Planning and Estimating Costs for Field Decommissioning in Brazil
Decommissioning and abandonment of Brazilian offshore oil and gas fields has become more important in the last few years because of the maturing hydrocarbon-producing basins in the region. However, a complete abandonment of a Brazilian offshore field has not been completed to date and the consequent lack of a reference case leads to uncertainties with operators and stakeholders during the conceptual phases of abandonment. This paper aims to develop a Brazilian baseline for front-end planning and cost estimation of the decommissioning, removal, and disposal options.
Brazilian Decommissioning Context
Decommissioning and abandonment of offshore facilities and infrastructure in Brazil is relatively immature compared with other more-mature global oil and gas operating regions. To date, only six fixed platforms and five floating production units have been decommissioned in Brazil. However, Brazil’s National Agency of Petroleum, Natural Gas, and Biofuels (ANP) has identified a track record for well plugging and abandonment, with 597 production wells and 121 injection wells currently recorded as being fully plugged and abandoned.
Because of this immaturity, Brazilian legislation is currently in a development process to include decommissioning and abandonment in relevant documentation. However, identifying all the regulations that apply to the decommissioning activities and the respective legibility of the potential decommissioning options is often a complex task.
Moreover, many stakeholders are involved and affected by decommissioning and abandonment projects and their interests are different and sometimes opposing.
Also, the availability of the national Brazilian supply chain to support the requirements of decommissioning is a key factor in achieving a safe and sustainable solution at the lowest possible cost. Decommissioning of offshore facilities is often only executed right at the point of cessation of production, neglecting the early planning phases where a significant amount of money could be saved by end-of-field-life planning before decommissioning. However, this front-end planning for decommissioning and abandonment requires a robust methodology, a reasonable cost estimate with a suitable level of accuracy, and an integrated approach considering all stakeholders, taking into account decommissioning experiences in other more mature global oil and gas operating regions.
This study is based on a consistent and accepted methodology that has been developed and applied in North Sea decommissioning projects. The baseline objective of this paper is to take the first steps in the development of a definitive methodology for planning and cost estimation of decommissioning, aligned with the Brazilian context and necessities.
The baseline for planning and cost estimation of Brazilian decommissioning is based on three main aspects: regulation base requirements, stakeholders’ expectations, and supply-chain benchmarking.
Regulations Analyses. Regulations analysis evaluates if the decommissioning option is allowable under Brazilian law and whether there are any restrictions or limitations.
For this objective, the study identifies which regulations and conventions could affect directly or indirectly decommissioning activities in Brazil. Consequently, each base-case requirement is classified and evaluated.
Stakeholders Analysis. Stakeholder analysis identifies the main Brazilian stakeholders, establishing a prioritization and evaluating their expectation about the decommissioning options. The first step of the analysis is the identification of sectors of interest and subcategories of the stakeholders. The study considers the following sectors of interests: government authorities, industry interest groups, nongovernmental organization (NGO) interest groups, scientific and technical organizations, the general public, internal stakeholders, media, political aspects, and supply chain. A stakeholder mapping tool has been used to establish and prioritize stakeholders. This tool shows the level that each stakeholder could be affected by the decision with the level of influence that each stakeholder could exercise on the outcome of the project (Fig. 1).
The level of interest that the stakeholder has on the project is estimated from the analysis of the respective mission and assignments, and the level of influence on the outcome/decision of the project is evaluated based on scoring criteria.
Scoring criteria are used to classify the expectation that the stakeholder has on each decommissioning option. The evaluation is based on the stakeholder’s reports, public presentations, interviews, press releases, media, national reference cases, and global reference cases.
Benchmarking Analysis. The main objective of the benchmarking analysis is to evaluate the capability of the Brazilian industry to support the potential decommissioning demand. The analysis is based on three main aspects: the availability of the critical element of the supply chain to develop the selected activity; the existence or absence of a national reference case for the selected activity; and the Brazilian cost efficiency regarding the execution of the selected activity when compared with other locations (i.e., Gulf of Mexico, North Sea, and Southeast Asia).
Data and Results
Regulations Analyses. Extensive research is developed on a large number of regulations, legislations, guidelines, and conventions that must be considered in decommissioning and abandonment of Brazilian fields.
ANP resolutions appear to be the most comprehensive regarding decommissioning and abandonment. The corresponding resolutions detail the general requirements for decommissioning along with the relevant applications and reports that the operator should submit for approval. The limitations for partial removal and leave-in-place options for platforms and infrastructures are detailed in the regulations in addition to well-plugging-and-abandonment methodology. On the other hand, an overlap of responsibilities regarding the approval process exists. The resolution highlights that the ANP as well as the Brazilian Institute of the Environment and Renewable Natural Resources (IBAMA) and the Brazilian Navy should equally approve the decommissioning project.
IBAMA focuses particularly on the environmental adequacy of the selected option, while the Brazilian Navy focuses on the aspect of the decommissioning project related to the safety of the offshore activities, the prevention of water pollution, and the preservation of human life at sea.
Stakeholders. A total of 121 stakeholders have been identified. Fig. 1 shows the interest vs. influence diagram for the identified stakeholders.
The first quadrant (upper right) represents the stakeholders with the highest value of interest and influence. The group contains (from most to least influential) partner operators, executive agencies, national government departments, and decommissioning contractors. The recommended approach for these stakeholders is the highest level of involvement and opportunity for influence in the project decision.
The second quadrant (bottom right) represents the stakeholders with the highest value of interest but with a low value of influence. The group contains (from most to least influential) consultants, trade unions, enterprise agencies, environmental NGOs, production staff and platforms crew members, local communities, decommissioning team, fishermen’s organizations, business associations, community interests groups. The recommendation for these stakeholders is an involved method of engagement through dialogue and collaboration.
The third quadrant (upper left) represents the stakeholders with a high value of influence but a low value of interest in the project. The group contains (from most to least influential) national political members and senior representatives. The most appropriate approach for these stakeholders may be consultation, asking opinions about the reaction of particular decisions, and market research.
The fourth quadrant (bottom left) represents the stakeholders with the lowest value of interest and influence. The group contains (from most to least influential) local authorities, national media, international bodies, local radio and newspapers, foreign countries, decommissioning interest groups, navigation organizations, universities and academics, the Brazilian public, research organizations, Mercosur members, and energy groups. The recommended approach for these stakeholders is based on informational or educational methods of providing information and explaining awareness of something, often to change attitudes or action but only through one-way communication.
Benchmarking. It appears from analysis that the Brazilian national supply chain is able to cover 100% of the scope of operator project management, facility running, well plugging and abandonment, facilities and pipelines making-safe projects, and topside preparation. For topside and substructure removal of fixed platforms, the national supply chain would be able only partially to cover the scope of the work because heavy-lift vessels and crane vessels with lifting capacity of more than 600 t must be mobilized from other global oil and gas operating regions. The national supply chain also could partially cover the scope of subsea and pipeline decommissioning. For the decommissioning of flexible lines, a range of national vessels or foreign vessels currently operating in Brazil is available. However, for decommissioning of rigid lines, the mobilization of vessels from other global oil and gas operating regions is required because of a lack of the necessary vessels currently operating in Brazil.
Cost benchmarking analysis shows that project management, facilities running, and well plugging and abandonment are competitive if compared with other locations around the world. The cost of removing fixed platforms compares favorably with that in other global oil and gas operating regions but only for small platforms in a water depth of less than 80 m. The removal of medium and large fixed platforms is affected greatly by the high cost of the mobilization of heavy-lift vessels and crane vessels for operating in Brazil. However, the removal of floating platforms does not require such a critical marine resource and could be covered effectively by the national supply chain.
The proposed baseline for planning and cost estimation of Brazilian decommissioning was realized through analysis of the national and international regulations applicable to decommissioning, the expectation of stakeholders, and national supply chain benchmarking.
Analysis of the regulations showed an extensive range of possible decommissioning options that are explicitly allowed.
Further, the analysis pointed out a series of stakeholders with a high level of influence or interest in the project and the outcome.
Finally, the national supply chain benchmarking analysis showed significant capabilities of the national supply chain to support the potential demand for the project management, facilities running, and facility and pipeline make-safe components of a decommissioning project.
The baseline proposed in this paper aims to be the first step in the development of a consistent methodology for planning and cost estimation of decommissioning in Brazilian offshore abandonment projects. The next step in the development of the methodology would be to deal with a real case, setting up a plan and identifying the magnitude of the potential cost-saving opportunities.
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08 October 2020
09 October 2020
09 October 2020