HUNDREDS of jobs are to be created by a new entrant to North Sea decommissioning which was unveiled yesterday Well-Safe Solutions, set up by a group of oil industry stalwarts – including Alasdair Locke, Mark Patterson, and Paul Warwick – aims to provide a ground-breaking approach to the safe and cost-efficient decommissioning of subsea wells.

The new start company, which aims to attract £200 million in investment and create 400 new jobs, will offer a specialist well abandonment service that allows operators to meet the challenges and regulatory imperatives around decommissioning, while significantly reducing costs.

Well-Safe has secured funding from Scottish Enterprise, including investment from the Scottish Investment Bank and a regional selective assistance grant, in addition to the initial private funding provided by the major shareholders, which will enable the company to invest in assets and create jobs.

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Bringing together a wealth of subsea oil and gas expertise and experience with dedicated marine assets and equipment, Well-Safe claims to be the first-of-its-kind tier one company with a complete P&A [plug and abandonment] capability from front-end engineering and design to project execution.

Executive director Mark Patterson said: “The market dynamics in oil and gas have changed significantly. Before the collapse in oil price, operators were focused on maximising production, costs were very high and assets scarce and, with no real regulatory imperative, decommissioning was pushed back.

“Cost and safety are still paramount but operators are now having to face up to the well abandonment challenge. They need to prioritise decommissioning activity and, with an increasing stock of ‘shut-in’ wells, more incentives, low asset utilisation and therefore lower rates, the economics for P&A have become more compelling.”

Within a highly fragmented market, the new-start company wants to take away the need for contracts with multiple service providers and instead offer a “one-stop-shop” for operators’ P&A requirements.

Alasdair Locke, who co-founded Abbot Group in 1992 and served as its CEO is a major investor and will take up the role of non-executive chairman of Well-Safe.

He said: “The industry has been desperately seeking much more cost-efficient ways to tackle late-life activity and I strongly believe Well-Safe’s business model provides the solution.

“It will however require collaboration from operators and government, but if we think smarter and work hand-in-hand with stakeholders we can revolutionise how we deliver subsea well decommissioning.

Expenditure on well abandonment in the UK Continental Shelf is forecast to double to £1.1 billion in 2017.

Kerry Sharp, director of the Scottish Investment Bank from Scottish Enterprise, said: “To remain at the forefront of the global oil and gas sector, Scotland has to adopt new approaches and innovation and also be ready to make the most of the new opportunities when they appear.

“Well-Safe is a good example of a company taking advantage of the current decommissioning market opportunity, by adopting new approaches, and it will support another area of growth within the oil and gas sector, with the potential to generate a material number of new jobs.”