Operators can help reduce P&A costs by co-operating more with suppliers (Image credit: exdez)

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By keeping suppliers up to date on any upcoming P&A plans, operators can help their partners to keep costs down, Carlo Procaccini, head of technology at the Oil and Gas Authority (OGA), told DecomWorld.

These things are being discussed, but we need to accelerate,” he said.

Procaccini’s comments came as trade body Oil & Gas UK forecast decommissioning expenditure of £16.9 billion ($25.6 billion) in British waters over the next decade, with activity to peak in 2022. Plugging and abandonment is expected to account for 46% of that expenditure, with 1,200 wells (30% of those currently active) to be abandoned in that period.

The OGA has set a target of reducing the costs of decommissioning on the UK Continental Shelf by as much as 35% over the remaining productive life of the basin.

But a would-be supplier of a new type of vessel that it says would cut $1.5 million off the P&A costs of a single well has expressed frustration at operators’ unwillingness to commit to new techniques.

“Despite all the talk you hear of the need for new technology, there is still a huge penchant to do things traditionally,” John Davies, Managing Director of Celtic Design Consultants (CDC), told DecomWorld. “Everybody sings the praises of our vessel but nobody’s prepared to put pen to paper.”

Forecast of total decommissioning expenditure over the next decade, by component (Source: Oil & Gas UK)

Four keys

Procaccini outlined four distinct areas in which innovation was needed, beginning with an understanding of the conditions of the well to be plugged and abandoned.

“If we can assess that the primary cementing is still okay, then a much lighter intervention is needed. The first set of new technologies should deliver an efficient and effective diagnostic of the well’s current condition. Remember, wells were drilled and constructed around 30 years ago and we’re abandoning them today. We can’t rely on the original drawings,” he said.

A second group of technologies should target efficient and secure access to the well and removal of any equipment that might obstruct the P&A job.

“This technology would mean you don’t necessarily need an expensive rig every time you want to abandon a well… The barriers don’t have to be as big and as cumbersome and as expensive as the safety barriers employed during the drilling, because the well is almost dead. Of course there is the brute force way of sending in a rig and killing everything, but that is expensive,” Procaccini said.

Then there is the need for long-lasting plugs that are also easy to deploy. Portland cement is inexpensive, but the industry must look at materials with more durability, and that are more compatible with things found in wells – such as left-over tubing or the by-products of corrosion, Procaccini explained.

“Thirty years on you could be looking at a condition in the well that is far more diverse than when you did the primary casing job. We’re still looking for what you might call the ideal plug.”

Finally, there is the job of monitoring the results, given that the North Sea is only now being exposed to the prospect of plugging and abandoning on an industrial scale.

“Up to now the experience has been limited to few and sporadic P&As. Industry is taking its first steps, but it has shown willingness to share issues and problems and lessons learned. And they’re getting together to do something for the industry as a whole,” he said.

Sharing goals

For the industry to achieve the desired levels of innovation, Procaccini and Davies both agreed that operators must be more transparent toward suppliers.

“Right now we have a problem in a lack of clarity about schedule. It prevents the supply chain from building capacity,” Procaccini said. “The supply chain will not take the first step unless operators give them confidence about what’s in the pipeline [in terms of planning], and commit to that.

“Operators should also be collaborating with the supply chain when technology needs to be piloted, because the investment is too big for the supply chain alone to absorb it. It is happening in some instances. This will benefit the whole sector, and can be deployed globally.”

CDC has developed its own design for a self-propelled multi-purpose jack-up vessel with a new jacking and rack chock system. At current rig rates, Davies said, the Heron would save operators $60,000 per well, per day, on vessel charter costs alone. In early 2015, when rig rates were higher, the estimated saving was $100,000/d, translating into a $2.5 million saving for a typical 25-day P&A job.

The Heron’s development came to a halt in 2008 when the financial crisis scuttled the financing plan. Now that investors are again showing interest, Davies said it would take a letter of intent from an oil producer to release the funds to get the Heron built. A golden opportunity arose in 2014 when CDC was invited to bid, in partnership with a large integrated services company, for a multi-year well P&A contract in the North Sea for a major oil company. A decision was expected in the first half of 2015, but then the oil price crashed and the campaign was postponed to 2017.

“We could have been building the Heron right now,” Davies said.

“Despite all the talk you hear of the need for new technology there is still a huge penchant to do things traditionally. We have designed a vessel that literally saves hundreds of thousands of dollars, and that’s just on vessel charter alone. But they still have this blinkered view that they need a drilling jack-up to do these operations, when it’s cheaper to do rigless operations.”

 By Rod Sweet