Summit Highlights Outlook, Challenges of Offshore Decommissioning

The challenges that the oil and gas industry faces in decommissioning a growing number of aging offshore projects will be highlighted at the oldest industry conference focus solely on decommissioning.

The Seventh Annual Decommissioning & Abandonment Summit 2015, which will take place March 17-19 at the Royal Sonesta Hotel in Houston, Texas, will bring together representatives of all major operators, global expert speakers and senior level delegates to share insights in addressing the technical, financial, legal and environmental challenges that the oil and gas industry faces in decommissioning.

Decommissioning has always been a part of an oilfield’s natural lifecycle, said Brian Twomey, managing director at Reverse Engineering Services Ltd., in an interview with Rigzone. However, oil and gas companies have only recent started considering the decommissioning costs of an offshore project as the issue has caught the attention of oil and gas board of directors.

“As we’re finding out, the decommissioning costs of a projects are really substantial, typically 1.2 times the actual construction costs,” said Twomey, who has more than 25 years of experience working in the field of offshore and onshore decommissioning. “It’s such a big number, it can impact the way a company develops a field.”

With the average age of offshore oil and gas fields over 30-50 years old, oil and gas operators are now facing hard choices, said Twomey, who will be participating in the summit. In some cases, companies don’t have enough funds to clean up the offshore wells, subsea, surface and onshore portions of a project. The industry now finds itself in a dilemma where it has to spend money to upgrade facilities to ensure they can be safely removed.

The oil and gas industry also lacks engineering knowledge for dealing with larger, more complicated decommissioning projects. In the industry’s early years, smaller platforms were the target of decommissioning. But not all of the platforms in need of removal today are small. Twomey noted a number of large platforms in Asia and the North Sea are or will be ready for decommissioning in the near future.

In many cases, platforms have not been designed with removal in mind. On some platforms, the piping systems have degraded to the point where they’re not safe to use. In some cases, simple things like implementing lifting locks inside infrastructure to make decommissioning easier are lacking. Additionally, lack of complete and accurate data about radioactive waste from production, mercury, asbestos or damage may prevent a company from tackling a decommissioning project.