The panel of the Global Late Life and Decommissioning Practitioners session at this year’s SPE Offshore Europe share their thoughts on how innovation and collaboration can drive success in decommissioning
In decommissioning, as in everything, failing to plan is planning to fail. For a considerable time, the inherent challenges of shutting down and removing North Sea oil and gas infrastructure have been to some extent neglected, if not ignored. Thankfully, discussions have picked up in recent years, spurred by low oil prices and diminishing production, giving way to a concerted and visible effort to address the imminent prospect of the 100-plus platforms that require dismantling and some 1,800 wells that must be plugged during the next decade. The UK’s Oil and Gas Authority (OGA) has estimated the cost of decommissioning infrastructure on the UK Continental Shelf (UKCS) at just under GBP60 billion (US$77 billion). Yet it has also set an ambitious goal of completing this work for less than GBP39 billion (US$50 billion) – a 35% reduction. Collaborative work done now can ensure that the technology and expertise are available in time to make those cost reductions possible. This is all the more evident in the session time and floor space committed to decommissioning management and technology at the SPE Offshore Europe 2017 conference – in particular the creation of a dedicated Decommissioning Zone and technical programme. This year will see Royal Dutch Shell host a keynote panel session on the topic, together with senior representatives from CNR, Chevron, Heerema Marine Contractors, Marine Scotland and UK regulator BEIS.
The Zone itself, supported by sector body Decom North Sea, includes presentations programmed in association with the Industry Technology Facilitator (ITF), The Society for Underwater Technology and the Institute of Mechanical Engineers, as well as leading industry exhibitors such as Diaquip, Integrated DECOM, EMAS Energy and Xodus Group. Independent North Sea operator Fairfield Energy, which is in the process of decommissioning the Greater Dunlin assets, will also share details of its progress.
In particular, many of these organisations will be participating in a specific session on planning and technology for decommissioning – Decom North Sea: Global Late Life and Decommissioning Practitioners. This panel will set out the view that from approximately ten years prior to cessation of production, operators and contractors must communicate, share the lessons learned from successful operations and ensure that innovative technologies and methodologies are supported to play a key role in the late life and decommissioning sector. ITF will also be running an interactive “Tech Talk” showcasing the challenges and technological solutions now at operators’ disposal. ITF’s session, ‘Well Abandonment Technology Solutions to Increase Efficiencies’, will take place on Tuesday, September 5 at 2.30 pm in the Decom Theatre, and will provide insight on the uptake and impact of technology developments in the industry so far through presentations from some of ITF’s developers.
InnovOil spoke with several key presenters from this session to hear their thoughts on how this process could be facilitated and how new technologies could help realise those necessary cost reductions.
Curbing costs Certainly, cost is and always will be the driving force behind the industry’s strategy for decommissioning. In other areas of oil and gas, technology has traditionally been able to handle much of the heavy lifting in this regard, with advances usually paying for themselves in the form of enhanced production and greater efficiencies. Decommissioning does not, on the surface at least, offer the same rewards – but innovation must be embraced. Caroline Laurenson, Decommissioning Technical Authority at Xodus Group, noted: “At the moment, technology is not the driving force, but it inherently needs to be driving if we are to see a step change in the decommissioning costs.”
However, in order to do that, as ITF technology manager Ben Foreman explained, “New technologies must be able to demonstrate efficiencies in operations, timing and budget.” In areas which have always been plagued by high costs, like plug and abandonment (P&A), there now seems to be a consensus that these reductions can only be achieved with serious collaborative effort. Foreman continued: “Well decommissioning in particular has traditionally been done as reverse engineering. Though it is possible, there are potentially costly and complex obstacles in this process, so new technology is vital to fill these gaps. Operators are now realising that the technical challenges associated with P&A and decommissioning need to be addressed quickly to ensure it can be carried out safely and cost-efficiently. Though this type of work is not considered by many to be financially attractive, it is now a necessity to curtail the consequences of unprofitable assets and wells.”
In DNV GL - Oil & Gas, senior VP and UK regional manager Hari Vamadevan’s point of view is that the industry is responding to that necessity. Across three joint industry projects (JIPs) the society is involved in, Vamadevan has seen a desire to participate, and not just from technology providers or major operators. “I believe that there is a proactive approach across the supply chain to deliver. I think that the industry is looking at delivering solutions in efficiency throughout the lifecycle of a project and that most certainly includes the decommissioning phase. We only need to look at the first two heavy lifts removals by the massive Pioneering Spirt, where the topside was removed in a single process, to understand that what would have been a lengthy process ten years ago is now achievable safely and efficiently.”
Laurenson too pointed to the Design for Decom joint industry project – in which Xodus is a participant along with 12 other organisations – which has identified some key collaborative potential with other projects such as the Ardent project – investigating the removal of subsea pipeline bundles – and Xodus’ own project examining the removal of skirted structures from the seabed.
Thinking collectively That is not to say that technology is the only method of cost reduction. Better collaboration and a greater sharing of data and project methodologies can also help to create a much more efficient schedule for service providers and the supply chain. Vamadevan explained: “One of the biggest challenges today is the issue of timing. As decommissioning continues to be deferred on large projects, there is no clear timeline as to when operations will reach the end of their natural and prolonged lives. There is a temptation, therefore, to defer investment in new decommissioning equipment and technologies.” More transparency on this front, and perhaps more decisive action from asset owners, will ensure the resources are in place when the time comes.
“The scale of the work to be undertaken is vast,” added Laurenson. “And much can still be done to understand the scope requirements on a collective scale to then optimise how the projects are executed.”
Yet a collective approach to scheduling must be balanced with the inherent uniqueness of each asset; as with bringing new fields online, there are few instances where a ‘one-size-fits-all’ approach can be adopted. The solution in this case is ensuring the right expertise is on hand to examine the costs involved in each operation. ITF’s Foreman noted: “A number of platforms and infrastructure were not designed with decommissioning in mind, which adds complexity. The lower oil price has also meant that income from production does not meet the opex for a field which has sped up the ‘cease in production’ process. Once infrastructure has ceased production, the decommissioning process can begin and operators look at the removal of the asset and the costs associated with it.” Operators who have succeeded in undertaking decommissioning work so far, he says, have been successful because they are constantly improving their work processes.
Transparency and promotion of these challenges is also vital. According to Laurenson, “There needs to be more visibility of the technical challenges being faced by the industry. Operators need to engage the supply chain to look for cost-effective solutions together and realise the opportunities that technology can bring when the problem is faced and the right minds are involved.”
That includes promoting the search outside oil and gas. Both Foreman and Laurenson drew attention to the necessity of technology transfer from industries such as the nuclear, aerospace, automotive and medical sectors; ITF in particular is working hard to support that process within its membership.
Testing the waters Other barriers may be structural and/or behavioural. The ‘race to be second’ is a well-documented problem for technology developers, and decommissioning is no exception. It can therefore be difficult to encourage asset owners to take perceived ’risks’ with their strategy and adopt new technology when existing methods – even if they are costly or inefficient – are at least known.
Laurenson elaborated on this: “There is a dichotomy where operators will say that they are embracing innovation, but when it comes to executing the work they may prefer to stick with tried and tested methods and ‘off the shelf’ equipment. There may be barriers to technology uptake, for instance, if the contracting strategy does not adequately address the risk/reward profile and how it is partitioned between the operator and contractor.”
That hesitance has a knock-on effect for technology developers, especially if it denies them opportunities to qualify equipment. “There is a further barrier to investment in technology development due to limited financial capital at an individual operator level to invest in research, testing and field trials – especially when that investment may only be applicable to just one asset or a small portfolio,” she added.
That is not to say solutions do not exist. Foreman was positive about the contribution organisations such as ITF could make to innovators in search of backing and industry co-operation: “The problem lies within the development process, as it can be difficult for developers to secure opportunities to field-test their technology, which means that they never make it to commercialisation. Though the industry is understandably reticent about investment in R&D in the current climate, our members understand the need for new technology. There is also willingness within the operator and regulator community to adopt new technology strategies,” he said.
“It is vitally important that any technology facilitator can justify the business case to operators and regulators in order to validate the risks and the development benefits,” he continues. By working with both operators and developers, ITF offers one route for qualifying these technologies – hopefully meaning it can enter into effective commercial more quickly.
Recent ITF request for proposals (RFPs) on well plugging and abandonment (P&A) have included new, enhanced or alternative technologies to cement plugs, improving through tubing logging to verify the quality of hydraulic seals behind tubing and casing and identifying safer, faster and cheaper methods to remove tubing and casing during P&A operations. It will launch another later this year with a broad focus on decommissioning technologies. DNV GL, meanwhile, is a partner in Integrated Decom, a collaboration of companies offering a total, single-source solution which handles front-end planning and preparation for decommissioning and the delivery of an approved decommissioning programme with documentation required by the Regulator. Alongside three partner companies – Costain, Axis Well Technologies and BMT Cordah – this enables operators to take a holistic approach to the problem. DNV GL’s presentation during the Decommissioning Zone will discuss the kinds of cost and efficiency savings that can be achieved through a single-source consortium.
With a decade’s worth of work to do, the sheer size of the North Sea’s decommissioning is still staggering. But by embracing technology and collaboration, the challenge is far from insurmountable. Events such as SPE Offshore Europe should also demonstrate that technology developers, service providers and operators are up to the task – and that the industry can no longer be accused of failing to plan.
The session ‘Decom North Sea: Global Late Life and Decommissioning Practitioners’ will take place at SPE Offshore Europe 2017 on Thursday September 7, 10.00am-12:00am in the Decom Theatre.
ITF’s session at Offshore Europe, ‘Well Abandonment Technology Solutions to Increase Efficiencies and Reduce Costs’ takes place on Tuesday, September 5, 2.30pm – 4.30pm in the Decom Theatre, followed by a free decommissioning Tech Talk, held at the Chester Hotel, Aberdeen from 6.00pm.