SCOTLAND should not become an oil rig “graveyard” because companies have reneged on pledges to restore the North Sea seabed once they are finished with it, according to one of the country’s leading oil economists.

Professor Alex Russell – chairman of the Oil Industry Finance Association, who is also chairing a working group on North Sea decommissioning – said the original plan was for oil companies to leave the seabed in the condition it was in before they started putting down their concrete and steel platforms.

“What we’re seeing in the Brent field is that plans have been put forward by Shell to simply remove the topsides and, in certain cases, leave the legs in situ with buoys to indicate the danger to shipping,” he said.

“That, to me, absolutely beggars belief. Scotland should not be used as a scrapyard for the remains of oil rigs.

“If we are giving tax concessions to oil companies for decommissioning, they should stick to the original plan, which was to restore the seabed back to its original condition.”

Russell was speaking exclusively to The National after it emerged that Scottish and UK firms had lost out in a tendering process for Maersk Oil, which had chosen a Norwegian facility to scrap its Janice production platform.

“As far as decommissioning is concerned, we really need to be critical – it’s bordering on scandalous,” he said. “Decommissioning itself is the death knell of the oil industry and people are saying, ‘The oil industry is dead’. But let’s get some economic activity retained within the UK to make sure that the people doing that decommissioning are UK-based and pay UK taxes on the salaries for people employed there. That makes a lot of sense to me.

“I still believe that every effort, wherever possible, should be made to defer decommissioning in the hope that the oil price will go back up. It’s vested interests that play throughout the whole system and it really needs closer scrutiny.”

Russell said oil companies and their shareholders were “very powerful”, as was the government.

“Perhaps the closeness of the government to the oil industry, whilst at one level was a good thing, may itself need to be looked at again.

“You want all parties represented in the industry, and that includes local authorities. We need to make sure that the voice of everyone is heard and it’s not only the powerful people whose decisions prevail in the interests of themselves and of oil companies.”

He said he understood the economic argument for oil firms taking the decommissioning route, with the UK Government agreeing to pay half the cost.

“That’s taxpayers – you and me – paying that money to the oil industry for them to rectify the damage they’ve done to the North Sea.

“If part of that involves giving money to other countries whether or not they can do it cheaper or put in lower tenders, they [the oil companies] will be getting 50 per cent of that back in the form of not having to pay tax on their profits.

“The UK and Scottish governments need to get their act together here – they should not have put in place a process that allows oil companies full discretion on who they commission to do the work. There should be a bigger national interest taken into account.”

Russell added that decommissioning should only be used as a last resort.

“Once there is certainty that there is no future left for the fields and the rigs that are out there then you pull the plug, there’s no doubt about that.

“You need detailed calculations in order to work that out – to give credit to companies that have been deferring the evil day as far as possible. In fact, that worked to their benefit because they then won the tax allowances from the government for the cost of decommissioning.”

Dr Richard Dixon from Friends of the Earth Scotland (FoES) said: “Alex Russell is absolutely right – there are over 400 of these structures in the North Sea. Some of them could be used to create fish nurseries or be used as bases for wind turbines or for wave power, so there is some potential.

“Nonetheless, there’s no good reason for the oil companies not to do what they promised, so we share Professor Russell’s concerns.”

Last month Shell confirmed it was seeking an exemption from the UK Government to allow the legs of its Brent platforms, which each weigh around 300,000 tonnes, to be left in the sea on safety grounds.

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