Decommissioning costs per asset are falling, as operators realise greater efficiencies, leverage lessons learnt, reduce complexity and utilise specialised equipment
From now until 2028, some US$78Bn is expected to be spent on decommissioning and well abandonment projects, according to UK-based maritime advisors and research consultants Maritime Strategies International (MSI). Such spending may well be a drop in the bucket, considering there are some 6,000 offshore structure and facilities and more than 30,000 wells worldwide that will one day need to be removed and recycled when they reach the end of their service lives.
Reduced decommissioning costs, says MSI associate director-offshore Greg Brown, are a result of lower drilling rates and greater efficiencies, with “some operators reporting savings of nearly 20 days per well between the start and end of a project.”
Despite falling decommissioning costs, he notes, operators might not be in such a rush to shutdown aging assets if they can squeeze out a bit oil at that right price. “Whilst the imperative of cost control across portfolios has driven the shutdown of some assets, greater production efficiency alongside a stronger appetite for brownfield investment is extending the life of offshore assets. As lifting costs have fallen, so too has the rush to decommission,” says Mr Brown.
With the offshore oil and gas market still in a slow recovery, those decommissioning projects that are moving forward are still attracting plenty of attention. “The margins earned by vessels in decommissioning are certainly lower than the peak of the market when such assets were performing large upstream developments,” notes Mr Brown. “They are, however, stronger than those being offered in the offshore renewables market. This helps explain why the likes of Saipem continues to bid the work and why Heerema and Allseas are also active.”
Increasingly experienced decommissioning companies are forming partnerships to leverage their combined expertise. One such partnership cited by Mr Brown was Fairfield Decom, formed in May by Heerema Marine Contractors, Decom Energy and AF Offshore Decom, a subsidiary of the Norwegian contracting and industrial firm AF Gruppen.
Headquartered in Aberdeen, Fairfield Decom has ambitions of creating a new business model designed to reduce complexity and the number of contractual arrangements and deliver operational efficiency, cost-effectiveness and predictability, whilst contributing to the 35% cost reduction targets set by the UK’s Oil and Gas Authority (OGA).
At the announcement of the formation of the partnership, Fairfield Decom managing director Graeme Fergusson, said the partners’ background as operators “means that we understand what the E&P community wants – an integrated solution that is technically robust, commercially creative and that will deliver a safe, cost-effective and environmentally-sound solution.”
UK-based Offshore Decommissioning Services Ltd (ODS) is developing a dual-fuel semi-submersible crane vessel called the Moonraker 1 which it describes as “disruptive technology” for the decommissioning market. With Moonraker 1’s six-column, stabilised, semi-submersible design, ODS expects the vessel to have an increased window of operability — over 300 days per year. Key in the vessel’s design are 12, 2,500-tonne heave-compensated lifting beams that allow for a 30,000-tonne single topsides lift. Such a lift would surpass that of Allseas’ Pioneering Spirit, which completed the record single-lift removal of the 25,000-tonne Brent Bravo topsides in the North Sea in June.
Disposal yard Able UK is handling the dismantling and recycling of the Brent Bravo platform. It is the second platform from Shell’s Brent field to be decommissioned at Able Seaton Port – the first, the Brent Delta, arrived in May 2017. Both were transported from north-east of Shetland by Pioneering Spirit.
With about 30 decommissioning projects to its credit, Saipem’s most notable might well be the removal of the BP Miller platform in the UK North Sea that was completed in 2018. With a 28,000-tonne topsides and 17,000-tonne jacket, the platform offered a challenge. After two years of engineering studies, working closely with BP and duty holder of the installation Petrofac, Saipem choose a ‘reverse installation’ methodology as the most cost-effective, safest and most efficient decommissioning strategy.
Saipem deployed its dynamic positioning class 3 capable, semi-submersible crane and pipelay vessel Saipem 7000 to perform single lifts, removing and transporting the various modules from the topsides to the disposal yard. Using its twin revolving bow-mounted Amhoist cranes in tandem, Saipem 7000 can lift 14,000 tonnes.
As the removal contractor for the BP Miller platform, Saipem says it was able to reduce the environmental impact of the operation by recycling as much as 97% of the equipment.
The decommissioning work was performed under an engineer, procure, remove and dispose (EPRD) contract awarded by BP in 2016.
Plug and abandonment
Through an alliance formed in July with Chinese offshore and subsea solutions provider COOEC, UK-based Expro is developing a deepwater riserless well intervention (RWI) system to carry out cost-effective intervention or abandonment operations on all types of subsea wells.
COOEC Offshore and Expro expect to be able to deploy the new RWI system in 2020 on the dynamic positioning class 3-capable inspection, maintenance and repair (IMR) vessel Hai Yang Shi You 287. For efficient well construction, well intervention and well plug and abandonment (P&A) activities, the IMR vessel will have a dedicated handling and deployment system.
Built by Huangpu Shipyard in China based on an ST-259 from Skipsteknisk, the diesel-electric IMR vessel has an overall length 126 m, beam of 25 m, depth of 10.8 m and draught of 7.7 m, with a deck area of 1,590 m2 and accommodation for 120. For subsea lifting operations, Hai Yang Shi You 287 is fitted with a NOV Hydralift offshore crane with a 250-tonne capacity, capable of working in 3,000 m of water. A secondary crane supplied by MEP has a capacity of 25 tonnes, capable of working in 1,000 m of water.
Expro light well intervention services (LWIS) global sales manager Kevin Illingworth said the alliance between Expro and COOEC would allow “both companies to combine our efforts and provide a very attractive commercial alternative to rig-based intervention.”