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oil & gas

A cost and plan for decommissioning over 220 offshore assets.

Decommissioning cost liability estimation and methodology on an asset-by-asset basis

Key facts

  • 01.



  • 02.


    Offshore installations

  • 03.


    Southern North Sea, UK

Client challenge

We were asked by our client to estimate its decommissioning cost liability for over 220 non-operated offshore assets and components in the Southern North Sea. The assets varied significantly in complexity and type, with different platform, subsea and well infrastructures.

As well as determining the scale of the work ahead, our client required a feasible methodology for the decommissioning activities per asset. Sourcing up-to-date asset and infrastructure information would be key.

How we helped

The scale of decommissioning was significant, with over 30 platforms, 160 wells (both platform and subsea) and 32 infield and export pipelines within the scope. We needed to give due consideration of our client’s cessation of production (CoP) date and the resulting implications of decommissioning key production hubs.

Historical decommissioning project cost data for the region showed that the final versus the initial cost estimations varied significantly. Clearly, understanding the shortcomings of cost estimates for previous projects was essential in determining a robust estimate, even at this early stage in the decommissioning planning.

  • We quickly determined the focus areas for an appropriate decommissioning work breakdown structure (WBS).
  • We made use of public domain and in-house data, as well as significant knowledge of the region, to inform the estimates.
  • We identified the elements that were the greatest contributors to decommissioning costs so our estimating work was appropriately targeted. We spent significant time creating a feasible decommissioning methodology and sequence, providing the basis for constructing bottom-up cost estimates for topsides, jacket and pipelines removal activities.
  • We carried out a benchmarking against industry norms to give our client further assurance of the validity of the estimates.

All of these tasks were completed in a short timeframe.

Business benefits

Our detailed technical report provided our client with a concise, asset-by-asset decommissioning datasheet covering:

  • key asset infrastructure

  • viable decommissioning methodology

  • class five cost estimate, with spend profile.

Our support included a thorough client handover. This session clarified the study’s assumptions, provided greater awareness of the risks and offered opportunities to combine decommissioning efforts for significant cost savings.

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