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Industry Analysts Say Almost 150 Oil Rigs In UK North Sea To Be Scrapped Within Next Decade

By February 9, 2016 at 8:18 pm
Almost 150 Oil Rigs In UK North Sea To Be Scrapped Within Next Decade (Photo : WPA Pool | Getty Images News)

UNITED KINGDOM - Almost 150 oil rigs in UK North Sea are said to be scrapped within the next decade, according to industry analysts.

Douglas-Westwood, a research and consultancy firm based in Kent, United Kingdom, said 146 oil platforms are expected to be removed from UK waters from 2019 to 2026, which accounts 25 percent of the current total number, BBC News report.

The abandoning of the oil platforms is due to the decline of oil price, making them uneconomic. And since 2014, an estimate of 65,000 employees lost their jobs within the oil industry.

But according to The Guardian, Douglas-Westwood shared that the removal of the rigs could give way for more opportunities for specialist firms that are involved in the project.

"The oil price collapse has been bad news for nearly every company involved in the industry, but one group that could actually benefit from it are specialist decommissioning companies," Douglas-Westwood said in a statement.

"For these companies there is an opportunity to be part of removing the huge tonnage of infrastructure that exists in the North Sea. With oil prices forecast to remain low, life extension work that has kept many North Sea platforms producing long past their design life no longer makes commercial sense."

On Friday, Wood Mackenzie, another global energy research and consultancy company with headquarters in Edinburgh, UK, reported that one in seven oil barrels produced in UK waters experiences cash loss in accordance to the recent prices in the market.

Furthermore, it revealed that UK may become the the third country to anticipate its oil fields to be closed permanently due to the on-going oil price decline. Apparently, Canada and Venezuela produce more oil at a cash loss.

The decline of oil prices is the result of having too much supply, yet there is only little demand from the market. At the same time, the increased production of shale oil in the U.S. has prompted the country to import less oil, causing for the prevalence of oversupply.

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