Sizing up for decom

Emma Gordon

October 30, 2017

As decommissioning gathers pace, the debate around how to make the entire process more efficient – safely – at a reduced cost intensifies. Emma Gordon reports.

Are we thinking big enough, or is the challenge smaller than we think? Certainly, the UK Oil and Gas Authority’s (OGA) call this year for industry to reduce its decommissioning costs by at least 35%, from an estimated value of around £60 billion ($80 billion) was described by Steve Phimister, a session moderator at SPE Offshore Europe 2017, as an “ambitious target.”

Time to retire. In August, the Buchan Alpha production vessel arrived in Dales Voe, Lerwick, Shetland, for disposal at Veolia and Peterson’s facility. It is believed to be the first major North Sea floating production vessel facility to be disposed of in Scotland.
Operated by Repsol Sinopec Resources UK, Buchan Alpha, weighing 12,000-tonnes, was a semisubmersible moored floating production unit. It was built in 1973, as a drilling rig, and converted for production purposes in Stornoway in 1978-80, starting production in 1981, on the Buchan field, in blocks 21/1A and 20/5A. It also produced the nearby Hannay field. Production, which totaled about 148 MMboe, ceased in May 2017. Veolia aims to achieve 98% recycling of the structure. Photo from Veolia/Peterson.  

That said, the consensus at this year’s SPE Offshore Europe was that the target was achievable — and could even be beaten, if the industry changed its approach — including altering the way operators and the supply chain work together — as well as deploying specialized technology, and encouraging innovation.

“You really can’t approach the decommissioning challenge in traditional ways, traditional thinking will get you traditional results,” said Phimister, who is upstream director UK & Ireland, Shell. “We really do have to think quite deeply and differently about it, and draw on all the expertise in the industry, take on the issues… find the solutions and smart ways of working together whether in execution strategies or contracting strategies.”

CNR International’s decommissioning project manager, Roy Aspden, said another important question was how the industry was developing the capability to respond to the sheer size of the decommissioning challenge: around 470 installations will need to be decommissioned over the coming decades in the UK North Sea alone.
Aspden said, from CNR’s perspective, “ignorance had fueled collaboration.”

“Six years ago, we had zero [decommissioning] capability in the company,” Aspeden said. “And [we] faced decommissioning the tallest, deepest, most northerly [installation] in Murchison. So, we needed to build capability pretty quickly.

“Looking back, we intensely took part in conferences, work groups, forums, and stakeholder workshops… to help us inform ourselves and build capability.

“Where are we now,” he asked. “Thankfully, we’re two years ahead of the original schedule, 15% under budget; 33 wells have been abandoned, and 40,000-tonne removed. What’s left is one subsea well to abandon starting next spring: a decent performance on our first outing.”

Aspden added that decommissioning is a “fertile ground” for innovation. As an example, he said 3D printed models were “tremendous” for offshore planning and work permitting, saying that “every time a cut was made on the jacket, a little hacksaw came out to make the same cut on the 3D printed model.”

Now the operator has set its sights on Ninian Northern facility, with the plan to de-man next year.

“In terms of building capability, our simple strategy is working for us, I think that gives us some kind of confidence that the direction of the cost reduction that OGA has set for industry should be attainable,” he said.

Aspden said that a revised contracting approach was particularly effective. Here, the operator described what it wanted to achieve, but did not prescribe the method, sequence or timing: instead leaving those specifics to the supply chain.

Perhaps not surprisingly, that’s a view shared by Ronald van Waaijen, vice president, sales and business development, Europe, Heerema Marine Contractors, who said that the industry should not apply the same process used in E&P projects for removal. “Tell us what to do: let the contractor determine how to do it. Don’t be shy to share information.”

“Accept decommissioning as a task that just has to be done; see the upside in minimizing the pain — it’s actually encouraging to manage to reduce the pain — change the approach: different drivers demand a different contractor approach,” he added.

Greta Lydecker, managing director, Chevron Upstream Europe, also thinks the 35% target is doable. Lydecker was previously president of Chevron’s Environmental Management company, which provides environmental liability, management and decommissioning services for the operator in more than 50 countries worldwide.

Since it was established in 1998, projects have included well, offshore platform and pipeline decommissioning and abandonment, site remediation and cleanup for refineries, service stations and terminals.

“If you can do more in a campaign, you’ll find ways to take costs down,” Lydecker said. “Maybe that involves not just Chevron doing work, but finding partners who are also in the same mode of [decommissioning] and bringing them together as a campaign.”

She said that standardization is key, as is involving the right partner — whether from, for example, the supply chain or a regulator — as early as possible.

Specialized technology, she said, is also critical, citing Chevron’s work with Versabar in the US Gulf of Mexico developing a new method for severing subsea structures.

“In 2005-2008, we suffered some of the most severe and significant hurricanes in the Gulf of Mexico. The group faced decommissioning that was not just picking up the jacket and topside, they were having to go down and pick up things that were toppled on the seafloor…. We really weren’t keen on putting divers in the water to go down to do that kind of work.”

Versabar’s “giant claw” tool could go down and pick up these toppled platforms, significantly reducing diver hours, as well as the associated risk.