MER and Decommissioning Decommissioning Task Force (DTF) role Nils Cohrs Head of Decommissioning 27 November 2018

Decommissioning UKCS: Targets & Strategy The OGA promotes and influences cost reduction through Benchmarking to assess performance Creating and publishing metrics with particular focus on high cost elements Ensuring effective sharing of learning Promoting innovative, collaborative contracting solutions Promoting enhanced supply chain capability Improvements to the Stewardship Survey Target of <£39bn based on industry achieving 35% improvement on 2017 P50 probabilistic estimate of £59.7bn (2016 prices) Cost reduction focus areas industries Well P&A 45% of the total UKCS decommissioning cost NNS & CNS removals 19% of the total UKCS decommissioning cost Subsea infrastructure decommissioning 11% of the total UKCS decommissioning cost NNS & CNS platform running costs 6% of the total UKCS decommissioning cost Owners costs Substructure removals Well abandonment Subsea infrastructure – (subsea removals, site remediation, monitoring Topsides removals – (making safe topsides prep, topsides removal) Onshore recycling & disposal How? Engage early on decommissioning plans with operators Publicise benchmarks using OGA Stewardship Survey data Identify cost reduction opportunities/ challenges for decommissioning Promote collaboration across industry Identify and share lessons learned Support supply chain to develop capacity and efficiency Ensure MER UK behaviour implemented

Decommissioning UKCS: Scope >400 Fields with remaining decommissioning activity >320 Platforms to be removed £1.7–2bn Estimated annual cost for next five years >4000 Wells to be plugged and abandoned >2,000,000 tonnes of topside to be removed >1,000,000 tonnes of structure to be removed ~75,000 tonnes of subsea infrastructure to be removed >20,000 kms of pipelines to be decommissioned Where otherwise indicated the time period refers to life of basin Source: OGA Data

35% Need for rapid cost reduction results & learning 5 years £59.7bn Step change – Target to reduce forecast costs quicker 35% £39bn 5 years 2018 2022 2050

One path to 35% cost reduction £59.7billion = 2016 Baseline(2016 prices) Key Enablers Technical scope challenge Technology Supply Chain capability Campaign work = Reducing Decommissioning costs by £21billion (2016 prices) 35% Well P&A 46% Removals 26% Subsea Infra. 13% Owners costs* 13% 98% In addition to savings for remaining 2% of costs £27bn £15bn £8bn £8bn Reduce by Reduce by Reduce by Reduce by ~£14bn (-50%) ~£5bn (-30%) ~£2bn (-20%) ~£2bn (-20%) Notes: Applies deterministic Source: OGA Stewardship Survey 2017 (Decommissioning Survey) percentages against probabilistic costs All costs in 2016 prices Scenario shown is possible route to 35% reduction. Other options may be available Save £21 billion *incl. Project Management

Cost reduction: Wells 35% 98% 180 wells per year £59.7billion = 2016 Baseline(2016 prices) Source: OGA Stewardship Survey 2017 (Decommissioning Survey) No. of wells to be P&A’ed Actuals Forecast Average: 117 wells per year Average : 53 wells per year Average: 10 wells per year = Reducing Decommissioning costs by £21billion (2016 prices) 35% Well P&A 46% Removal 26% Subsea Infra. 13% Owners costs* 13% 98% In addition to savings for remaining 2% of costs £27bn £15bn £8bn £8bn Reduce by Reduce by Reduce by Reduce by ~£14bn (-50%) ~£5bn (-30%) ~£2bn (-20%) ~£2bn (-20%) Save £21 billion Average Number of Wells to be P&A’d (2018-2027): 180 wells per year Notes: Scenario shown is one path to 35% reduction. Other options are available *incl. Project Management

Cost reduction: Removals £59.7billion = 2016 Baseline(2016 prices) Forecast Topsides to be removed = Reducing Decommissioning costs by £21billion (2016 prices) 35% Well P&A 46% Removal 26% Subsea Infra. 13% Owners costs* 13% 98% In addition to savings for remaining 2% of costs £27bn £15bn £8bn £8bn Reduce by Reduce by Reduce by Reduce by ~£14bn (-50%) ~£5bn (-30%) ~£2bn (-20%) ~£2bn (-20%) Source: OGA Stewardship Survey 2017 (Decommissioning Survey) Save £21 billion Average annual removals (2018-2027): 85,000 tonnes per year Notes: Scenario shown is one path to 35% reduction. Other options are available *incl. Project Management

Stewardship Expectation The path to success Late life operation LONG GLIDE PATH ≥ 6 yrs before CoP ≥ 3yrs before CoP 1 - 3 yrs before CoP Benchmarking and cost forecast dashboard Current Status Learning/Knowledge shared Potential for re-use and campaigns Contracting / Execution Strategies Strategy Plan Implement abandonment activities and decom preparations Stewardship Expectation

Good cost reduction progress already being achieved The path to delivering Operator-Supplier alignment is the key challenge: to sustain savings to deliver more Commitment to cost reduction Good cost reduction progress already being achieved £59.7bn £58bn £55.7bn 2017 (P50) cost estimate 2016 prices (P50) like for like: 2017 inventory & 2016 prices (P50) updated 2018 inventory, 2017 prices Question to ask: What is your core business?