Two Maersk subsidiaries are to create an integrated decommissioning business with which they plan to provide end-to-end decom services
Some 350 fields are slated for decommissioning across the UK, Norwegian, Danish and Dutch portions of the North Sea between now and 2025, with estimated costs exceeding US$50 billion. Globally, the scope of work could amount to as many as 700 fields. The scale of work and expenditure remains daunting, but operators and supply chain companies are seemingly showing an increased willingness to grasp the nettle.
In the UK, the emergence of new service providers such as Well-Safe – which undertakes well plugging and abandonment (P&A) operations – and Integrated DECOM – a four-strong consortium formed of Axis Well Technology, BMT Cordah, DNV GL and Costain – also suggests businesses are looking to form more innovative corporate structures to get a slice of the market. Now, the latest offering comes from two units of Denmark’s Maersk Group.
Maersk Drilling and Maersk Supply Service announced the creation of a 50:50 joint venture (JV) which will provide decommissioning services. Drawing on assets and technical capabilities from both businesses, the JV will enter the market offering bundled solutions for up to 80% of the process required in decommissioning an oilfield, the companies said.
This will cover well P&A, the towage of floating assets and the removal of subsea infrastructure, the companies said, as well as overall project management.
“With the growing need for decommissioning mature fields, governments and oil and gas operators are looking for experienced partners to manage and perform this challenging task. By leveraging the strong track record of the two companies, as well as our complementary asset base and competencies, we can lower the risk and reduce the overall cost for the customers,” Maersk Drilling CEO Jørn Madsen said in a statement.
In future, Maersk says the JV intends to provide services covering the full end-to-end decommissioning process. Each of the units will invest approximately US$10 million in the JV over the next year, which will cover the first years of operations. Having established the business, their plan is to take on up to three new projects per year post-2020. Each will also provide assets to the venture under “standard commercial conditions,” they said.
The new venture will be headquartered at the Maersk Drilling and Maersk Supply Service joint headquarters in Lyngby, Denmark. It will be headed by Total executive Lars Banke – current project and site manager for the Ailsa FSO, as part of the Culzean development – who will join as CEO in June 2018.
Both Maersk units have already completed decommissioning projects for various clients. Maersk Supply Service has been project managing and executing full-scope decommissioning services for the Janice, James and Leadon subsea fields in the UK North Sea since 2016 for operator Total, which took over the field from Maersk Oil. Maersk Drilling also completed P&A jobs at the James and Leadon wells.