to foreign owned firms; and
Providing better support for workers transitioning from production to decommissioning roles.
-ENDS-
Media contact
Redwater Insights: media@redwaterinsights.org
About Redwater Insights
Redwater Insights offers data-driven research and analysis on the financial and environmental risks associated with oil and gas clean-up and decommissioning liabilities. Our expert team combines financial, legal, data and regulatory analysis to provide sector-leading ARO insights across regulation and policy, audit and accounting, and data and analytics. We use this insight to inform and advise the industry, investors and policy makers with an aim of strengthening accountability and improving market integrity.
