The roadmap to retiring

Dorothy Burke

August 1, 2014

Images from Decom North Sea

More than £40 billion is expected to be spent on decommissioning in the next 25 years in UK waters alone. Dorothy Burke looks at how viewing decommissioning as new phase in an asset’s life-cycle could help better plan these complex projects.

Knowing where you are going and how you are going to get there is important. Whether going on business trip, or executing a multi-million pound contract, the outcome of the journey and its ultimate success is due to preparation and planning.

A Decision Roadmap ensures you make sound decisions about every stage of that journey. You need to identify the viable options and take actions to progress the project, but you must choose the right options based on sound reasoning, rather than being left with only one option due to poor planning. Understanding what is important, gathering the correct information and involving the right people is vital.

Since the 1970s, through careful planning and collaboration, the North Sea oil and gas industry has steadily developed into one of the strongest and most highly regarded clusters in the world. For years, platforms have been maintained and modified to provide the very best yield, but, it is now recognized that a growing number of oil and gas assets have either reached, or are approaching, the end of their economic life. In accordance with current regulations, assets will have to be decommissioned and removed. This presents challenges for the owners and operators, while offering major business opportunities for engineering consultants, contractors, and service specialists.

Offshore decommissioning is a complex series of activities, each calling for its own level of skill and expertise. From operations to communications, engineering to legislation, each strand is vital. Understanding how a platform was installed, how it was operated, and the expectations for when it reaches the end of its life is a collaborative process which requires transparent knowledge share.

Decommissioning is seen by many as reverse engineering, essentially deconstructing an installation. However, it is being increasingly recognized that decommissioning is actually very different from the capital investment projects and not suited to the same “tried and trusted” procedures and process.

The typical life cycle of an installation follows these eight key stages (see image below):

The decision roadmap

The critical questions are; at what point in this cycle is consideration given to decommissioning and when are plans best put in place? Many believe that decommissioning projects need to be managed differently and the traditional “appraise, select, define, and execute” approach does not adequately address the unique features of decommissioning.

A series of workshops facilitated by Decom North Sea (DNS) with a group of operator and contractor members, is discussing decommissioning or “retiring” an asset as a new phase in its life-cycle, rather than treating it as a new project. The proposed retire-phase recognizes the transition from operation to decommissioning. This distinction, while seemingly small, will enable the industry to look at things differently and help plan, communicate, prepare for, and manage the decommissioning effort.

The transition period from operations to decommissioning occurs over a period of time. Each asset is unique, but the same options require consideration. Not all elements of an asset mature at the same time or pace; some are complete prior to cessation of production (COP), while others occur years after COP. This results in multiple, targeted assessments of readiness, with a complex series of activities to be carried out in a certain order against a predetermined timescale.

When preparing for decommissioning, there are a number of options that the operator must consider. These are summarised in a decommissioning program, which is submitted to government (the Department of Energy and Climate Change) using a standard template format, which DNS worked with industry and DECC to create.

In contrast, at the moment there are no standard planning processes or procedures in place to manage the transition from operations to decommissioning, and there is no documented toolbox for managing this series of events. There is however, consistency in the decisions that need to be made, the timing at which these should be considered, and the key enablers for decommissioning to be successful.

The aim of the initial workshops is to learn from the approaches used by different companies, identify the gaps in the decommissioning planning process, and define what tools may be useful to assist planning during the transition phase.

Elements discussed include planning for 10 years before COP, a strategy matrix, covering scope, control, contracting and technology, and a decision road map, indicating key decisions, when they need to be made and by whom. DNS believes that creating such a tool box would assist in decommissioning projects of different sizes and complexity, and would enable decommissioning teams to better scope the planning process and the impact of decision making throughout the transition phase.

Next steps are likely to be a call for workgroup members to take part in a collaborative effort to create a documented framework and develop a toolbox to address this need.

Marathon Oil is a DNS member which champions the decision quality (DQ) approach to project planning and decision making. It takes a collective consensus on project decisions, by identifying which decisions are “key,” when they should be made (both their timing and their relationship to other decisions), what options are available and what selection criteria should be used. The DQ approach also establishes who should be involved in the decision making process, which has helped to initiate and manage interfaces and collaboration, as well as identify dependencies, impacts, and risks across the business.

By taking an overview of the decision making process, Marathon Oil can prioritize and focus its efforts. It believes this has helped significantly in communicating with management and other stakeholders, which in turn has led to a formal interface management and an improved way of working.

With more than £40 billion anticipated decommissioning spend in the next 10 years in the UK North Sea alone, it’s clear that planning for decommissioning is critical to success and that while every asset is unique, many face similar planning challenges. DNS believes that the creation of a decision planning roadmap and toolbox could be of significant value to the industry to help map out that journey.

Dorothy Burke
facilitates Decom North Sea’s projects and initiatives, bringing together operators, major contractors and the supply chain to collaborate on a range of decommissioning topics.

Her previous experience covers technology, innovation, and facilitation roles/contracts with oil and gas technology facilitation organisation ITF, the Energy Knowledge Transfer Network, the Innovation Relay Centre, and Connect.

Decom North Sea (DNS) is the industry body that facilitates this in the North Sea. Since its inception in 2010, DNS has grown to have more than 230 members, including operators, contractors, service specialists, and technology developers. The group’s aim is to bring people from across the industry together to discuss opportunities and learn from one another.