Page 6 - EurOil Week 47

EurOil COMMENTARY EurOil
the next big step; where we lead, others will follow.”
According to Newcombe, one of the most sig- nificant cost reductions has been in the area of well plugging and abandonment (P&A), with the industry bringing down its cost by 18%. OGUK estimates that P&A now accounts for 45% of overall decommissioning costs.
Rising activity
While OGUK expects that the annual costs of decommissioning in the North Sea will be steady, activity is on the rise, the Offshore Decommissioning Conference heard. The Off- shore Petroleum Regulator for Environment and Decommissioning’s (OPRED) director of decommissioning, Pauline Innes, said that 23 decommissioning approvals had been granted so far this year. This compares with just nine approvals for the whole of 2018, eight in 2017 and five in 2016.
Innes noted that not all of the projects were large – such as topsides or field-wide schemes – but nonetheless the number of approvals indicated increasing activity. She added: “2019 also stands out as a year we are having serious discussions around opportuni- ties to utilise infrastructure for a wide range of alternative uses.” These include aquacul- ture, accommodation for offshore windfarm construction workers and carbon capture and storage (CCS).
Innes added that Royal Dutch Shell’s plan to leave the Brent platform’s legs in the North Sea would be a litmus test for gauging industry and public opinion on different decommissioning options.
The UK government intends to allow Shell to leave the legs offshore, but the plan has encoun- tered opposition from Germany, which has expressed concern over the contents of the struc- tures’ storage cells.
Discussions with Germany and others are ongoing. “The decisions we make in the UK are
being scrutinised beyond our borders and that will continue,” Innes said.
What next?
The UK still has a long way to go, however. OGUK’s decommissioning manager, Joe Leask, told the conference that alongside the 9% of platforms that have been removed, only 15% of UKCS development wells – or 659 out of 4,032 – had been decommissioned to date. Additionally, only 7% of pipelines – or 1,700km out of 25,400km – have been decommissioned.
There are over 400 fields where decommis- sioning activity will be required at some point, along with 320 platforms to be removed or repurposed. This equates to 2mn tonnes of top- sides and 1mn tonnes of jacket materials.
Newcombe said that over the next five
years, around 70 fields are anticipated to apply
for cessation of production. Leask added that
around 12 topside removals per year were
expected to take place between now and 2025, One of the most with more of these taking place in the south-
ern North Sea than in the northern portion. In addition, around 1,630 wells are forecast to require P&A over the next 10 years. This is an increase on the previous estimate of 1,465, made a year ago.
Newcombe suggested that new approaches area of well
might be needed as more infrastructure comes up for decommissioning. “Get tactical,” he told conference delegates. “Why not have one con- tractor, or a group, decommission a whole basin? Campaigning at scale is what we need to do, [and] look at technologies and integrate them, and be more transformational.”
OGUK said in its report that meeting the local challenge in the North Sea would give the industry the skills and expertise necessary to address similar challenges globally. And with the global decommissioning market estimated to be worth GBP67bn ($85bn) there are considerable challenges to be overcome.™
plugging and abandonment.
significant cost reductions has been in the
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w w w . N E W S B A S E . c o m Week 47 28•November•2019