P&A problems

Elaine Maslin

July 30, 2014

The Fugro Synergy. From Fugro Drilling and Well Services.

Plugging and abandonment accounts for about 43% of decommissioning costs. Operators and service companies are looking at ways to reduce the bill. Elaine Maslin reports from the 2014 Decom Offshore conference.

Using 15 rigs full time, it would take 40 years to plug and abandon (P&A) all the current 3000 and expected future wells on the Norwegian Continental Shelf.

It’s a striking statement, made earlier this year by Martin Straume, lead P&A engineer for BP in Norway and chairman of Norway’s Plugging and Abandonment Forum (PAF), under industry body Norwegian Oil and Gas.

The UK sector is facing a similar challenge. The overall decommissioning bill for the UK North Sea has been estimated at about £35 billion, but “on recent well abandonment performance, costs could escalate and easily exceed £50 billion,” according to Sir Ian Wood’s UKCS Maximizing Recovery Review, published in February.

P&A is expected to amount to 43% of the overall estimated decommissioning costs, according to an Oil & Gas UK survey conducted last year. A total 5000 wells are expected to require P&A on the UK Continental Shelf (UKCS). In just the next 10 years, some £4.5 billion is expected to be spent on P&A operations on about 800 wells, 480 in the central and Northern North Sea, and 300 of those on platforms, according to Oil & Gas UK’s 2013 Decommissioning Insight.

“Train wreck” wells

A major part of the challenge is the condition wells are in. Not all wells are the same and one in four are a “train wreck,” says Joost Perquin, director of International Strategy Offshore Services, Tetra Technologies. “We have to be cognizant that not all wells are the same,” he told the June’s 2014 Decom Offshore conference in Aberdeen.

Perquin puts wells into four categories, according to their abandonment complexity. Category one are wells with good integrity and no limitations. Category four wells have had sustained casing pressure due to hydrocarbons or overpressures, or are without cemented casing at barrier depths.

Of the 300 central and northern North Sea platform wells, he says, “some—one in four, or 20%, anecdotally—are a “train wreck” (category four). 50% have good integrity (category one) or can be accessed through coiled tubing or a hydraulic work over unit (category two).”

The costs can be high. An average category one well costs about £2.1 million to P&A, rising to £9.3 million for a category four well, he says. Category one wells take about seven rig days and category four 31 rig days, Perquin says, with the cost of using a rig for P&A operations standing at about £300,000/d.

So what can be done? Straume’s comments were made to highlight the size of the P&A challenge, and incite the supply chain to find ways to find new rigless solutions to make the process more efficient and cheaper, and free-up rigs for E&P drilling.

Perquin agrees, and suggests finding alternatives to using a mobile drilling rigs for P&A operations, such as using lift boats, subsea P&A, platform-based rigs, or using a dive support vessel (DSV) or utility based boat—all already used for P&A operations outside the North Sea, he says.

“Rigless P&A can be done on the platform or off a lift boat, jackup, or DSV. You can also get access to subsea wells through riserless intervention,” he says, adding that it is already being done in the Gulf of Mexico. Perquin set out a rigless P&A cost comparison between the UK and Gulf of Mexico, see table.

Alternatives

Companies are marketing alternatives. A joint venture between Malaysia-based Bumi Armada and Fugro (51%/49% respectively) has introduced the Fugro Synergy as a well intervention vessel, which could “take P&A off the critical path” and free up rig time, Mitchell Pinkard, business development manager, Fugro Drilling & Well Services, told the conference. It has a R190 Seacor drilling rig and Varco TDS 250 top drive.

There are others offering alternative services too. FMC Technologies and Edison Chouest Offshore joined forces in 4Q 2012 to create FTO Services, offering vessel-based services for greenfield and brownfield installation, field inspection, maintenance and repair (IMR), and well intervention, including P&A. In 4Q 2014, FTO will take delivery of its first riserless light well intervention deepwater stack from FMC Technologies. It will be able to carry out well intervention at up to 6500ft water depth. The stack will be deployed from Edison Chouest Offshore’s new purpose-built, Ulstein X-bow design, intervention vessel, Island Performer.

CNR International’s Murchison platform. Photo from CNR International.

Singapore-based Keppel FELS and Dutch firm Seafox Group recently announced a partnership to create a purpose-built accommodation jackup with well intervention and P&A features. It will be based on Keppel’s KFELS K Class design, and will be suitable for the Norwegian North Sea environment.

For platform-based operations, Archer has designed a modular drilling package (OE: June 2014). The vertical drilling rig 400.2 offshore modular rig, Archer Topaz, will be deployed in the Norwegian North Sea, on a program for Statoil on the Heimdal field, mobilizing in August, and to be operational by November. It will be used to permanently P&A 12 gas wells on the Heimdal platform on a 34-month contract.

So why is this not being done more? Speaking at the Decommissioning Conference, Roy Aspden, decommissioning projects manager, CNR International, says there’s a natural conservativeness in the North Sea, because of the conditions, I.e., weather, but he thinks rigless operations can be done.

Murchison

CNR recently started its own major decommissioning campaign on the Murchison platform, in Block 211/19, in the Northern North Sea. The 24,500-tonne topside has modules for drilling, production and accommodation, supported on a 27,600-tonne eight-legged steel jacket in 156m water depth. First oil was in 1980, and production was shut in on 28 February 2014 with permanent cessation of production (CoP) on 31 March.

Murchison has 33 platform wells and one subsea well. The P&A program will be broken into three phases, outlined by Aspden:

Murchison has an 11X3 wellbay layout, lending itself to simultaneous operations, Aspden says, and many of the wells, which were mostly in production or being used for water injection before CoP, have been re-completed or sidetracked and the operator has good integrity knowledge.

The first, rigless phase started 31 October 2013, and rig-based P&A operations started in April 2014. Conductor removal operations are due to start in April 2015 and run through to December.

There are other challenges to P&A operations. If platform-based equipment was better maintained, it could be used when it came to decommissioning, instead of having to be upgraded, which could save costs, Steve Andrew, asset closure head, ABB, told the Decommissioning Conference. This includes drilling equipment, but also accommodation and access facilities, which would need to be used. In addition, if equipment is well maintained, it could also potentially be reused or sold on, further saving costs. Three years from CoP there needs to be a “maintain and protect asset value” ethos, and identification of waste streams as early as possible, Andrew says.

Keppel FELS/Seafox’s jackup P&A concept. Image from Keppel Offshore & Marine. 

New regulator to take more interest

According to Bill Cattanach, head of Pilot secretariat, at the Department of Energy and Climate Change, there also needs to better industry planning and collaboration. Changes could be coming, via a new regulator for the North Sea, prompted by Sir Ian’s Review. The new regulator is likely to take more interest in decommissioning, the cost of which the UK tax payer pays 50-75%, through tax reliefs for operators, Cattanach told the conference.

According to Sir Ian’s review, most of the attention, to date, has been on developing decommissioning processes, methods to estimate costs, and managing the build-up of current activity. “There has been a lack of focus on macro-cost reduction or innovation,” it says.

A priority for the new regulator will be to set up a decommissioning forum and to set a target to “radically reduce the cost of decommissioning over the next decade.” The Review says technology will have a key role to play in helping to tackle the existing “significant backlog of well abandonment,” as well as in considering the piece-small approach, looking at cutting technologies, and using light well intervention vessels. In addition, new late-life business models should be considered, it says, and the regulator should, with industry, “investigate game-changing decommissioning concepts, which could radically change the value proposition.”