Decommissioning and Abandonment
Decommissioning is a focus item for the newly formed Oil & Gas Authority (OGA) in the UK. The OGA Corporate Plan (www.gov.uk/government/consultations/oga-corporate-plan-draft-for-consultation) provides an interesting view of decommissioning as seen through a North Sea lens. With the current low-oil-price environment, the cost of decommissioning is seen as a key driver for the ongoing economic viability of the basin.
What does “good” look like for decommissioning in the North Sea? Like the Gulf of Mexico? Probably not exactly; however, many lessons learned by the operator community, supply chain, and industry can be considered and adopted for the basin. Here are a few thoughts on what “good” might look like.
- Operators should share their view of timing and key drivers for timing change for the run up to cessation of production (COP). The Oil & Gas UK Decommissioning Insight report is a good generic starter (oilandgasuk.co.uk/decommissioninginsight.cfm). Operators can shift to the next level of transparency now by sharing asset-specific information (i.e., facility drawings or well schematics), condition, and COP.
- Start early in planning (5–7 years before COP) to identify and actualize possible cost savings. This is a strategic enabler for the supply chain; they need information and early access to the project
- Keep things simple. Be flexible. Decommissioning is not a first-oil schedule-driven project. Operators need to approach decommissioning as a demolition project vs. a capital or brownfield project. Step back and let a knowledgeable, empowered supply chain deliver.
Supply Chain—Be Strategic
- The supply chain should provide integrated solutions relative to today’s portfolio of projects. The supply chain should have “skin in the game” with remuneration coupled to performance.
- The supply chain sees the broader market view, whereas the operator view can be somewhat myopic. Use this view to bundle and campaign work programs. The operator can enable the supply chain through early sharing of asset details and flexibility in contracting and delivery.
- Decommissioning must be focused on delivering the right scope, no more. Cost reductions can be achieved equally through performance or by selecting the right scope. Decommissioning should never be seen as a replacement for capital-project activity. Industry must continually strive for low-cost delivery year after year.
- Contracting must consider appropriate ownership of risks, both during the project and in perpetuity.
- Industry should share performance and scope data, warts and all. Without a creditable baseline, industry has nothing by which to set realistic market expectations or to performance-manage continuous improvement.
Recommended Additional Reading
SPE 173693 Coiled Tubing Completes Unique High-Pressure Well Abandonments in Remote Alaskan Field by Brendon Webb, Schlumberger, et al.
SPE 173694 P&A on a Deepwater Compliant-Tower Asset Using Hydraulic Workover (HOW): Addressing the Challenges for Successful Execution by Ralph R. Sinno, Halliburton, et al.
SPE 175426 Preparation for Cost-Effective Decommissioning and Abandonment of Subsea Pipelines by Julie Burke, Intecsea, et al.
Win Thornton, SPE, is is vice president of decommissioning, global projects organization, at BP. He has more than 35 years of experience in offshore construction and decommissioning projects working as an operator for BP, Chevron, and Oxy; as a contractor from Brown & Root and WorleyParsons; and as a consultant for Winmar and TST. Thornton holds a BS degree from the Georgia Institute of Technology and an MS degree from the University of Houston. His recent work includes offshore decommissioning and reuse projects in the Gulf of Mexico, west Africa, California, Alaska, southeast Asia, and South America. Thornton has championed the environmentally sound and cost-effective disposal of obsolete platforms through placement in state-sanctioned “Rigs to Reefs” programs. He is a member of the JPT Editorial Committee.
Decommissioning and Abandonment
Win Thornton, SPE, Vice President of Decommissioning, Global Projects Organization, BP
05 December 2015
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