UK-based Well-Safe Solutions has set up five different plug and abandonment clubs to reduce the cost of well P&A, following interest in the approach by operators in the North Sea.
Well-Safe said last Friday that the P&A club concept introduced a new commercial model that tackles costly and complex late-life activity.
By becoming a member of the P&A club and adding their well stock into the club, operators can spread the risk and cost of plugging and abandoning wells with others in the club and use economies of scale to safely remove hundreds of wells rather than focusing on individual wells, or a smaller number of wells.
According to the company, the club approach was designed to reduce costs by 35% or more by leveraging campaign-based savings, not only for small well counts but also by spreading spend.
It offers flexibility to phase abandonment expenditure through the club’s program of work to maximize knowledge capture and management from a multi-operator well campaign approach.
Well-Safe set up five clubs focusing on the onshore wells using a land rig and offshore wells using jack-ups, semi-submersibles, well intervention vessel, and a deep water asset.
Having the five different clubs, designed around the asset types, gives Well-Safe the ability to deliver P&A operations on all well types.
Well-Safe founder and executive director, Mark Patterson, said: “Using the P&A club model, whereby multiple operators will subscribe to the club and their well inventory will be pooled, the P&A operations will be delivered through a campaign-based approach. This means that operators will have cost certainty because we will be able to agree on a fixed target cost per well. If the well P&A work comes in under budget, then the savings will be redistributed among members of the club and various suppliers and contractors.”
“Decommissioning is often seen as the end of the road, but it’s just a part of the on-going lifecycle, and by reducing liabilities and direct costs when shutting down uneconomic wells, there is more money to invest in exploiting other fields,” said Well-Safe.
Under long-term multi-year contracts, subscribers to the club will be guaranteed long-term fixed rates over a 10 to 15-year period, the well engineering team and project management and shared knowledge management.