Shetland is poised to lead the way in the multi-billion pound business of decommissioning redundant oil industry structures in the North Sea.

As oil fields start to become uneconomic, oil firms are being left with the task of dismantling their platforms and rigs.  The highly technical job of dealing with the redundant structures is set to provide Shetland with a new industry.

SBS Logistics has taken the first step to achieving this, by establishing a decommissioning base in Lerwick.  They hope to build on a 30-year relationship which Shetland has enjoyed with the North Sea oil and gas industry.  This link has helped produce a skilled labour workforce experienced in the offshore industry.

Islanders hope to continue their relationship with the multi-national oil companies and assist in the decommissioning of their offshore structures.

SBS Logistics, with financial backing from Shetland Enterprise, is currently establishing a base in Lerwick to carry out decommissioning work.  They are the first firm in the UK to have a contract to carry out decommissioning work for the oil industry.  The company is part of a consortium - led by Aker Kvaerner - set up to bid for decommissioning projects.  .

As a result, the first project to be undertaken in Shetland is due to start in 2006.

The Total Frigg Project will see approximately 20,000 tons of material being shipped 125 miles to Shetland for processing.  This project will allow the company to gain the required expertise to work on and bid for additional contracts in the future - with the aim that Shetland becomes a world leader in small-scale onshore decommissioning activity.

SBS is set to construct a decommissioning pad and controlled discharge area at the Greenhead Base in Lerwick.  It has extensive concrete quaysides that, along with ample open laydown and storage areas, make it particularly suitable for the offloading and onshore dismantling of offshore structures.  SBS Logistics will be responsible for ensuring that the high environmental standards in Shetland will be maintained

The total cost is approximately £1,000,000, with £96,800 (10%) coming from Shetland Enterprise. SBS Logistics is pumping the balance of the funding into the project.

On top of the Total Frigg project, SBS is currently bidding for one additional contract, with two more potentially coming up later this year.

As a result, it is anticipated that direct job creation in Shetland will be 20 direct jobs with SBS Logistics with opportunities for local companies to sub-contract, creating further employment opportunities.

SBS Logistics director Murdo MacIver said: "We are delighted to be supported by Shetland Enterprise in this project.

"We hope this will be the start of a major new industry for Shetland and that more decommissioning work will be coming to the islands."

Dr Ann Black, Chief Executive of Shetland Enterprise said: "This project will bring a new industry to Shetland providing highly skilled jobs, in an industry sector we know well."

"This project will allow SBS Logisitics to begin to develop a track record, raising the likelihood of gaining contracts in the future.  This is a very exciting opportunity, not only for SBS Logistics, but for Shetland."

"The islands have significant expertise gained over 30 years of working in the oil and gas industry. The skilled workforce is already in place."

Link to SBS web site