Norway gives new lease of life to old oil platforms

At an industrial yard in southwestern Norway, decommissioned oil platforms are slowly being dismantled for a second life in the circular economy.

A decommissioned oil rig in Norway.
Oil rigs in Norway are being stripped down for their valuable steel. Pictured: the Decommissioned oil platform Gyda set to be demolished is pictured in a yard in Stord (Norway) It could have been their cemetery, but in this construction site in southwestern Norway, old oil platforms, emblems of the age of fossil fuels, are experiencing a new life stamped with the seal of the circular economy. Photo by Alexiane Lerouge / AFP

Three gigantic disused platforms stand on the docks on the island municipality of Stord where they are being taken apart bit by bit — as much as 98 percent of their total 40,000 tonnes is suitable for recycling.

“If you come here in a year-and-a-half, you will see nothing left”, says Sturla Magnus, a senior official at Aker Solutions, a group specialised in both building and dismantling oil platforms.

Behind him, workmen in hardhats and fluorescent jackets are busy on the three structures: the platform from the Gyda field that was closed in 2020, and two others that have paid their dues at the Valhall field still in operation.

A worker cuts down a decommissioned oil rig.
A worker cuts metal from a decommissioned oil platform in a yard in Stord. It could have been their cemetery, but in this construction site in southwestern Norway, old oil platforms, emblems of the age of fossil fuels, are experiencing a new life stamped with the seal of the circular economy. Photo by Alexiane Lerouge / AFP.

Once the security inspections are complete and the electrical equipment and dangerous materials like asbestos have been removed, the remainder — the giant, empty shells — are left to powerful cutting machines.

The most attractive waste are the tens of thousands of tonnes of high-quality steel, which can be reused on new oil platforms, other industrial structures or offshore wind turbines.

“This is steel that has to stand up to the harsh weather conditions in the North Sea. In other words, this is the best there is”, says Thomas Nygard, project director for decommissioning at Aker Solutions.

While the company is a player in the highly polluting oil industry and still makes more oil installations than it demolishes, it is in favour of
recycling. According to various estimates, one kilo (2.2 pounds) of recycled steel generates 58-70 percent less greenhouse gas emissions than a kilo of new steel.

10,000 installations to dismantle

The North Sea is one of the oldest offshore oil and gas basins in the world and is gradually being depleted. Many of the oil platforms there are coming to the end of their life spans.

In a 2021 report, the industry association Oil and Gas UK (OGUK) — which has since changed name to Offshore Energies UK (OEUK) — forecast that more than one million tonnes of North Sea platforms would need to be dismantled by the end of the decade.

That is a large market, and one that is growing. Several years ago, OGUK’s forecast was for 200,000 tonnes.

“If you look globally, it’s probably close to 10,000 installations which are going to at some point in time come back to shore”, Magnus says. Aker Solutions’ current workload is scheduled through 2028.

Meanwhile, some platforms are being maintained despite their advanced age. One of Norway’s oldest platforms, Statfjord A, has been in use since 1979. It was due to be taken out of service in 2022, but oil giant Equinor decided in 2020 to extend its life span until 2027.

The same is true for two other platforms in the same field, Statfjord B and C, which are only a few years younger, but have been extended until 2035.

The reprieve is due to the remaining oil reserves which are believed to be “considerable”, a decision sure to have been sugar-coated by soaring oil prices.

Environmental stakes

Nevertheless, even some environmental activists are reluctant to see the platforms disappear entirely.

The earliest installations were made with legs of concrete — metal was preferred for later models — and according to the Norwegian branch of Friends of the Earth, the cement made for “fantastic” artificial corals because of its rough, pock-marked surface.

“All those who have worked on a platform will tell you: there are a lot of big fish that live nearby because there’s no industrial fishing and the fish can grow to be up to 10 years old”, says the group’s marine biologist, Per-Erik Schulze.

The organisation has therefore called for the cement pillars to be left at sea, difficult as they are to uproot. The rest can be dismantled and marine reserves created around the sites.

After siphoning the depths of the oceans for decades, Norway’s oil sector could thereby end up helping to protect them — even if just a little.

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Norway’s oil fund demands investments be carbon neutral by 2050

Norway's sovereign wealth fund, the largest in the world, announced Tuesday that it will require that the approximately 9,000 companies it has invested in worldwide achieve zero net carbon emissions by 2050.

Norway's oil fund demands investments be carbon neutral by 2050

 “We set a target of net zero emissions by 2050 at the latest for all companies,” Carine Smith Ihenacho, the fund’s chief governance and compliance officer, said while announcing the fund’s new climate action plan.

“We will engage with the companies to reach this target by setting credible preliminary targets and creating plans to reduce their direct and indirect emissions of greenhouse gases,” she added.

According to the IPCC, the UN climate expert panel, achieving carbon neutrality by 2050 is necessary in order to limit global warming to 1.5 degrees Celsius, in line with the goals of the Paris Agreement.

Paradoxically, Norway’s wealth fund is fuelled by the Norwegian government’s oil revenues and it is also known as the oil fund. It is worth more than 12,000 billion Norwegian kroner (nearly $1,200 billion) and holds equity in over 9,000 companies in 70 countries. To date, only about 10 percent of these companies have set a carbon neutrality objective.

The fund’s ambition is to help groups in which it is invested develop a climate plan by maintaining a dialogue with them, using its voting rights at general meetings and, “as a last resort”, divesting its shares, Ihenacho explained at a press conference.

READ MORE: What does Norway do with its oil money?

Governed by a set of ethical rules, the fund is among other things prohibited from investing in companies responsible for serious environmental or climate damage and coal, but it can also drop companies on its own initiative on purely financial merits.

“Sustainability is a prerequisite for good returns in the future,” noted Oystein Borsum, the deputy governor of the Norwegian central bank, which oversees the fund.

The fund has already divested its assets in four companies whose greenhouse gas emissions were deemed excessive. The new plan follows up on the Norwegian government’s decision to strengthen the fund’s climate mandate.

In the first six months of 2022, the fund’s value fell by 1,680 billion kroner, mainly due to turmoil in global stock markets. The only sector to show a positive return was the energy sector, including oil and gas companies, which benefited from soaring prices in the wake of the war in Ukraine.