Decommissioning Costs Can Be Reduced

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Many offshore decommissioning costs are higher than necessary because of decisions made during the initial engineering and construction for an oil or gas field. Economics for a 60,000-BOPD oil field show that a reduction in decommissioning costs of 50% can increase the project net present value (NPV) by 13%. A 5-year range of decommissioning data collected from throughout the world has been studied. Key areas have been identified in which decisions made during design affected the eventual decommissioning costs.

Introduction

Decommissioning/removal of an offshore platform in 100 m of water is a complex project. Decommissioning of a platform in a severe environment can cost hundreds of millions of GBP. New-development project teams need to spend as much effort preparing for decommissioning in the design stage as they do preparing for the maintenance of the platform.

Costs can be reduced during the actual decommissioning work by application of a contracting strategy and the use of previous experience and new technology. However, many costs are fixed because of the design features of the fixed platform or compliant structure. This paper provides guidance on how to engineer for decommissioning during the design stage of a new project.

This article, written by JPT Technology Editor Chris Carpenter, contains highlights of paper OTC 25247, “Decommissioning Costs Can Be Reduced,” by Alan William Stokes, SPE, WorleyParsons, prepared for the 2014 Offshore Technology Conference, Houston, 5–8 May. The paper has not been peer reviewed. Copyright 2014 Offshore Technology Conference. Reproduced by permission.
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Decommissioning Costs Can Be Reduced

01 January 2015

Volume: 67 | Issue: 1

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