(Bloomberg) -- The amount of money spent on dismantling aging North Sea oil and gas infrastructure could overtake capital expenditure by 2040, according to the sector’s leading UK trade group. 

More than 1,000 wells are set to be sealed in the region from now until 2027, while 200 new wind turbines will be installed, Offshore Energies UK said in its Decommissioning Insight 2023 report. That represents “a considerable infrastructure and workforce challenge,” it added.

“This is a £20 billion business opportunity for our world-class decommissioning industry, and it is vital it is handled properly so we do not lose the work to overseas competitors,” said Ricky Thomson, OEUK decommissioning manager and author of the report.

The North Sea is undergoing a massive energy transformation as renewables take on a greater role and many oil and gas wells become depleted after decades of use. Production of the fossil fuels in the UK’s portion of the basin is declining by 7% a year, according to OEUK. Some producers say that a windfall tax on the sector will curb output further.

Decommissioning accounted for 12% of total oil and gas expenditure in the country last year, the industry group said. “In the right fiscal environment,” that figure could increase to 25% in 2032 and overtake capital spending by 2040.

UK operators spent £1.6 billion on decommissioning in 2022 and are forecast to spend £2.2 billion this year. Spending will remain above £2 billion a year thereafter. 

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