Decommissioning and Abandonment
So you don’t want to do decommissioning; just get over it. Decommissioning is a part of the life cycle of any oil and gas asset. Publicly traded firms account for these future liabilities on their books through the requirements of Financial Accounting Standard 143 from the Financial Accounting Standards Board and International Accounting Standard 37 from the International Accounting Standards Board. These costs have been considered and accounted for in the development economics for every project. Delaying decommissioning through life extensions or divestiture is laudable; but, ultimately, decommissioning will need to occur.
As discussed last year, early planning for decommissioning, along with an integrated late-life/decommissioning strategy, can deliver value. The supply chain is now actively working to develop low-cost solutions and is gaining valuable experience through recent projects (as documented in many recent SPE papers). Owners need to engage the supply chain early with the relevant asset data for planning and execution of decommissioning. Don’t tell them how you want it done. Owners need enough internal expertise to be informed buyers and to select the optimal market-driven solutions offered by the supply chain. Owners then must step back and let the supply chain deliver.
Another value opportunity lost appears to be decommissioning during the down cycle. Minimum costs and maximum supply-chain engagement occur during the periodic down cycles; plan to take advantage of these guaranteed cost-saving opportunities. Decommissioning—just get on with it, using the right integrated late-life/decommissioning strategy delivered during a down cycle.
This Month's Technical Papers
Recommended Additional Reading
IPTC 18982 Net-Environmental-Benefit-Analysis Application for Jacket-Decommissioning Techniques by J. Kanmkamnerd, PTTEP, et al.
OTC 27672 Baseline for Planning and Cost Estimation of Brazilian Decommissioning by F. Mimmi, Genesis, et al.
SPE 186133 Brent Charlie Ultralate Life: Managing for Optimal Decommissioning by F. Sanwoolu, Shell, et al.
Decommissioning and Abandonment
Win Thornton, SPE, Vice President of Decommissioning, Global Projects Organization, BP
01 January 2018
Ultrasonic Log Response Evaluates Barrier Cells for Cementing Applications
This study used ultrasonic logging to evaluate reference barrier cells constructed with known defects. The cell concept was developed with an emphasis on low cost and ease of use.
Value of ROV Data Extends to Decommissioning Strategy
The complete paper describes the potential global scientific value of video and other data collected by ROVs.
New OGA Wells Strategy Focuses on Improving Economics of UKCS Oil and Gas
The strategy supports the Maximise Economic Recovery from UK Oil & Gas Strategy and Vision 2035, whose goal is to achieve £140 billion additional gross revenue from UKCS production by that time.
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12 May 2020