Decommissioning oil and gas installations can cost operators an average of $4-$10 million in the shallow water Gulf of Mexico. Thus when the US Department of the Interior Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) Gulf of Mexico OCS Region issued a new decommissioning regulation in September 2010, operators knew they'd take a hit.
NTL 2010-G05 requires wells that have not been used for the last five years to be to be permanently abandoned, temporarily abandoned, or zonally isolated within 3 years after Oct. 15, 2010. If wells are zonally isolated, operators have 2 additional years to permanently or temporarily abandon the wellhead. Plus, platforms and supporting infrastructure that have been idle for five or more years must be removed within 5 years as of the Oct. 15, 2010 effective date.
This new NTL on top of the typical volume of decommissioning work in the GOM will increase demand for contractors and, in turn, their dayrates.
According to a BOEMRE statement, the MMS (former name of the BOEMRE) conducted an Alternative Internal Control Review (AICR) of idle structures and wells on active leases in the GOM OCS in 2008. The review identified a significant number of idle platforms that need to be permanently plugged and removed. Why? Idle structures and wells could be damaged in a hurricane and cause an environmental disaster. Plus, damaged platforms and wells cost more to decommission than non-damaged wells.
How is an offshore well decommissioned?
There are 10 steps to the process: Project Management, Engineering and Planning; Permitting and Regulatory Compliance; Platform Preparation; Well Plugging and Abandonment; Conductor Removal; Mobilization and Demobilization of Derrick Barges; Platform Removal; Pipeline and Power Cable Decommissioning; Materials Disposal; and Site Clearance. Each step is discussed below.
Project management, engineering and planning for decommissioning an offshore rig usually starts three years before the well runs dry. The process involves:
Due to the limited number of derrick barges, many operators contract these vessels two to three years in advance. In addition, much of the decommissioning process requires contractors who specialize in a specific part of the process. Most operators will contract out project management, cutting, civil engineering, and diving services.
Permitting and Regulatory Compliance
Obtaining permits to decommission an offshore rig can take up to three years to complete. Often, operators will contract a local consulting firm to ensure that all permits are in order prior to decommissioning. Local consulting firms are familiar with the regulatory framework of their region.
An Execution Plan is one of the first steps in the process. Included in this plan is environmental information and field surveys of the project site. The plan describes a schedule of decommissioning activities and the equipment and labor required to carry out the operation. An execution plan is required to secure permits from Federal, State, and local regulatory agencies. The BOEMRE will also analyze the environmental impact of the project and recommend ways to eliminate or minimize those impacts.
Federal agencies often involved in decommissioning projects include BOEMRE, National Marine Fisheries Service, US Army Corps of Engineers, US Fish and Wildlife Service, National Oceanic and Atmospheric Administration, US Environmental Protection Agency, US Coast Guard, and the US Department of Transportation, Office of Pipeline Safety.
To prepare a platform for decommissioning, tanks, processing equipment and piping must be flushed and cleaned and residual hydrocarbons have to be disposed of; platform equipment has to be removed, which includes cutting pipe and cables between deck modules, separating the modules, installing padeyes to lift the modules; and reinforcing the structure. Underwater, workers prepare the jacket facilities for removal, which includes removing marine growth.
Well Plugging and Abandonment
Plugging and abandonment is one of the major costs of a decommissioning project and can be broken into two phases.
The planning phase of well plugging includes:
In the GOM, the rig-less method, which was developed in the 1980s, is primarily used for plugging and abandonment jobs. The rig-less method uses a load spreader on top of a conductor, which provides a base to launch tools, equipment and plugs downhole.
Well abandonment involves:
Plugs must be tagged to ensure proper placement or pressure-tested to verify integrity.
According to BOEMRE, all platform components including conductor casings must be removed to at least 15 ft below the ocean floor or to a depth approved by the Regional Supervisor based upon the type of structure or ocean-bottom conditions.
To remove conductor casing, operators can chose one of three procedures:
Mobilization/Demobilization and Platform Removal
Mobilization and demobilization of derrick barges is a key component in platform removal. According to BOEMRE, platforms, templates and pilings must be removed to at least 15 ft below the mudlline.
First, the topsides are taken apart and lifted onto the derrick barge. Topsides can be removed all in one piece, in groups of modules, reverse order of installation, or in small pieces.
If removing topsides in one piece, the derrick barge must have sufficient lifting capacity. This option is best used for small platforms. Also keep in mind the size and the crane capacity at the offloading site. If the offloading site can't accommodate the platform in one piece, then a different removal option is required.
Removing combined modules requires fewer lifts, thus is a time-saving option. However, the modules must be in the right position and have a combined weight under the crane and derrick barge capacity. Dismantling the topsides in reverse order in which they were installed, whether installed as modules or as individual structural components, is another removal option and the most common.
Topside can also be cut into small pieces and removed with platform cranes, temporary deck mounted cranes, or other small (less expensive) cranes. However, this method takes the most time to complete the job, so any cost savings incurred using a smaller derrick barge will likely be offset by the dayrate.
Removing the jacket is the second step in the demolition process and the most costly. First, divers using explosives, mechanical means, torches or abrasive technology make the bottom cuts on the piles 15 ft below the mudline. Then the jacket is removed either in small pieces or as a single lift. A single lift is possible only for small structures in less than 200 ft of water. Heavy lifting equipment is required for the jacket removal as well, but a derrick barge is not necessary. Less expensive support equipment can do the job.
Pipeline and Power Cable Decommissioning
Pipelines or power cables may be decommissioned in place if they do not interfere with navigation or commercial fishing operations or pose an environmental hazard. However, if the BOEMRE rules that it is a hazard during the technical and environmental review during the permitting process, it must be removed.
The first step to pipeline decommissioning in place requires a flushing it with water followed by disconnecting it from the platform and filling it with seawater. The open end is plugged an buried 3 ft below the seafloor and covered with concrete.
Materials Disposal and Site Clearance
Platform materials can be refurbished and reused, scrapped and recycled or disposed of in specified landfills.
To ensure proper site clearance, operators need to follow a four-step site clearance procedure.
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