How is the UK oil and gas industry tackling decommissioning cost inefficiencies in the North Sea?

Posted by Andy Norman on 27-Jun-2017 10:01:32

Maiden voyage for Claxton's 'WellRaizer' modular conductor recovery system on the Norwegian Continental Shelf

The costs of decommissioning have become a serious issue for operators in the North Sea. In December 2016, Oil & Gas UK predicted that £17.6 billion will be spent on decommissioning between 2016 and 2025.

With oil prices failing to rise back to 2010 levels, it has fallen to the industry and key operators to look for streamlining solutions to protect their revenue streams. Subsequently, regulatory bodies and agencies have kicked into action to try and help the region understand the challenges that the decommissioning sector brings. This includes providing insight and advice into approaches to drive efficiency savings.

One such regulatory body, the Offshore Petroleum Regulator for Environment and Decommissioning, has already begun working alongside the UK Government to provide operators with decommissioning programme templates. The templates are designed to help operators streamline their internal processes, reducing the time spent on submitting decommissioning programmes to government, and reduce the time subsequently that government officials spend reviewing the related documents. An example of such a template can be found on the UK Government’s website here.

The regulator, which works alongside the Government’s Department for Business, Energy and Industrial Strategy and the Department of Energy & Climate Change, is headed up by Chief Executive, Wendy Kennedy. “As a regulator, we need to keep revisiting our guidance notes and our regulations and processes. As we see decommissioning programmes come through, we learn lessons from those, and we make sure to change our guidance so that it reflects good practice.”

It is this support, together with the actions from larger authorities in both the UK Oil and Gas Authority (OGA) and Oil & Gas UK, which is helping to streamline decommissioning processes and reduce costs too.

Spotlight on efficiency

Oil & Gas UK, have also recently put process and engineering efficiency, in the UK oil and gas industry, under the spotlight. Oil & Gas UK are the leading trade association for the UK offshore oil and gas industry and aim to promote and serve their member’s interests as well as being the voice of the industry.

At the latest Oil and Gas Industry Conference in Aberdeen, Oil & Gas UK spoke about “collaboration and efficiency becoming more commonplace in the mindset” – in order to help operators, find cost reductions, but also find faster solutions to their decommissioning issues.

Together with the Efficiency Task Force (ETF), which is chaired by Petrofac’s Managing Director, Walter Thain, Oil & Gas UK launched the “Efficiency Hub”. ETF was established in response to a sharp increase in cost, decreases in efficiency and a fall in production volumes on the UK Continental Shelf (UKCS). The task force aims to seek out, promote and provide access to efficient practices across the industry, without compromising on safety.

The new online portal has been created to help promote best practices to decommissioning, amongst other projects in the field, as well as raising awareness of pan-industry initiatives too.

Key initiatives

The Efficiency Hub has a multitude of tools, guides and case studies that are free to use for all stakeholders in the UK oil and gas industry. Just some of the key initiatives included in the Hub, are:

  • Simplification of Engineered Products – An expert group are developing a collaborative supply chain approach to product specifications that aims to reduce complexity and waste by reducing bespoke design and certification.
  • Subsea Application Guidelines – With input from a multi-discipline group, the Efficiency Task Force’s (ETF) subsea guidelines demonstrates that up to 25% can be removed from the cost of subsea development by adopting a simplified and fit-for-purpose approach.
  • The Oil & Gas Technology Centre (OGTC) – The Hub also includes links to the OGTC where their goal is to inspire, accelerate and fund technology and innovation that helps the oil and gas industry achieve greater efficiencies.

The results so far

The Efficiency Hub also includes an Efficiency Accumulator which gives an overview of how well the industry is performing in its mission to become leaner, smarter and better equipped to deal with the challenges ahead. Here are the latest results according to research from the ETF, alongside Oil & Gas UK:

  • There has been an OPEX reduction of 16% year-on-year since 2014
  • Overall OPEX costs have reduced from £9.8 billion in 2014, to £7 billion in 2016
  • Over 50% of all reductions are sustainable

Clearly, there is still some way to go to achieve maximum efficiencies and savings, however, the accumulator provides proof of optimism in the industry’s attempt to increase efficiency and reduce costs for operators too.

Efficiency through innovation

Efficiency has also been at the heart of Claxton’s research and development team over the past few years. A need for our clients, who include major operators in the North Sea, is to decommission safely and efficiently and this has helped shape our future products and the services we offer.

Our most recent example has been the development of a new modular conductor recovery system, called WellRaizer™.

WellRaizerTM, has been designed to recover oil and gas wells from offshore installations without the use of a jack-up rig or platform based drilling derrick, once the downhole/sub-seabed severance has taken place.

Speaking on the successful launch of WellRaizer™, Claxton’s R&D Manager Matt Marcantonio said, “With the launch of WellRaizerTM Claxton is now able to bring severance and recovery all under one roof. We believe this capability is a first of its kind for the industry and means we can offer a full solution rather than just a one-off service to our customers.”

The main design philosophy of WellRaizerTM was keeping it small and this was achieved by designing a unit with dual stage cylinders to keep the overall height down. A lot of traditional solutions organisations use are very large and not usually suited to the Southern North Sea (SNS) or UK Continental Shelf (UKCS) as the older platforms comprise much smaller deck space.

Other products and services

As well as rigless platform well abandonments, Claxton can also offer a range of other products and services to increase efficiency and reduce the cost of your decommissioning project. To see the full package of products and services available from Claxton, download our Decommissioning Buyer’s Guide today.

Download the decommissioning buyers guide

Topics: decommissioning

Your Comments...