The thriving global decommissioning market presents an ideal opportunity for OSVs to service the lighter stages of plugging and abandonment work
“The [decommissioning] market is now one of reality not promise,” according to Maritime Strategies International director of offshore Gregory Brown, speaking at the 2019 Offshore Support Journal Subsea Conference in London.
“It is not just a North Sea issue but a global one, with a value of US$78Bn between 2018 and 2029,” he explained.
While the UK market contains the lion’s share of this opportunity (US$23.4Bn), other key areas include the US (US$11.7Bn), Norway (US$8.6Bn), Brazil (US$7.0Bn), Angola (US$4.7Bn), Nigeria (US$3.9Bn), Thailand (US$3.9Bn) and the Netherlands (US$3.1Bn).
Looking particularly at the UK Continental Shelf (UKCS), the wider North Sea, and the US Gulf of Mexico, Mr Brown identified several factors at play. On the UKCS, there are now more wells being plugged and abandoned than being drilled, with 310 shut-in subsea wells, and around 43 plugged wells, along with 409 wells at AB1 and AB2 levels of abandonment and 240 open-water suspended exploration and appraisal (E&A) wells that will require permanent abandonment.
While the UK is by far the largest market, Mr Brown predicted opportunities off Norway, particularly after 2023, and noted that Equinor’s prominence opens up the possibility of batch contracts for decommissioning. In the Netherlands, platform P&A is likely to dominate the market, but there will still be opportunities to tackle E&A wells.
In the US Gulf of Mexico, decommissioning remains a larger volume market than installation, and while this is predominantly shallow water, deep-water opportunities are becoming more apparent. Mr Brown noted that while subsea P&A is increasingly robust in this market, platform life is being extended by brownfield tieback work.
The largest expenditure - at an estimated 49% of the cost - in a decommissioning project is the actual decommissioning of the well itself, rather than areas such as removal of topsides and subsea infrastructure and it is here that Mr Brown sees OSVs as being particularly valuable.
Reservoir abandonment, intermediate abandonment and wellhead capping are the three elements that make up this multistage process, with primary and secondary barriers required at the reservoir and hydrocarbon flow levels, removal of casing strings, and surface plugging all required in the North Sea during P&A.
Historically, these duties would be carried out by semisubmersible rigs, but the secondary surface plug, overhead removal of conductors and the removal of casing strings could be carried out by riserless well-intervention vessels (RWIVs).
While RWIVs are not suitable for all work, Mr Brown explained that “full P&A of a well is very much possible for low- and medium-complexity wells using a RWIV, typically in shallow waters.”