Decommissioning and Abandonment
So you don’t want to do decommissioning; just get over it. Decommissioning is a part of the life cycle of any oil and gas asset. Publicly traded firms account for these future liabilities on their books through the requirements of Financial Accounting Standard 143 from the Financial Accounting Standards Board and International Accounting Standard 37 from the International Accounting Standards Board. These costs have been considered and accounted for in the development economics for every project. Delaying decommissioning through life extensions or divestiture is laudable; but, ultimately, decommissioning will need to occur.
As discussed last year, early planning for decommissioning, along with an integrated late-life/decommissioning strategy, can deliver value. The supply chain is now actively working to develop low-cost solutions and is gaining valuable experience through recent projects (as documented in many recent SPE papers). Owners need to engage the supply chain early with the relevant asset data for planning and execution of decommissioning. Don’t tell them how you want it done. Owners need enough internal expertise to be informed buyers and to select the optimal market-driven solutions offered by the supply chain. Owners then must step back and let the supply chain deliver.
Another value opportunity lost appears to be decommissioning during the down cycle. Minimum costs and maximum supply-chain engagement occur during the periodic down cycles; plan to take advantage of these guaranteed cost-saving opportunities. Decommissioning—just get on with it, using the right integrated late-life/decommissioning strategy delivered during a down cycle.
This Month's Technical Papers
Recommended Additional Reading
IPTC 18982 Net-Environmental-Benefit-Analysis Application for Jacket-Decommissioning Techniques by J. Kanmkamnerd, PTTEP, et al.
OTC 27672 Baseline for Planning and Cost Estimation of Brazilian Decommissioning by F. Mimmi, Genesis, et al.
SPE 186133 Brent Charlie Ultralate Life: Managing for Optimal Decommissioning by F. Sanwoolu, Shell, et al.
Decommissioning and Abandonment
Win Thornton, SPE, Vice President of Decommissioning, Global Projects Organization, BP
01 January 2018
What Happens When Facebook Technology Meets Oil Well Records
The same tools that make it fun and easy for you to see a friend's updates online are also pretty good at tying together unconnected databases holding valuable well information.
The UK North Sea: How To Manage an Aging Basin
A recent spike in production has engendered a cautiously optimistic outlook for the UKCS, but will it do anything to stave off the overall decline of the mature basin?
Coiled-Tubing Telemetry Intervention in Shut-In Conditions
When a new horizontal well in Asia was incapable of unassisted flow, coiled tubing (CT) was selected for the perforation and stimulation intervention. Mechanical isolation was required to ensure that the stimulation fluids entered only the new zones.
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28 November 2018
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