65% of North Sea fields to be abandoned in next decade

Douglas Westwood, Deloitte and Venture look into the upcoming decommissioning bonanza.

Douglas Westwood and Deloitte have authored The UKCS Offshore Decommissioning Report 2010-2040* (UK-ODR). In the next decade, 65% of the UK’s producing fields will be decommissioned including 45% of platforms and two thirds of all subsea units. Looking out to 30 years hence—over 250 platforms will be wholly or partly deconstructed. Some 5,000 surface and subsea wells and 15,000 km of pipeline will be removed before 2040. Cost estimates for the massive clean-up range up to $30 billion. Assuming, that is, that sufficient engineering capacity, expertise (and funds?) can be found.

Deloitte’s PetroScope economic modeling system was used to provide the economic analyses in UK-ODR. The report includes models of field numbers and facilities, economic limit (production limit) as well as incremental and cumulative abandonment expenditure (Abandex). The report envisages a ‘step change’ scenario with the development of a new class of super heavy lift vessels capable of a 15,000 ton plus lift. Regulatory processes and key technologies are also investigated along with an overview of completed, planned and in-progress decommissioning projects and detailed case studies.

Venture Information Management blogger Mike Grant recently looked at another facet of the big decommissioning. The UK government’s Health and Safety Executive issued ‘Key Programme 4’ earlier this year focusing on Ageing & Life Extension of Offshore Installations. KP4 addresses concerns over the safety and integrity of offshore installations and sets out a variety of requirements for staff competency, management responsibilities and measures taken to ensure ‘complete and correct information and documentation’ at all stages of the process. Lack of information, meaning that the Duty Holder is not able to satisfy the regulatory requirements, can lead to shutdown. Venture recommends a ‘health check’ of corporate documentation for KP4 compliance.

* www.oilit.com/links/1011_1

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