Decommissioning is here and now

Offshore Energy Exhibition and Conference (OEEC) 2015 wrapped up its second day with a technical session about decommissioning. The session was packed with visitors looking to find out the latest decommissioning figures and recent experiences in decommissioning projects.

The session was moderated by Eric van Ewijk, Asset Manager with EBN BV and featured the following speakers: Peter Valkenier, Engineering and Construction Manager at Wintershall, Simon Axon, Decommissioning Consultant at Centrica Energy E&P, Aart Geurtsen, Project Coordinator at GDF SUEZ E&P Nederland B.V., and Paul Yeats, General Manager at Eastern Hemisphere, Deepwater Technical Solutions, Oceaneering International Services LTD.

The decommissioning of offshore installations represents both a cost burden, to operators, and a potential job and profit machine to contractors and service providers.

However, the reality is that it has to be done. As Eric van Ewijk said: “Decommissioning projects have to be done, there is no way around it.”

Work as colleagues, not competitors.

Van Ewijk emphasized the need for collaboration in decommissioning projects and said that all those involved in the process need to act as colleagues, not competitors. In addition, he said that collaboration could be effective only when all stakeholders are committed.

Delay

Valkenier from Wintershall presented to the audience decommissioning from the perspective of the operator.

According to Valkenier, the best way to deal with decommissioning is to delay it as long as possible.

In addition, he said that there was a threat that regulations will become more adverse and drive up cost.

Objectives of effective decommissioning

ENGIE’s Aart Geurtsen said that objectives of effective decommissioning strategy are to achieve maximum economic value from a platform, or group of platforms; to ensure that key assets are not decommissioned prematurely; and to ensure that decommissioning is executed in a safe, environmentally sound and cost-effective manner.

Decommissioning decisions are taken on a case-by-case basis.

Geurtsen claimed that taking the decommissioning decision is complex due to many variables and uncertainties. In addition, decommissioning needs to be anticipated well in advance, and it requires the same focus as the rest of the lifecycle.

“Decommissioning decisions are taken on a case-by-case basis,” Geurtsen said. He also said that costs of the decommissioning project depend on the number of wells and that 40 -50% of the costs of decommissioning can go to plugging and abandoning of wells.

In conclusion, Geurtsen said that in order to maximize the remaining value from remaining assets, the companies need to plan ahead, manage late-life assets differently than regular assets, ensure that no value is left behind, get the timing of decommissioning right, plan for cost-efficient decommissioning and execute according to plan i.e. on time and on budget.

Soon is not soon enough.

 

Simon Axon, Decommissioning Consultant at Centrica Energy E&P, advised to choose the consultants carefully and not to begrudge the service providers making profit. “There needs to be trust between operators and services providers,” he said.

Axon stressed the importance of being prepared for decommissioning during the installation. “Soon is not soon enough,” Axon reiterated.

Paul Yeats from Oceaneering said that the most important thing is driving efficiencies in decommissioning.

According to Yeats, decommissioning is here and now.

Offshore Energy Today Staff

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