Well plug and abandonment (P&A) activity represents 45% of the estimated total decommissioning costs with around £750 million per year being spent on decommissioning of wells on fields that have ceased production in the UKCS. The task at hand is sizeable; there are approximately 3,650 development wells to be plugged and abandoned along with many partially suspended or partially abandoned wells that require final abandonment. As with the majority of decommissioning activity, there is little to no return on investment for operators, so in line with government expectations, it’s in everyone’s interested to ensure P&A activity is undertaken in a cost-efficient, competent and safe manner.
The industry has challenged itself with finding and delivering a 35% reduction in the cost of decommissioning. Whilst the OGA as hailed a 7% reduction in decommissioning costs in its latest cost estimate report, the debate on whether consecutive year on year cost reduction is achievable remains at the forefront, and a subject which LR’s Director of Asset Management and Decommissioning, Steve Gilbert provides his insight on in his blog post (click here). One of the fundamentals that must be considered to achieve this continued cost saving is the use of innovation at the P&A design phase and the application of technology. It has been recognised that an historically descriptive approach to well P&A has somewhat stifled innovation.
No longer their way or the highway
There’s no rebutting that P&A activity must meet current regulations and industry guidelines, with the main objective of P&A being to mitigate unplanned escape of fluids following decommissioning of the well. However there has been underlying frustration that the requirements up to now have been too restrictive and prescriptive in nature, consequently hampering efforts to truly facilitate innovative and cost reducing approaches to well P&A activity.
As an industry, we’ve matured enough to embrace a goal setting regime and the fear surrounding misinterpretation due to the lack of prescriptive rules has been conquered through the provision of clear guidance and evidence of tangible cost savings.
The new guidelines issued by Oil & Gas UK are goal setting in nature, setting out a minimum criteria to help duty holders understand what is required of them by the regulators. Every new iteration is an enhancement, pulling on the ever-expanding experience and best practice obtained from North Sea projects. The biggest change in the latest version, which marks issue six, is a move towards a risk based approach which incorporates the evaluation of risk to people, the environment, assets and reputation. This allows for P&A design and execution to consider elements such as site-specific requirements, diverse permanent well barrier materials and design, number of barriers, depth of cement plugs and differing integrity levels, allowing for customised solutions which will help to galvanise innovation and the use of new technologies, and ultimately safely reduce the P&A costs.
LR, your well operations experts
Our robust well project management expertise coupled with our recognised independence, ensures that we focus on finding the right solution for your abandonment plans. Through our global expertise in well operations, risk management, integrity, surveying and geoengineering we provide confidence that you can deliver your P&A plans safely anywhere in the world.
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Cost-risk evaluation leads to deferred P&A.
We helped our client save cost compared with conducting a full plug and abandonment project, deferring unnecessary CAPEX for 10 or so years.
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