Senior Petroleum Engineer
As a growing number of North Sea oil and gas field facilities approach the end of their production lives, late life asset management is crucial to ensure their continued safe and profitable operation.
In a low oil price, high-operating cost environment like the North Sea, late life management is fundamental to maximising the economic potential of the region.
Although decommissioning represents a massive challenge - particularly for operators - it also presents an opportunity for energy service companies to expand their offering, by providing an option for operators to outsource late-life management to an expert team who have developed the safest and most cost-effective ways to lead an asset towards cessation of production (CoP).
In fact, decommissioning and late-life asset management presents one of the few guaranteed industrial growth sectors in the region and is a significant business opportunity for energy services companies. Now is the time to build up the very specific kind of expertise and experience that is required, as it will continue to be in demand for many years to come.
Late-life project management is an area in which Lloyd's Register is proud to have developed its expertise and experience. With our understanding of the full subsurface and production management requirements, as well as our other integrated services, such as wells and facilities management, we have access to all the skills required in the process of managing mature fields, up to and including CoP.
Towards the end of an asset's production life, there may well still be opportunities available in the field, but these are simply not economically feasible to execute. An operator's expensive technical and scientific equipment, as well as essential staff, may be put to better use elsewhere. Many of the geoscientific and reservoir engineering tasks become less important or are simply not required. Production optimisation and operational efficiency becomes crucial as the sole aim becomes extracting every last barrel from the asset, extending the life of the field as long as possible until CoP.
However, many operators with assets heading towards late-life are still applying historic operating models and resourcing as if the fields were still operating at peak capacity. They haven't reduced staffing levels or adjusted inspection and maintenance regimes in line with the decline in operation.
This is a common challenge in managing late-life asset operations, and Lloyd's Register helps operators adjust their resources accordingly. Outsourcing the running of late life assets to a team with specialist skills saves money, streamlines processes and allows a smooth transition from production phase to CoP phase.
As an example of our work in this field, we took over the reservoir and production management of two subsea Central North Sea fields for a client, ensuring a smooth transition and significantly reducing costs for the operator, as well as allowing the redeployment of their essential staff to more valuable and strategic assets, without detracting from operator responsibilities to the late-life field.
Our staff spent time in the client's office to gain familiarity with the operator's way of working and getting to know the in-situ operations team. During this time we also agreed the key activities - governance structure, accountabilities, reporting interfaces, timelines, deliverables and IT requirements.
Our thorough approach and close co-operation allowed the transition stage to be completed successfully and quickly, and the full technical and operational management of the two fields are now run by our outsourced pre-CoP team from our office in Aberdeen. More information about the processes involved in this project can be found here .
Late-life assets need to achieve a drastic reduction in costs to remain profitable. It is vital to eliminate activities that do not deliver cash or ensure safety. A streamlined, outsourced approach aims to deliver the following:
Zero accidents and no harm to the environment
Stay cashflow positive in the current price environment
Achieve a competitive unit operating cost
Extend field life where possible, deferring CoP
Minimise decommissioning costs
Outsourcing to a pre-CoP team with specialist skills in the delivery of this service is a bold step for an operator to take but it is effective. The cost-effective deployment of specialist 'end of field life' services will continue to be crucial to the North Sea region and Lloyd's Register is proud to play its part.
Who we work with
We help businesses across dozens of sectors push forward and achieve like never before. How can we help you?
Emergency Response readiness avoids drilling delay
Case study: LR Emergency Response assessment ensures client avoids costly drilling delay during rig intake.
What we think
LR's experts regularly share their research and insights.