DECOMMISSIONING INSIGHT 2015 - Decom North Seadecomnorthsea.com/uploads/pdfs/projects/Decommissioning-Insight … · Topside weight to be removed ... The Decommissioning Insight 2015

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DECOM

MISSIO

NIN

G IN

SIGHT 2015

OIL &

GAS U

K

DECOMMISSIONING INSIGHT 2015


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Contents

1. Foreword 52. Key Findings 63. Introduction 9 3.1 Survey Development and Methodology 9 3.2 DecommissioningForecasting 94. 2015 Decommissioning Survey Results 11 4.1 Annual Forecast Expenditure 11 4.2 Regional Breakdown 12 4.3 Oil Price Impact 14 4.4 Forecast Expenditure by

Decommissioning Component 155. Actual Decommissioning Expenditure

andActivityin2014 196. Supply Chain Capability 207. DecommissioningActivityForecast2015to2024 21 7.1 Well Plugging and Abandonment 21 7.2 FacilitiesandPipelineMakingSafe

andTopsidePreparation 29 7.3 Removal 35 7.4 Pipeline Decommissioning 45 7.5 Onshore Recycling and Disposal 48 7.6 SiteRemediationandMonitoring 518. Appendices 529. Glossary 54



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1. Foreword Oil & Gas UK’s Decommissioning Insight is the leading forecast fordecommissioningactivityandexpenditureon the UKContinental Shelf (UKCS).Producedannuallyover the lastfiveyears, thepublicationprovidesa ten-year forecastbyregion.The2015reportfocusesontheactivitiesof28operatorsandoffersinsighttohelptheindustrydevelopitscapabilitiesinthisemergingmarket.

Theindustryisforecasttospendatotalof£16.9billionoverthenextdecadeonthedecommissioningofoffshoreoilandgasinstallations,wells,pipelinesandothersubseainfrastructureontheUKCS.Thisoffersasignificantcommercialopportunityforthedomesticsupplychain,particularlythosecompaniesofferingcost-efficientsolutions.DevelopingnewskillsandtechnologiesinthisareawillallowthesupplychaintopioneeracomprehensiverangeofcapabilitiesintheUKthat can then be exported worldwide.

Thereareasmallnumberofmajordecommissioningprojectsnowunderway.UpcomingprojectslistedontheDepartmentofEnergy&ClimateChange’s(DECC)Pathfinderwebsite1includetheBraearea,Brent,Miller,MurchisonandThames.

TheoffshoreoilandgasindustrydeliverssignificantvaluetotheUK,payingHMTreasury(HMT)£2.2billionincorporatetaxesonproduction in2014-15, supportingaround375,000highly skilledandwell-paid jobs,andprovidinga securedomesticsupplyofprimaryenergy.TheUK-basedsupplychainisworld-class,withaglobalreachfortheexportofitsgoodsand services2.IftheUKistocontinuetoderivemaximumbenefitfromitsoilandgasresource,itwillbeimportantthatHMT,theOilandGasAuthority(OGA)andindustryworktogethertoavoidprematuredecommissioningandmakeeffortstoextendtheproductivelifeofexistingassetstorealisetheUKCS’fullpotential.

WiththeinceptionoftheOGA,itisexpectedthatitwillworkwithoperatorstoagreefieldcessationofproduction(CoP)datesthatsupportitsunderlyingobjectivetomaximiseeconomicrecoveryfromthebasin.Itaimstopreventthe‘dominoeffect’,wherethedecommissioningofoneassetincreasescostpressuresonsurroundingassets,potentiallyleadingtotheirearlyCoP.Oncethedecisiontodecommissionhasbeenagreed,theOGAwillworktoensurethatdecommissioningiscarriedoutcostefficiently,thatitcomplieswithallenvironmentalregulationsandthatthelearningsaresharedacrossthe sector.

Inadditiontotaxreformsannouncedthisyeartohelpattractnewinvestmentandgovernmentfundingofseismicsurveystoopenupnewareasforexploration,HMTisworkingwiththeOGAandindustryonlate-lifebusinessmodelsandthebarrierstocost-effectivedecommissioning,includingfiscalissues.

WhilemuchisbeingdonetoextendtheUKCS’productivelife,decommissioningisaninevitablepartoftheproductionlifecycleandmustbeundertakeninanenvironmentallysound,safeandcosteffectivemanner,withexistingeffortstoimprovetheefficiencyandreducethecostsofwellpluggingandabandonmentbeingstrengthenedbythepan-industryEfficiencyTaskForce.TheexperiencegainedoverthenextdecadewillprovidetheUKsupplychainwiththeopportunitytobecomewordleadersinthefield.

Oil & Gas UK would like to thank the operators who provided data to this survey. This document could only have been producedwiththeircontinuedsupport.

Oonagh Werngren OperationsDirector,Oil&GasUK

1TheDECCpathfinderwebsitecanbeviewedathttps://itportal.decc.gov.uk/pathfinder/decommissioningindex.html2 Oil & Gas UK’s Economic Report 2015 isavailabletodownloadatwww.oilandgasuk.co.uk/economicreport

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http://www.oilandgasuk.co.uk/economicreport


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2. Key Findings

• ActualexpenditureondecommissioningontheUKCSin2014wasjustover£800million,withmuchoftheforecastactivitycompleted3.

• Total forecast decommissioning expenditure from2015 to 2024 is £16.9billion. This is an increaseof £2.3 billion on the 2014 report’s ten-year forecast of £14.6 billion, primarily due to 47 new projectsentering this year’s survey4.

• Themajorityofnewprojectsappeartowardstheendofthe2015to2024timeframe,withnearlytwo-thirdsof the associated expenditureoccurring post-2020. Technological advances and improvedproduction costefficiencycoulddeferthetimingofdecommissioningfortheseprojects.

• Expenditureforecastsforexistingprojects,includedinboththe2014and2015surveys,haveremainedconsistent. Future cost reduction can be anticipated as the low oil price, improved decommissioningexperienceandtheworkofOil&GasUK’sEfficiencyTaskForcetakefulleffect.

• Fifty per cent of the total forecast expenditure from 2015 to 2024 will be concentrated in the centralNorthSea(£8.4billion).Thirty-twoofthenewprojectsareinthisregion.

• Sincethe2014report,totalforecastexpenditureinthecentralNorthSeaandthenorthernNorthSea/westofShetlandregionshasincreasedby£3billionto£14.1billion,anddecreasedbynearly£750millionto £2.8billioninthesouthernNorthSeaandIrishSea.

• Over thenextdecade,79platformsare forecast for removalacross theUKCS.This representsalmost 17percentofthesome470installationsthatwillrequiredecommissioningoverthenext30to40years.

• Thelargestcategoryofexpenditureiswellpluggingandabandonment(P&A)at46percentofthetotalforecastexpenditure(£7.7billion).Over1,200wellsareforecasttobepluggedandabandonedoverthenextdecade,representingcloseto30percentofthetotalnumberofwellsontheUKCSthatwilleventuallyrequiredecommissioning.

3 Thissurveycoversdatafromend-of-field-lifedecommissioningprojectsanddoesnotincludeexpenditureoractivityassociatedwithmid-lifedecommissioning.4The2014surveycoversthetimeframe2014to2023andthe2015surveycoversthetimeframe2015to2024.

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Central and Northern North Sea/West of

Shetland

Southern North Sea and Irish Sea

Total UK Continental Shelf

Number of wells for plugging and abandonment

950 274 1,224

Proportion of wells that are platform wells

55% 73% -

Topside modules to be removed

255 66 321

Topside weight to be removed

288,000 tonnes 78,890 tonnes 366,890 tonnes

Number of platforms 22 57 79

Substructure weight to be removed


Number of mattresses to be removed

6,145 3,350 9,495

Subsea infrastructure to be removed


Number of pipelines to be decommissioned

598 179 777

Length of pipelines to be decommissioned

2,189 kilometres 3,429 kilometres 5,618 kilometres

Total tonnage coming onshore


Forecast Activity 2015 to 2024

2014 Survey 2015 Survey

Platform well P&A £4.8 million £4.1 million

Subsea exploration and appraisal well P&A £17.4 million £7.8 million

Subsea development well P&A £11.6 million £9.9 million

Topside removal cost per tonne £2,900 £3,300

Substructure removal cost per tonne £4,300 £4,800

Average Forecast of Costs from 2015 to 2024 in the Central and Northern North Sea/West of Shetland

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2014 Survey 2015 Survey

Platform well P&A £2.7 million £3 million

Subsea exploration and appraisal well P&A £5 million £8.8 million

Subsea development well P&A £7.6 million £9.6 million

Topside removal cost per tonne £4,000 £4,600

Substructure removal cost per tonne £4,500 £4,400

Average Forecast of Costs from 2015 to 2024 in the Southern North Sea and Irish Sea

Someoftheaveragecostforecastsaresignificantlydifferenttothosepresentedinthe2014survey.Thesechangeswillbediscussedinsection7.

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3. Introduction3.1 Survey Development and MethodologyThe Decommissioning Insight 2015iscompiledfromtheresponsesof28companiesoperatingontheUKCStoan Oil & Gas UK survey carried out between June and September 2015. The survey asked operators to provide data on theiractualdecommissioningspendandactivityontheUKCSin2014andforecastsfortheperiod2015to20245.

Followingindustryfeedback,the2015reporthasbeenexpandedtoinclude:

• Theimpactoftheoilpriceondecommissioning

• Amorein-depthanalysisofFPSO(floating,production,storageandoffloadingvessel) decommissioningprojects

• Analysisoftheforecastcostpertonnefor‘makingsafe’offacilitiesforremoval

ThesurveystructureisbasedonthecomponentsofthedecommissioningWorkBreakdownStructureoutlinedinOil & Gas UK’s Decommissioning Cost Estimation Guidelines6.FurtherinformationonthesurveymethodologycanbefoundintheAppendix.

The informationpresented in this report isonanon-attributableandaggregatedbasis.Oil&GasUKhasnotappliedanyadditionalconditioningtothefigures.Analysishasbeencarriedoutonaregionalbasisandsplitintotwogroups: the central andnorthernNorth Sea/westof Shetlandand the southernNorth Seaand Irish Sea.Whereverpossible,thesegroupshavebeensplitfurther.Wherespecificprojectsarereferredto,thisinformationhasbeengatheredfrompublicallyavailablesources.

Followingrequestsfromindustry,Oil&GasUKisalsosurveyingdecommissioningactivityinNorway,whichwillbereportedseparately.Whencombined,thiswillprovideamorecomprehensivepictureofforecastdecommissioningactivityacrosstheNorthSea.

3.2 DecommissioningForecastingPlanningfordecommissioningcanbealongandchallengingprocessthatoperatorsstartwellbeforecessationofproduction(CoP).Overtime,thescopeofeachprojectisrefinedascomparativeassessmentsarecarriedoutto determine the optimum approach. Forecasting decommissioning expenditure at the outset of a project isthereforechallenging.Therearealsomanyuncertaintiesandfactorsinfluencingexpenditure,suchasthedurationofwellpluggingandabandonment(P&A)orthequantitiesofhazardouswastematerials.AsthefieldnearsCoPandtheprojectscopebecomesmorefullydefined,expenditureforecastsbecomefirmer.

Inthesurvey,operatorswereaskedtoprovideaprojectcostclassestimateusingtheAssociationfortheAdvancementofCostEngineering(AACE)guidelines(seeAppendix)foralloftheirprojects.

Ninety-seven per cent of the projects reported in the survey were classified using the AACE Cost Estimation ClassificationMatrix.Ofthese,justoverhalfwerereportedasaclass5and38percentreportedasaclass4.These willhaveprojectdefinitionlevelsfrom0to15percent,revealingthat90percentofprojectsareintheearlyplanning stagesofoutliningthescopeofdecommissioningactivitiesandcarryingoutfeasibilitystudies.Thereis,therefore,a degreeofuncertaintyinactivityandexpenditureforecastsincludedinthereport,particularlyforprojectstowardstheend ofthesurveytimeframe.

5Thissurveycoversdatafromend-of-field-lifedecommissioningprojectsanddoesnotincludeexpenditureoractivityassociatedwithmid-lifedecommissioning.6 The Decommissioning Cost Estimation Guidelinesareavailabletodownloadathttp://bit.ly/1K5Rhzs

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Onlyfiveper centofprojectswere reportedas class1or2,where the levelofprojectdefinition isbetween 30and100percentandtheyareeitheratthecontractingstageoralready inexecution.Projectsthathavea class1classificationhavetypicallyalreadycontractedoutalloftheworkandarefoundinthenear-termofthesurveytimeframe,thatis,before2020.

Thefollowingfigureshowsthepercentageofprojectsthatfallintoeachcostclasslevelbyyear.Projectsthatspanmultipleyearsarecountedineachyearthattheyincurspend.

Figure 1: AACE Cost Class Breakdown by Year

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4. 2015 Decommissioning Survey ResultsThetotalforecastdecommissioningexpenditureontheUKCSbetween2015and2024is£16.9billion7,comparedtotheten-yearforecastof£14.6billioninthe2014 Decommissioning Insight8. This increase is primarily due to new projectsenteringthesurveytimeframeratherthanincreasedcostestimatesfromexistingprojects.

AlthoughdecommissioningisstillinitsinfancyontheUKCS,itisagrowingareaofthebusiness.Accountingforjustoverthreepercentoftotalexpenditurein2014,thisisexpectedtorisetoaround12percentby2018.

4.1 Annual Forecast ExpenditureData from previous Decommissioning Insight reports (2011 to 2015) have been used to compare annualforecastexpenditure.As illustrated inFigure2overleaf,deferralofdecommissioningactivityhascauseda fallin annual forecast expenditure from 2015 to 2017, compared to figures published last year. Expenditure hassmoothedoutandnowpeakslater.£1.1billionisnowforecasttobespentondecommissioningin2015risingto £1.9billionin2018.

Thereis,however,alargeincreaseinforecastexpenditurepost-2020comparedtolastyear’sreport.Thisisduetotheinfluxofnewprojectsandhascausedapeakin2022of£2.2billion.

Overall,theaverageyearlyforecastexpenditureisnowaround£1.7billion,anincreaseonthe£1.5billionreportedin2014.Thisisduetonewprojectscausinghigheractivityforecastsoverthedecade.

Itisimportanttonotethattheforecastexpenditureissubjecttochangeasthescopeofdecommissioningprojectsbecomesmoredefinedovertime,particularlypost-2020.Oil&GasUKexpectsforecaststosmoothoutastheyarerevisitedinsubsequentsurveys(seesection3.2formoredetails).

7 This does not include expenditure associated with decommissioning onshore terminals.8The2015surveycoversthetimeframe2015to2024,whereasthe2014surveycoveredthetimeframe2014to2023.

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Figure 2: Comparison of the Annual Forecast Decommissioning Expenditure

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4.2 Regional BreakdownLookingattheregionalbreakdownofdecommissioningexpenditurefrom2015to2024,50percent(£8.4billion)isforecasttobespentinthecentralNorthSea(CNS)and34percent(£5.7billion)inthenorthernNorthSea(NNS)andwestofShetland(WofS).Thehigherproportionofexpenditureintheseregionsreflectsthenumber,sizeanddegreeofcomplexityof theprojects.Sixteenpercent (£2.8billion) is,meanwhile, forecast tobespent in thesouthernNorthSea(SNS)andIrishSea.

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Figure 3: Comparison of Forecast Decommissioning Expenditure

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2014 Report £11.1 billion £3.5 billion

2015 Report £14.1 billion £2.8 billion

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Central and Northern North Sea/West of ShetlandTotalforecastdecommissioningexpenditureintheseregionshasincreasedby£3billionto£14.1billion.Theriseinexpenditureof£3.9billionthatislargelydrivenby41newprojectsofvaryingsizeshasbeenpartiallyoffsetbyadeclineof£850milliondueto14projectsbeingdeferredoutside,orpartiallyoutside,thesurveytimeframe (2015 to 2024). The shift in these 14 projects reflects efforts to extend field life or defer decommissioningexpendituretoimprovecashflowinthecurrentclimate,andiscontributingtothedeclineinforecastexpenditureseenbetween2015and2017,inFigure3onthepreviouspage.

Themajorityofnewprojectsenteringthesurvey,meanwhile,appeartowardstheendofthetimeframeandintheCNSarea.Thelargestincreaseinforecastexpenditureisinthatregionat£2.1billion.Thedeferralofprojectsthatpreviouslyappearedinthenear-termhasalsocontributedtotheincreasedexpenditurepost-2020.

Thereisalsoasignificantrise(seesection7)inthevolumeofmaterialtobedecommissionedintheCNS,NNSandWofSregionswithinthesurveytimeframecomparedtofigurespublishedinthe2014report,particularlyinthenumberofmattressesandlengthofpipeline.Mostofthisincreaseisagainforecastinthesecondhalfofthesurveytimeframeandattributedtothenewprojects.Someoperatorshave,thisyear,providedamoredetailedscheduleofdecommissioningactivity than inprevious years, further contributing to the rise in volume tobedecommissioned.

Southern North Sea and Irish SeaForecastexpenditureoverthenextdecadeintheseregionshasdecreasedby£745millionto£2.8billion.Whilesixnewprojectshaveenteredthesurvey,contributingnearly£120millionofexpenditure,thisisoffsetbyareductionof£860millionassevenprojectsmovepartiallyorcompletelyoutofthetimeframe.Operatorsreportthattheyarefocusedonmaximisingeconomicrecoveryandareinvestingsignificanteffortandcapitalintoextendingfieldlife,whichhascausedtheseprojectstobedeferred.

Furthermore,when ownership of an asset changes, it takes the new owner some time towork through thedecommissioning plans. This not only causes projects included in the survey to shift, but can also result indecommissioningbeingdeferred.ThishasbeenreflectedintheSNS/IrishSeadata.

4.3 Oil Price ImpactOperatorsbeginplanningfordecommissioningfaraheadofCoP.ThecomplexdecisiononthetimingofCoPismadebytheoperator inconversationwith industryregulatorsandtakesmanyfactors intoaccount, includingfutureprospects,oilpriceandthewiderbusinessenvironment.

Surveyresultsshowthat57percentofprojectsintheCNSandNNS/WofSregionsand44percentofprojectsintheSNSandIrishSeahavebeeninfluencedbytheloweroilprice.Insomecases,thishasbroughtnewprojectsintothesurveytimeframe(2015to2024).Forexample,theoilpriceandwiderbusinessenvironmentontheUKCShasledoperatorstoconsiderdecommissioningplansmorerobustly,incurringforecastexpenditureinthisareatowardstheendofthesurveytimeframe.Inotherinstances,thedecreaseinoilpricehasactuallybroughtforwardtheexpectedCoPdateanddecommissioning.FairfieldEnergyrecentlyannounceditsdecisiontodecommissiontheDunlincluster,citingthedepressedoilpriceand“challengingoperationalconditions”amongthereasons.

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However,even though the impactof the loweroilpricecanbeclearly seen,notallnewprojectsareadirectconsequenceofthefallinoilprice.Operatorsreportthatsomeactivitywasjustoutsidethe2014surveytimeframeand its inclusion in this year’s report is unrelated to changes in the market.

Although,itispossiblethatthefullimpactoftheoilpricecycleisnotyetfullyreflectedinthedata.Forecastsfordecommissioningareupdatedatdifferenttimesduringtheyear,usingassumptionsonfutureoilprice,operatingcostsandrecoverylevelstodetermineafield’seconomiclimit.Aprolongedperiodoflowoilpricescouldresultinmorecompanieselectingtoceaseproductionanddecommissiontheirfields.

The impact of the oil price fall could, however, be partially offset by increased industry focus on efficiencyimprovements,whichisexpectedtoresultinanaverage22percentreductioninthecostofoperatingexistingfieldsbytheendof2016.Thesepotentialgainscouldmaintaintheeconomicviabilityofsomefields9.

4.4 Forecast Expenditure by Decommissioning ComponentDecommissioning expenditure is categorised according to components referenced in the Work BreakdownStructure(seesection3.1andtheAppendixformoreonthesurveymethodology).Thecomponentsthatincurexpenditure are determined by the size and type of the project. A large, complex decommissioning project,forexample,may incurcostsacrossallcategories.Projectssuchasthesewill involvesignificantoverheadsforprojectmanagementandoperationalcosts,aswellasrequiringsubstantialengineeringexpertise,equipmentandpersonnel.Incontrast,decommissioningasmallsubseatie-backmayonlyinvolvesinglewellP&A.

Figure4overleafbreaksdowntheannualforecastexpenditureintothreecategories:

i. Operatorprojectmanagement/facilityrunningcosts(owners’costs)

ii. Well P&A

iii. Removalandotherassociatedactivity

Owners’costsareexpensesincurredtooperatethedecommissioningprogrammepost-CoPthroughtocompletion.Thesecostsincludemanagementofthefacilityinboththepre-normallyunmannedinstallation(Pre-NUI)andNUIstages,aswellasforlogistics,adecommissioningteam,deckcrew,powergeneration,platformservices,integritymanagement(inspectionandmaintenance)andspecialistservices.

Theowners’costsareforecasttoremainrelativelystableacrossthetimeframe,withanaverageannualexpenditureofjustover£370million.Theygraduallyincreasetoapeakin2022comparedtothepeakin2015forecastlastyear.Thisshiftreflectsthedeferralofsomeexistingprojectsandnewprojectsenteringtowardstheendofthe surveytimeframe.

Well P&A costs include rig upgrades, studies to support well programmes, well suspension, wells projectmanagement,operationssupport,andspecialistservicessuchaswirelineorconductorrecovery.Thisspendisforecasttopeakin2018,withanaverageof justover£770millionperyearovertheten-yeartimeframe.Thiscomparestoanannualaverageof£640millioninlastyear’sreport,withtheincreaseprimarilyduetoalargeriseinsuchactivityintheCNSandNNS/WofSregions.

9 Oil & Gas UK’s Economic Report 2015 isavailabletodownloadatwww.oilandgasuk.co.uk/economicreport

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Removalandotherassociatedactivity includesexpenditureon‘makingsafe’;topsidespreparation;removaloftopsides,substructuresandsubseainfrastructure;pipelinedecommissioning;disposal;recycling;siteremediationandmonitoring.Expenditurefrom2015to2024associatedwiththisactivityisforecasttobelowerintheshortterm,increasingtowardstheendofthesurveytimeframe.Theannualaverageforecastexpenditureis£550million.

Figure 4 : Total Forecast Decommissioning Expenditure by Work Breakdown Structure Category

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Operator project management/facility running costs £3.7 billion

Well P&A £7.7 billion

Removal and other associated activity £5.5 billion

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Figure5overleafbreaksdownthetotalforecastexpenditurebyWorkBreakdownStructurecomponentproportionfor allUKCSprojects, subseaprojects, platform removal projects and FPSOvessel projects. It is important tonotethatthegraphsonlyincludethebreakdownofexpenditurethatfallswithin2015to2024.Decommissioningprojectscanspananumberofyearsandthereforesomeexpenditureassociatedwithaprojectmayfalloutsidethesurveytimeframe.

In linewith previous reports, well P&A remains the largest category of forecast expenditure, accounting for 46 per cent (£7.7 billion) of the total. For subsea projects, this proportion rises to 63 per cent compared to sixpercentforowners’costs.

Ninety-sevenpercent(£3.6billion)ofthetotalowners’costsareconcentratedintheCNSandNNS/WofSregions.Intheseareas,moreplatformsaretypicallymannedresultinginmuchhigherfacilityrunningcostsandprojectsarealsolargerandmorecomplex,with,inturn,higheroperatorprojectmanagementcosts.Theowners’costsaccountfor36percent(£2.9billion)ofexpenditureonplatformremovalprojectsintheseregionscomparedtofourpercent(£115million)intheSNSandIrishSearegions.

Removalsexpenditure(topsides,substructureandsubseainfrastructure)accountsfor19percent(£1.6billion)ofthetotalexpenditureintheCNSandNNS/WofSregionsand22percent(£590million)intheSNSandIrishSea.Thisisduetothelowerproportionofexpenditureonowners’costsintheSNSandIrishSeaareas.

DecommissioningafieldservicedbyanFPSOprimarilyinvolvessubseaactivity,althoughsomeexpenditureisalsoassociatedwithdisconnectingtheFPSO.TheseactivitiesarereflectedinthebreakdownofexpenditureseeninFigure5.ThetotalforecastdecommissioningexpenditureforfieldsservicedbyanFPSOis£2billion,almostallofwhichwillbespentintheCNSandNNS/WofSregions.SixtypercentofthesecostsareattributedtowellP&Aand13percentduetosubseainfrastructureremoval.Removalofsubstructurereferstostructuressuchasanchorpointsthatareusedtofixthevesseltotheseabedandsubseatemplates.

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Figure 5: Forecast of Total Decommissioning Expenditure by Work Breakdown Structure Component and Project Type from 2015 to 2024

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Well P&A: 63%

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All UKCS Projects Subsea Projects

CNSandNNS/WofSPlatformRemovalProjects SNSandIrishSeaPlatformRemovalProjects

FPSO Vessel Projects

page 19

5. ActualDecommissioningExpenditureandActivityin2014Analysiswascarriedouttoassessactualdecommissioningactivityin2014versusforecasts.

Figure 6: Forecast versus Actual Decommissioning Activity

Decommissioning Activity 2014 Forecast Activity 2014 Actual Activity

Platform well P&A 37 30

Subsea well P&A 19 20

Mattresses 11 11

Subsea infrastructure 253 tonnes 253 tonnes

Pipelines 27 kilometres 0.2 kilometres

Number of modules for 'making safe'

33 34

Number of modules for topside preparation

5 0

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3,000 tonnes 0

Much of the planned decommissioning activity was undertaken last year. The forecast expenditure ondecommissioningfor2014was£1billioncomparedtotheactualexpenditureofjustover£800million.

Activitiesthatwerenotcarriedouthavebeenpostponedtothisyearoruntillaterinthedecade.Insomecases,thiscouldreflectthecurrentmarketandtheneedtodeferdecommissioningexpendituretoimprovecashflow.

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6. Supply Chain CapabilityWithover£800millionspentondecommissioningontheUKCSin2014(seesection5)and£16.9billionforecasttobespentintotaloverthenexttenyears,decommissioningoffersasignificantopportunityfortheUKsupplychaintodevelopskills,technologiesandexpertisethatcanalsobeexportedworldwide.

Asmallnumberoflargedecommissioningprojectsarealreadyunderway,while95percentofprojectsincludedin this surveyare in theearlyplanning stagesandwillmove towards the contracting stagewithin thenext fewyears.

Companiesandlocalauthoritiesarepreparingforthisgrowthinthemarketbyinvestinginnewdecommissioningfacilitiesandextendingharboursandports.Aberdeenharbour,forexample,isbeingexpandedtoincludeadditionalfacilities atNiggBay,withheavy-lift capabilities and theability to accommodate larger vessels10. The Lerwick PortAuthorityisalsoinvestingaround£30millionintoextendingitsquaysanddevelopingdeep-waterberths.ItbelievesthisexpansionwillmakeLerwickwellplacedtotakeonfurtherdecommissioningwork11. Montrose Port Authoritywillbeinvesting£15milliontobuildonpreviousupgradestotheharbourtoincludemoredeep-waterberthsandheavy-liftpads12.Also,PetersonandVeoliaaredevelopinga£1milliondecommissioning facility inGreatYarmouthtomakethisareathecentrefordecommissioningintheSNSregion13.

TheseinvestmentswillhelpestablishtheUKasahubfordecommissioningexpertiseandcapability.Akeyelementindevelopingthesupplychain’sfuturecapabilitywillbeco-operativeworkingpracticestocreateinnovativesolutionstoundertakedecommissioninginanenvironmentallysound,safeandcost-effectivemanner.

10 www.aberdeen-harbour.co.uk/future/nigg-bay-development/project-progress 11www.lerwick-harbour.co.uk/quay-contract-dalesv12www.montroseport.co.uk/news13www.onepeterson.com/en/newsandwww.veolia.co.uk/media/media

page 20

http://www.veolia.co.uk/media/media

http://www.aberdeen-harbour.co.uk/future/nigg-bay-development/project-progress

http://www.lerwick-harbour.co.uk/quay-contract-dalesv

http://www.montroseport.co.uk/news

http://www.onepeterson.com/en/news

page 21

7. DecommissioningActivityForecast2015to2024Thefollowingsectionsfocusonspecificareasofdecommissioningactivity.

7.1 Well Plugging and AbandonmentThepurposeofwellP&Aistoisolatethereservoirfluidswithinthewellboreandfromthesurfaceorseabed.ThisactivityiscarriedoutontheUKCSinaccordancewithindustryguidelines14andlegislation15 and can be challenging. Itmay involve intervention; the removal of downhole equipment, such as production tubing and packers; and well-scaledecontamination treatment.Theprocessalso requires thewellheadandconductor tobe removed tothree metres below the seabed.

WellP&Aisthelargestcomponent(46percent)ofdecommissioningexpenditureintheUKCSoverthenextdecadeandisforecasttocost£7.7billionintotaloverthisperiodwith1,224wellsscheduledforP&A.Thisrepresentscloseto30percentofthesome4,300wellsthatwilleventuallyrequiredecommissioninginthebasin.

Thissurveycoversthreetypesofwells:platformwells;subseadevelopmentwells;andsuspendedsubseaexplorationandappraisal(E&A)wells.

7.1.1 TheCentralandNorthernNorthSea/WestofShetlandBetween2015and2024,950wellsareforecasttobepluggedandabandonedintheseregions.Thisisanincreaseofover400wellscomparedtothe2014report,primarilyduetothe41newprojectsenteringthesurveyintheseregions,themajorityofwhichareconcentratedintheCNS.

The rise in total forecast expenditure onwell P&A in these regions by £1.5 billion to £6.2 billion is small incomparisontothisgrowthinactivity.ThispointstotherelativelylowexpenditureforecastsforanumberofthenewprojectsassomeofthewellswillbesimpleP&Asandarecheapertoperform.Deflatedrigratesinthecurrentclimatemayalsobereflectedintheseexpenditureforecasts.

Themajorityoftheincreaseinactivityisconcentratedtowardstheendofthesurveytimeframe,althoughthereareadditionalwellsinthenearerterm.In2021,153newwellsareforecasttobepluggedandabandoned.Thispeakisdueto27fieldsschedulingwellP&Aatthesametime.Itisexpectedthatthisactivitywillsmoothoutasforecastsarerevisitedtobalancethedemandforvesselsandpersonnelthatcarryoutthework.

14 Guidelines on the Abandonment of Wells and Qualification of Materials for Abandonment are available to download at http://oilandgasuk.co.uk/product/op105andhttp://oilandgasuk.co.uk/product/op109

15Seewww.legislation.gov.uk/uksi/1996/913/made

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AsseeninFigure7,activityintheCNSisforecasttopeakin2021andremainhighthereafter.Bycontrast,activityintheNNS/WofSregionsisforecasttobehigherinthenear-term,droppingofftowardstheendofthetimeframe.TheproportionofplatformwellsintheCNSismuchlowerthanalltheotherregionsoftheUKCS.

Forecastexpenditure,however,doesnotcloselycorrelatewiththeselevelsofactivity,butisinfluencedbythetypeofwells.Yearswithagreaterproportionofsubseawellstypicallyhavehigherexpenditureasthesewellsarerelativelymoreexpensivetoplugandabandon.Furthermore,thecomplexityofthewellstobepluggedandabandonedinayearcanalsoinfluenceexpenditure.

Figure 7: Number of Wells Forecast to be Plugged and Abandoned by Type and Annual Expenditure

Central North Sea

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Northern North Sea and West of Shetland

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Total 950 £6.2 billion 55%

CNS 624 £4 billion 47%

NNS/WofS 326 £2.2 billion 72%

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HistoricalVariationinCostForecastsThecostofwellP&Aisdependentonanumberoffactors,includingwaterdepth,weather,complexity,thewell’sageandpotentiallymeasuresthatmayberequiredtopreventwellcollapsecausedbydepressurisation.

Asseen inFigure8opposite,theaverageandrangeofexpenditureforecastsforplatformwellP&Aare lowerthanforbothtypesofsubseawells.Platformwellsaretypicallynotsubjecttothesameweatherconstraintsorrigrequirementsandarethereforecheapertoperform.PlatformwellP&Acanalsobecarriedoutmoreeasilyinbatchesorcampaigns,allowingtheoperatortosharemobilisationcostsandotherefficiencygainsacrossanumberofwells.

Awiderangeinexpenditureforecastsforsubseawellshasbeenreportedconsistentlyoverthelastthreesurveyyears.Thisreflectsvariationsinthetypesofwells.Operatorshaveadvisedthatwellsatthelowendofthecostrangearetypicallysimple,rig-lessP&As,usingwireline,pumpingorcranejackswherethereservoirmayalreadyhavebeen isolated.Wellsat thetopofthecostrangearetypicallycomplex,rig-basedP&As,withchallengingaccessandcementing.Theymayrequireretrievaloftubingandcasing,millingandcementrepairs.

Theaverageexpenditureforecastforallwelltypeshasdecreasedsincethe2014reportbyvaryingdegrees.ThesignificantdropinaverageforecastexpenditureforsuspendedsubseaE&Awellsisduetoanumberofnewwellswithrelativelylowerexpenditureforecasts,andbringsitbackinlinewiththeforecastsseenin2013.

Forsubseadevelopmentwells,theaveragehasslightlydecreasedwhiletherangehaswidened.Forsomeofthewellsatthetopofthecostrange,forecastshavebeenrevisedupandoperatorswhohavecarriedoutwellP&Areport that there can be unexpected problemswith the condition of thewell, also highlighting the potentialsavingsthatcanbegainedfromeffectivelogisticsplanning.Severalofthelowercostwellsarenew,alsowideningthecostrangeandbringingtheaverageforecastexpendituredown.

Theloweraveragewellcostsforecastinthisyear’ssurveymayalsoreflectthefallinrigrates.FromJanuary2014toJuly2015,theday-ratesforsemi-submersiblerigsfellbyaround40percent,whileday-ratesforjack-uprigsdeclined by a lesser extent16.However,costestimationmethodsvaryacrossoperators,withsomeusinghistoricaveragestoforecastfuturecosts.Operatorsalsoupdatetheircostestimatesatvarioustimesduringtheyear,soitispossiblethatthelowerrigrateshavenotyetbeenfullyreflectedintheforecasts.

Oil & Gas UK is working co-operatively with industry, through its Efficiency Task Force, to exploremeasuresthat will improve efficiencies and reduce well P&A costs. As the largest category of decommissioningexpenditure,therearesubstantialgainstobemadebyreducingcostswhilemaintaininghighhealth,safetyand environmental standards.

16 Oil & Gas UK’s Economic Report 2015 isavailabletodownloadatwww.oilandgasuk.co.uk/economicreport


page 25

Figure 8: Historical Variation in Well Plugging and Abandonment Cost Forecasts in the Central and Northern North Sea/West of Shetland

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Well P&A 2014 Average 2015 Average

Platform wells £4.8 million £4.1 million

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Subsea development wells £11.6 million £9.9 million

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7.1.2 The Southern North Sea and Irish SeaBetween2015and2024,274wellsareforecasttobepluggedandabandonedintheseregions.Thisisadecreaseof143wellsonthe2014report,assevenprojectsaredeferredandthereforemovepartiallyorcompletelyoutsideofthesurveytimeframewhileoperatorsworktomaximiseeconomicrecoveryandextendfieldlifeorpostponedecommissioningexpendituretoimprovecurrentcashflow.

TheassociatedexpenditureforwellP&Aintheseregionshasthereforealsofallenby£200millionto£1.5billion.ThedeclineintheforecastisrelativelysmallcomparedwiththeanticipatedfallinactivityastheaveragecostsforwellP&Aintheseregionshavebeenrevisedup,asseeninFigure10opposite.

Figure9showsthatthemajorityofactivityintheSNSandIrishSeaisconcentratedinthefirsthalfofthesurveytimeframe,where therehasbeena slight increase inwellP&Aactivity.This reflectshowsomeoperatorsareconsolidatingwellP&Aactivityfortheirprojectsintofeweryearsthanpreviouslyforecast.

Bycontrast,theforecasttowardstheendofthetimeframehasreducedasprojectsaredeferred,highlightingthelevelofuncertaintyinforecaststowardstheendofthedecade.Oil&GasUKexpectsthatactivitywillsmoothoutmoreevenlyacrosstheten-yeartimeframeasforecastsarerevisited.

AsintheCNSandNNS/WofSregions,theyearswithhighersubseawellP&Aactivitytendtohaverelativelyhigherexpenditureforecastsasthesewellsaremoreexpensivetoplugandabandon.

Figure 9: Number of We lls Forecast to be Plugged and Abandoned by Type and Total Annual Expenditure in the Southern North Sea and Irish Sea

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274 £1.5 billion 73%

page 27

HistoricalVariationinCostForecastsTheaverageandrangeofcostforecastsforplatformwellP&AintheSNSandIrishSeahaveremainedrelativelystableoverthelastfivesurveys.

ForsuspendedsubseaE&Aandsubseadevelopmentwells,averageforecastcostshave increasedconsistentlyoverthelastfouryears,assomeoperatorsrevisetheirforecastsupwardsbasedonexperiencegainedinwellP&A.Anumberofwellswithlowercoststhatwerepreviouslyincludedinthesurveyaredeferredandmoveoutofthetimeframe,increasingtheaverageforbothtypesofsubseawell.IntheSNSandIrishSea,recentreductionsinrigratesdrivenbythecurrentlowoilpricehavenotyetbeendetectedintheseexpenditureforecasts.

AsintheCNSandNNS/WofSregions,theaverageandrangeofexpenditureforecastsforplatformwellP&Aarelowerthanforthesubseawells.

Figure 10: Historical Variation in Well Plugging and Abandonment Cost Forecasts in the Southern North Sea and Irish Sea

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Well P&A 2014 Average 2015 Average

Platform wells £2.7 million £3 million

Subsea E&A wells £5 million £8.8 million

Subsea development wells £7.6 million £9.6 million

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7.1.3 Rig TypeThereareanumberofmethodsthatcanbeusedforplatformwellP&Aandtherigtypewilldependonwhethertheoriginaldrillingderrickisinplaceandthewaterdepthwheretheplatformislocated.

Platformwellsaretypicallypluggedandabandonedinphases.Thefirstphasecanberig-lessanduseslowercostmethodssuchaswireline,coiltubingorahydraulicworkoverunit.Thisisfollowedbythesecondandthirdphasesthataremorelikelytorequirearig.

IntheCNSandNNS/WofSareas,themajorityofplatformwells(70percent)willbepluggedandabandonedusinganintegralplatformrig.Bycontrast,jack-uprigsaremostcommonlyused(93percent)intheSNSandIrishSeaasmanyoftheplatformsdonothaveintegralrigs.

Forsubseawells,thedeeperwaterdepthsintheCNSandNNS/WofSmeanthatsemi-submersiblerigsaretypicallyused,whilejack-uprigswillbeusedintheshallowerwatersoftheSNSandIrishSea.

Figure 11: Forecast Rig Type for Well Plugging and Abandonment from 2015 to 2024

PlatformWellP&A

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page 29

7.2 FacilitiesandPipelineMakingSafeandTopsidePreparation‘Makingsafe’activitiesmustbecarriedoutinlinewithenvironmentalandsafetyconsiderationsinpreparationforremovingafacilityordecommissioningapipeline.‘Makingsafe’offacilitiesincludescleaning,freeingequipmentofhydrocarbons,disconnectionandphysical isolation,andwastemanagement.The ‘makingsafe’ofpipelinesinvolves depressurising the pipeline and removing any hydrocarbons. The pipeline will then be cleaned and purged,withthecleaningprogrammebasedonthespecificneedsofthesystem.Thismayinvolvepigs,whicharemaintenancetoolsusedtocleanorinspecttheinsideofpipelines.

Pipelines‘makingsafe’issometimescarriedoutalongsidefacilities‘makingsafe’,particularlyinthecaseofsmalltopsideandpipelinetiebacks.Inthesecases,thesameteamandsomeofthesameequipmentcanbeusedforbothactivities.‘Makingsafe’canbecarriedoutseveralyearspriortoremovingaplatformordecommissioningapipeline,leavingthemhydrocarbonfreeuntilthenextphaseofdecommissioning.

For facilities, thenextphase involves separating the topsides andprocess andutilitiesmodules, and carryingoutappropriateengineering,suchas installationof liftpointstoprepareforremoval.Thetopsidepreparationrequiredwilldependontheremovalmethodused.Forpipelines,thisnextphaseofdecommissioningisdiscussedinsection7.4.

7.2.1 CentralandNorthernNorthSea/WestofShetlandFrom2015to2024,thereareforecasttobe314topsidemodulesfor‘makingsafe’and340modulesfortopsidepreparationintheseregions.Thisisanincreaseof113modulesfor‘makingsafe’and126modulesforpreparationsince the 2014 report, reflecting the new projects added to this year’s survey. Additional activity is includedbetween2017and2019,withalargeincreasefrom2020onwards.Near-termactivityhassmoothedoutsincethe2014forecastandisspreadmoreevenlyacrossthedecade.

Thetotalexpenditureonfacilities‘makingsafe’andtopsidepreparationoverthenextdecadeintheseregionsisforecasttobe£566million,ariseof£146milliononlastyear’sestimate.

In theCNSandNNS/WofSareas, topsidepreparation is typically carriedout in theyearprior to removaland‘makingsafe’twoyearsbeforeremoval.AsseeninFigure12overleaf,thereisahighernumberofmodulesfortopsidepreparationthan‘makingsafe’intheyears2015and2016,astheassociated‘makingsafe’activitieswouldhave already been carried out.

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Figure 12: Forecast Number o f Topside Modules for ‘Making Safe’ and Topside Preparati on in the Central and Northern North Sea/West of Shetland

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page 31

Between 2015 and 2024, nearly 2,400 kilometres of pipeline are forecast to be ‘made safe’ in the CNS and NNS/WofSareas.Asseen inFigure13,activity isnotspreadevenlyacrossthedecade,but is forecasttopeakat close to750kilometresofpipeline in2021,with11projects schedulingactivity. Themajorityof activity isconcentratedpost-2020andtheforecastlargelymirrorsthatforpipelinedecommissioning(seesection7.4).

Figure 13: Forecast Kilometres of Pipeline for ‘Making Safe’ in the Central and Northern North Sea/West of Shetland

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Pipeline 'making safe' 2,350 £117 million

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7.2.2 Southern North Sea and Irish SeaFrom2015to2024,thereareforecasttobe66topsidemodulesfor‘makingsafe’and65modulesfortopsidepreparationintheseregions.ThisissignificantlylowerthanintheCNSandNNS/WofSareas,asalargeproportionoftheplatformsintheSNSandIrishSeaaresmallsatelliteinstallationsandNUIswithfewertopsidemodules.Thetotalexpenditureonfacilities‘makingsafe’andtopsidepreparationintheseregionsisthereforeforecasttobemuchlowerat£137millionoverthenextdecade.

ThesmallersizeoftheinstallationsintheSNSandIrishSeaalsomeansthatitispossibleforboth‘makingsafe’andtopsidepreparationactivitytobecarriedoutinasingleyear,reflectedintheircloselyalignedschedulesseeninFigure14.Someoperatorsdo,however,plantocarryout‘makingsafe’intheyearpriortotopsidepreparation.

Activity is not spread evenly across the decade, with years of high activity and years of next to no activity.Oil&GasUKexpectsthatthiswillsmoothoutasforecastsarerevisited.

Figure 14: Forecast Number of Topsi de Modules for ‘Making Safe’ and Topside Preparati on in the Southern North Sea and Irish Sea

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page 33

Overthenextdecade,nearly2,500kilometresofpipelineareforecasttobe‘madesafe’intheSNSandIrishSea.Activityisforecasttopeakatjustover600kilometresofpipelinein2016,andvariessignificantlyoverthenexttenyears.Thespikesinpipeline‘makingsafe’activitygenerallyprecedethespikesinpipelinedecommissioningactivityshowninsection7.4.Itisexpectedthatactivitywillsmoothoutasforecastsarerevisited.

Figure 15: Forecast Kilometres of Pipeline for ‘Making Safe’ in the Southern North Sea and Irish Sea

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7.2.3AverageCostperTonneForecastsforMakingSafeTheaveragecostpertonneforecastfor‘makingsafe’offacilitiesis£440intheCNSandNNS/WofSregionsand£990intheSNSandIrishSea.Therangeofcostpertonneforecastsisbroadinallregions,butespeciallyintheSNSandIrishSea.Thescopeofworkassociatedwith‘makingsafe’willbesimilaracrossdifferentplatformtypes.Activitywill take longeron larger structures,but thefixedcostswill be similar, increasing the costper tonneforecastsforthesmaller,lighterstructurescommonlyfoundintheSNSandIrishSea.TheNUIswillalsorequiretransportbyhelicopteroranaccommodationvesselforateamtocarryout‘makingsafe’activities,addingfurthercost.ManyoftheinstallationsintheSNSaresmallerNUIs,contributingtothehigheraveragecostforecastsandlargerrange.ExpenditureatthelowerendoftherangeisinlinewiththoseseenintheCNSandNNS/WofSareasandislikelytobeassociatedwithlarger,mannedplatforms.

Figure 16: Variation in the ‘Making Safe’ Cost per Tonne Forecasts for Topsides Split by Region

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7.3 RemovalRemovalisclassifiedastheremovaloftopsides,substructures(jackets)andsubseainfrastructureandaccountsfor18percent(£3billion)ofthetotalforecastdecommissioningexpenditureontheUKCSfrom2015to2024.FPSOweightshavenotbeenincludedinthiscategoryastheyareusuallyrelocatedorsoldforreuseorrecycling.

Aswellasthecostsassociatedwithphysicalremoval,thisphasealsoincludesexpenditurefortransportationandonshoreload-in,wherethestructureistransferredtothedock.

Themostcommonmethodsfortopsideremovalarepiece-small,reverseinstallationorsinglelift.Thepiece-smallmethod involves dismantling the topside using onshore demolition techniques to produce small,manageablepiecesthatcanbetransportedonshore.Forreverseinstallation,thetopsidemodulesareliftedseparatelyontoatransportationbargeorthedeckofthecranevesselbeforebeingtakenonshore.Thesingle-liftmethodinvolvesremovingthetopsideinonepiece,andmayinvolveextraengineeringworktoreinforcethetopsideinpreparationforremoval.Astechnologymovesontokeepupwiththedecommissioningmarket,vesselsarebeingdesignedtoliftheavierloads.

Earlierthisyear,RoyalDutchShellbeganapublicconsultationonitsplantoremovethefirstoftheBrentplatformsinwhatwill be thebiggestNorth Seadecommissioning project to date. Following a 30-day consultation, thedecommissioningprogrammewasapprovedbytheUKGovernment.The24,200tonnetopsideoftheBrentDeltaplatformwillberemovedbyAllseasGroupinasingle-liftbythePioneeringSpiritheavy-liftvessel.

Theliftwillbecarriedoutoncompletionofthoroughpreparations,includingthestrengtheningofthetopsideusing200tonnesofsteel,andwillbeoneoftheheaviesttheNorthSeahaseverseen.AccordingtoShell,thissingle-lifttechniquewillsubstantiallyreducetherisk,costandenvironmentalimpactofremovingtheBrentplatforms17.

7.3.1 Topside RemovalCentral and Northern North Sea/West of ShetlandAtotalof£1.1billionisforecasttobespentremoving255topsidemodulesoverthenextdecadeintheseregions(seeFigure17overleaf),withanaveragetopsideweightof13,000tonnes.Overhalf(134modules)ofthisactivityislocatedintheCNScomparedto80percentintheNNSinthe2014report.ThisshiftisduetothelargenumberofnewprojectsnowearmarkedfordecommissioningintheCNSregion,ratherthanadecreaseinforecastactivityin the NNS.

Thenear-termforecastfortopsideremovalissimilartothe2014report,withhighlevelsofactivityin2016.Someoftheseprojectsarewellunderwayandthetimelinesforremovalarerelativelyfixed,althoughsomeflexibilityistypicallybuiltintothesecontracts.Bycontrast,activityinthesecondhalfofthedecadehasincreasedsignificantlysincelastyear,withninenewplatformsenteringthesurvey.Relativetothe2014report,activityisspreadmoreevenlyacrossthedecade.Lastyear,apeakwasforecastin2020,butthisisnowspreadacrossmultipleyearsasprojectsundergosmalltimelineshiftsinresponsetothemarket.

17Seewww.shell.co.uk/sustainability/decommissioning/brent-field-decommissioning.html

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Figure 17: Forecast Number of Topside Modules to be Removed in the Central and Northern North Sea/West of Shetland

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Topside removal 288,000 255 modules on 22 platforms £1.1 billion

Southern North Sea and Irish SeaOver the next decade, £250million is forecast to be spent on removing 66 topsidemodules in these areas(seeFigure18opposite).Thisisadecreaseontheforecastinthe2014reportassomeactivityshiftsoutofthe surveytimeframe.

Theaverageweightofthe57platformstoberemovedinthenextdecadeisalmost1,400tonnes.Whilelargeheavy-liftvesselscanbeusedforremoval,smallerbargesarealsocapableof liftingthisweight.Thesingle-liftmethodislikelytobethemostcommonlyusedintheseregionsduetothesmallerstructuresize.Insomecases,thetopsideandsubstructurecanberemovedtogether inone lift,however, for themajorityofplatforms, thetopside and substructure will be removed separately.

IncontrasttotheCNSandNNS/WofSregions,thenear-termforecasthaschangedsignificantlyintheSNSandIrishSeasincethe2014report.In2016and2017,thereisanincreaseasaresultofnewtopsideremovals,whereas,in2018and2019,therehasbeenadeclineassomeprojectsaredeferred.Theseshiftsinthenear-termcouldreflecttheshorterleadtimesforremovalintheseregions,allowingschedulestobechangedatshorternotice.Thisisduetothegenerallysmallerprojectsandlesschallengingconditions.

page 37

Thespreadofactivityacrossthetimeframeislessconsistentthanin2014,withpeakyearsofremovalactivityforecastin2017and2020(16and14NUIs,respectively).Oil&GasUKexpectsactivitytosmoothoutasforecastsarerevisited.Asseenlastyear,removalactivityisforecasttodeclinetowardstheendofthesurveytimeframe.Years with high numbers of removals often coincide with greater pipeline decommissioning activity seen in section7.4.

Someoftheplatformsincludedinthesurveymayrepresentkeyprocessinghubsfortheregion.TomeetgovernmentandindustryobjectivesofmaximisingeconomicrecoveryfromtheUKCS,itisimportantthatkeyinfrastructureisnotdecommissionedprematurely.Assuch,aSouthernNorthSeaPILOTRejuvenationWorkGroupwasestablishedtocarryoutajointindustryprojecttounderstandtheremainingreservesandresourcebaseinthisregionandtoidentifyhowbesttoprotectreservesandenablematurationintodevelopmentopportunities.Theworkaimstocreateablueprintofwhattheareawilllooklikeintenyears’timeandassesswhetherincentivesarerequiredtoextendtheregion’slife.ThenextphaseofworkwillbeledbytheOilandGasAuthority’sareamanagerfor the SNS.

Figure 18: Forecast Number of Topside Modules and Topside Weight to be Removed in the Southern North Sea and Irish Sea by Facility Type

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Topside removal 78,900 66 modules on 57 platforms £250 million

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7.3.2 Substructure Removal The removal method will depend on the type and weight of the substructure to be cut and lifted. ThesubstructurestoberemovedintheSNSandIrishSearegionsareshallowwaterjacketsthattypicallyweighlessthan2,000tonnesandareusuallydeployedinwaterdepthsof55metresorlesssotheymayuseasingle-liftremoval method.

Forlargerstructures(barge-launchedandsomeself-floaters),thejacketmaybecutintosmallersectionsin situ andremovedinsegments.Theabilitytocutlargeandoftencomplexsteelsectionsinanoffshoreenvironmentisoneofthekeychallengesduringthisstageofthedecommissioningprocess.ThesemorecomplexprojectsaretypicallylocatedintheCNSandNNS/WofSareas.In2009,theremovalofBP’sNorthWestHuttonjacketintheNNSregioninvolved248cutsusingthreedifferentmethods.Thedecommissioningsectorcontinuestoinnovateindevelopingexistingandnewcuttingtechnology.

Withinthesurveytimeframe,substructureremovalactivityintheCNSandNNS/WofSregionsisforecasttobeginin2018,peakingin2024(seeFigure19).Comparedtothe2014report,activityhasshiftedslightlylaterandtherehasalsobeenalargeincreasetowardstheendofthesurveytimeframe,withsubstructureremovalforecastforsixprojectsin2024.Between2018and2024,anaverageof15,000tonnesisanticipatedtoberemovedeachyear.

Substructure removal activity in the SNS and Irish Sea largelymirrors that seen for topside removal in theseregions,with2017and2020theyearsofgreatestactivity.Comparedtothe2014report,shiftsinprojectscheduleshavebroughtthepeakyearofactivityforwardfrom2020to2017.Between2016and2024,anaverageofjustover5,100tonnesisforecasttoberemovedeachyear.

Figure 19: Forecast for Substructure (Jacket) Weight Removal

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Substructure RemovalWeight (Tonnes)

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Central and Northern North Sea 105,100 £588 million

Southern North Sea and Irish Sea 46,200 £226 million

page 39

HistoricalVariationintheRemovalCostperTonneForecastsTheforecastsforaverageremovalcostspertonneintheCNSandNNS/WofSregionshaveincreasedslightlyonthosereportedin2014,asshowninFigure20.Therangeofcostspertonnehasalsowidened,particularlyforsubstructureremovalsduetothevariationinsubstructuretypesandweightsandplannedremovalmethods,withdataalsocomingfromthemanynewprojectsenteringthesurveythisyear.Whilethecostpertonneforecastsformanyprojectsliewithinasmallerrange,ahandfulcontributetothemuchlargerrange,primarilyduetotheirsize.Forprojectsintheearlyscopingphases,theremovalmethodmaynotyetbedeterminedasoperatorscarryoutcomparativeassessmentstodeterminethebestapproach.Asremovalmethodsbecomemoredefined,thiscanexplainchangesinthecostpertonneforecastsfromoneyeartothenext.

Figure 20: Historical Variation in the Removal Cost per Tonne Forecasts for Topsides and Substructures in the Central and Northern North Sea/West of Shetland

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Removal Cost per Tonne 2014 Average 2015 Average

Topsides £2,900 £3,300

Substructures £4,300 £4,800

AsillustratedinFigure21overleaf,theaverageforecastcostpertonnefortopsideremovalintheSNSandIrishSeaisslightlyhigherthaninpreviousyears.Forsubstructureremoval,theaveragecostpertonneandrangeofcostsintheSNSandIrishSeahavereducedcomparedtothelastthreeyears.Thechangescouldreflecttheshiftinprojects,asanumberofprojectshavebeendeferredoutsidethesurveytimeframewhilenewactivityhasalsoenteredthetimeframe.

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Theweightofaplatformwillhave litt leeffectonsomeof theexpenditureassociatedwithremoval, includingremovalpreparation,vesselmobilisation, sea-fastening, transportationand load-inonshore.Thiscan result inalargeraveragecostpertonneforecastfortopsideremovalforthesmallestandlighteststructurescommonlyfoundintheSNSandIrishSearegions,comparedtolargerstructuresintheCNSandNNS/WofSregions.However,thecostperplatformissignificantlylowerintheSNSandIrishSea.

The largerange incostspertonneforbothtopsideandsubstructureremovalseen intheSNSandIrishSea isprimarilyduetothevaryingapproachestoplatformremovals.Wherepossible,decommissioningiscarriedoutinbatchesorcampaignstomaximiseefficiencygainsandreducecosts.IntheSNSandIrishSea,severaloperatorsplan to removemultipleplatforms inone campaign, allowingmobilisationandotherfixed costs tobe spreadacrossthestructuresbeingremoved.Projectsatthebottomoftherangearetypicallythoseincludedinabatchedapproach,whilethoseatthetopoftherangearetypicallyplannedasindividualremovals.

Figure 21: Historical Variati on in the Removal Cost per Tonne Forecasts for Topsides and Substructures in the Southern North Sea and Irish Sea

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Removal Cost per Tonne 2014 Average 2015 Average

Topsides £4,000 £4,600

Substructures £4,500 £4,400

page 41

7.3.3SubseaInfrastructureDecommissioningMattressesareconcretestructuresusuallyusedtoprotectorsupportsubseapipelines.Mattressdecommissioningtypicallyinvolvesrecoveryfromtheseabed.Thisisadiverandvessel-intensiveoperation,withdurationoftheworkdependantonthemattressageandcondition.Insomecaseswherethemattressesarebadlydegraded,approvalmaybesoughtfromtheDepartmentofEnergy&ClimateChangetodecommissionthemattressesin situ.

Other subsea infrastructure includesmanifolds, Christmas trees, risers, spools, jumpers, anchors and subseaisolationvalves,whichareremovedaspartofthedecommissioningprogramme.

Central and Northern North Sea/West of ShetlandOverthenextdecade,over6,000mattressesareforecasttobedecommissionedintheseregions(seeFigure22overleaf),doubletheforecastinthe2014report.Aroundhalfofthisincreaseisduetonewprojects,whiletheremaindercomes frommoredetailedactivity forecasts forexistingprojects.Thenumberofmattresses tobedecommissionedwasintroducedintothesurveytemplateinrecentyears,explainingtheimprovedgranularityofforecastsbetweensurveys.

Theforecasttonnageofothersubseainfrastructuretoberemovedhasincreasedbyover26,000tonnessincethe2014reportto80,200tonnes.Themajorityofthisincreaseisfromnewprojects.

Thedecommissioningofmattressesandother subsea infrastructure is typically carriedout simultaneously sotheseactivitiesarecloselyaligned.Inthenearterm,forecastsareinlinewiththoseseenlastyear,with2015ayearofhighactivityfollowedbylimitedornoactivityinthesubsequentyears.Activityisforecasttobehighin2018,althoughthemajorityofactivitycomespost2020,peakingin2024.

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Figure 22: Forecast for Mattress and other Subsea Infrastructure Decommissioning in the Central and Northern North Sea/West of Shetland

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Mattresses 6,100 -

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page 43

Southern North Sea and Irish SeaMattressdecommissioning in theseareas isanticipated tobeconcentratedbetween2016and2023,with thegreatestactivityin2017and2020(seeFigure23overleaf).ThenumberofmattressestobedecommissionedintheSNSandIrishSeahasincreasedslightlysincethe2014reportto3,300becauseoftheimprovedgranularityinactivityforecasts.Theprojectsdeferredoutsideofthetimeframeintheseregionshavelittleforecastactivityinthis area and so limited impact on the total to be removed.

Removalofothersubseainfrastructureisforecasttopeakin2016.ThetotalamountofsubseainfrastructuretoberemovedintheSNSandIrishSeahasincreasedby700tonnesto2,200,althoughitremainssubstantiallylowerthanintheCNSandNNS/WofSregions.Theincreaseisduetonewprojectsandmoredetailedactivityforecastsforexistingprojects.

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Figure 23: Forecast for Mattress and other Subsea Infrastructure Decommissioning in the Southern North Sea and Irish Sea

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Mattresses and subsea infrastructure

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Mattresses 3,300 -

Subsea infrastructure 2,200 tonnes -

page 45

7.4 Pipeline DecommissioningThepipeline network in theNorth Sea is in excess of 45,000 kilometres and is used to deliver hydrocarbonsto receiving facilities and end-users across Europe. This transportation network is of vital importance whenthe economics of field-life extension projects and future development opportunities are being assessed andit is therefore essential that major pipelines are not decommissioned prematurely. The deferral of pipelinedecommissioningtotheendoffieldlife,orforpossiblereuse,issometimescarriedoutundertheInterimPipelineRegime, whereby the regulatormay request that the pipeline owner carries out ‘making safe’ activities andmaintainsthepipelineforpossiblefuturereuse.

PipelinesontheUKCSincluderigidpipelinesandflexibleflowlines.Theirdiameterscanvarybetweentwoand44inches.Optionsfordecommissioningincludefullremoval,decommissioningin situ,trenchingandburial.Theapproachadoptedwillbebasedoncomparativeassessmentsofthedifferentoptionsandanumberoffactors,including safety, environmental, technical feasibility, other sea users and cost. All decisions are made on a case-by-casebasisinconsultationwithkeystakeholdersandwithregulatoryapproval.

7.4.1 CentralandNorthernNorthSea/WestofShetlandThenumberandlengthofpipelinestobedecommissionedintheseregionsoverthenextdecadehasincreasedsincethe2014reportbyover1,300to2,190kilometres.Eightypercentoftheriseisbecauseofnewprojectsandtheremainderisduetomoredetailedactivityforecastsforexistingprojects.Thelargestincreaseisinthe‘otherpipelines’category,whichisdefinedaspipelineswithadiameterlessthan16inchesandincludestie-backs,shortflowlinesandbundles.

Theaveragelengthofpipelinetobedecommissionedoverthenextdecadeislessthanfourkilometresanditisdeemedthatnomajortransportlinesareforecasttobedecommissionedintheseregions.

Pipeline decommissioning is closely aligned to pipeline ‘making safe’ (see section 7.2), as these activities aretypicallycarriedoutsequentially(seeFigure24overleaf).Activityisforecasttoincreaseyear-on-yearfrom2017to2019andwillpeakin2021.Oil&GasUKexpectsthatactivitywillsmoothoutasforecastsarerevisited.

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Figure 24: Forecast of Pipeline Decommissioning Acti vity in the Central and Northern North Sea/West of Shetland

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Pipeline decommissioning

2,190 £812 million

Umbilicals 178 465

Trunklines 17 351

Other pipelines 403 1,374

2021 214 590

Peak year of pipeline decommissioning activity

page 47

7.4.2 Southern North Sea and Irish SeaTheforecastforpipelinedecommissioningintheseregionshasincreasedbynearly1,000to3,430kilometressincethe2014report,primarilybecauseofmoredetailedforecastsforexistingprojects.

Thespreadofactivityisforecasttoberelativelyhighacrossthedecade,asillustratedinFigure25,althoughitisnotevenlydistributed.Highactivityisforecastin2020and2024andOil&GasUKwouldexpectthistosmoothout.Thisreflectsoperators’currentbestestimatesandarenotsanctioneddecommissioningprogrammes;acompletelistofwhichcanbefoundonDECC’sProjectPathfinderwebsite18.

TheSNSPILOTRejuvenationWorkGroupislookingtomaximiserecoveryofreservesintheregionandthereisongoingindustrydiscussionabouttheproposeddecommissioningofsomecriticalinfrastructure.

Figure 25: Forecast of Pipeline Decommissioning Activity in the Southern North Sea and Irish Sea

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3,430 £118 million

Umbilicals 44 350Trunklines 19 930Other pipelines 116 2,150

2020 46 680

Peak year of pipeline decommissioning activity

18TheDECCPathfinderwebsitecanbeviewedathttps://itportal.decc.gov.uk/pathfinder/decommissioningindex.html

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page 48

7.5 Onshore Recycling and DisposalTopsideandsubstructure recyclinganddisposal includesactivityandexpenditure related toonshorecleaningandhandlingofhazardouswaste,deconstruction,reuse,recycling,disposal,andwastemanagementaccounting.Operatorshaveadutyofcaretomanageandmonitorallwastesgeneratedoffshoreandtheirsubsequenthandlingand disposal through an environmental management system.

Thepreferredoptionstodealwithdisusedoffshorestructuresfollowthewastehierarchyofreuse;recycling;andonshoredisposal.Oncethestructuresarebroughtonshore,dismantlingandprocessingishandledbyspecialistlicensed sites.

Reuseisdefinedasanyactivitythatlengthensanitem’slifecyclewhilestillbeingusedforitsoriginalpurpose.Thiscanoftenbeconfusedwithrecycling,whichisthereprocessingofanitemintoanewrawmaterial.Althoughmorechallenging,reuseoftenprovestobeparticularlycostefficientandcanhelptoaddressthechallengeofwastedisposal.Thedecisiontoreuse,recycleordisposetolandfillcanoftenbedrivenbyanumberofcommonfactors,includingtheamountofmaintenancerequired,ortheprevalenceofobsoletetechnologyandtheamountofhazardousmaterialonanasset.

Topsidesaremadefromavarietyofmaterialsandsafedismantlingandwastemanagementofthesestructurescanposeagreaterchallengethanthemanagementofsubstructures,whicharepredominantlymadeofsteelandcanbeprocessedandrecycled.Recentdecommissioningprojectsdemonstratehighlevelsofreuseandrecyclingat95percentofallrecoveredmaterials.Hessdetailsareuseandrecyclingpercentageof96.93percentintheclose-outreportfortheFife,Fergus,FloraandAngusfieldsdecommissioningprogramme,withareuserateof48.21 per cent19.

Between2015and2024,nearly620,000tonnesofmaterialisforecasttocomeonshore,80percentofwhichiscomingfromtheCNSandNNS/WofSareas.Thisincludestonnagefromtopsides,substructuresandothersubseainfrastructure.

Fourprojectsreportnegativespendforonshorerecyclingasthemoneyreceivedformaterialscan,insomecases,outweigh the associated costs.

19Seewww.hess.com/docs/default-source/sustainability/fffa-close-out-report.pdf?sfvrsn=2

http://www.hess.com/docs/default-source/sustainability/fffa-close-out-report.pdf?sfvrsn=2

page 49

7.5.1 CentralandNorthernNorthSea/WestofShetlandBetween2015and2024,492,200tonnesareforecasttocomeonshorefromtheseregions,anincreaseofover130,000tonnesonthe2014report.Aroundtwo-thirdsofthisisduetonewprojectsandtheremaindercomesfrommoredetailedforecastsforexistingprojects.

Inlinewithtopsideandsubstructureremoval,onshorerecyclinganddisposalisforecasttotakeplaceacrossthedecade(seeFigure26).Therearehighactivitylevelslaterinthetimeframe,withapeakin2023atnearly95,000tonnes.Theannualaverageoverthenextdecadeis50,000tonnes.

Figure 26: Forecast of Tonnage Coming Onshore for Recycling and Disposal in the Central and Northern North Sea/West of Shetland

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Onshore recycling and disposal 492,200 £137 million

Topsides 288,000

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7.5.2 Southern North Sea and Irish SeaBetween2015and2024,127,300tonnesareforecasttocomeonshorefromtheseregions,adecreasebyover65,000tonnesonthe2014reportasprojectsaredeferredandshiftoutsidethesurveytimeframe.

Thepeakyearforonshorerecyclinganddisposalofmaterialfromtheseareasis2017(33,221tonnes),inlinewiththepeaksintopsideandsubstructureremoval.Therearealsohighactivity levelsforecast later inthedecade,againcorrespondingtoremovalsactivity.

Figure 27: Forecast of Tonnage Coming Onshore for Recycling and Disposal in the Southern North Sea and Irish Sea

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Onshore recycling and disposal 127,300 £38 million

Topsides 78,900

Substructure 46,200

Subsea infrastructure 2,200

page 51

7.6 SiteRemediationandMonitoringSiteremediationactivitiesincludecuttingspilesmanagement,oilfielddebrisclearance(witha500-metrezoneand200-metrepipelinecorridor)andover-trawlsurveys.Over-trawlsurveysensurethattheseabedcanbedeemedclearforresumingnormalfishingactivities.

Nearly£280million is forecasttobespentonsiteremediationoverthenextdecade,with98percentofthisconcentratedintheCNSandNNS/WofSregions.

Monitoring is the final stage in the decommissioning process. Operators are required to carry out post-decommissioning surveys andmonitor the site beyondphysical decommissioning. The specific details of theprogrammeareagreedwiththeregulatoronaproject-by-projectbasis.

Expenditureonmonitoring is forecast at £32millionbetween2015and2024. Eighty-eightper centof this isforecasttobespentintheCNSandNNS/WofSareas.Theexpenditureforecasthasnotincreasedsincethe2014survey,despitenewprojectsbeing included.This isbecauseanumberofprojectsarecompletedoutside thesurveytimeframe.Ifthespendattributedtotheseprojectsisincludedinthetotalforecastexpenditure,thetotalspendonsiteremediationwouldnearlydoubleandtheexpenditureonmonitoringwouldtriple.However,overall,thisisafractionofthetotalcosttodecommissionafield.

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8. AppendicesA. Work Breakdown Structure and Survey MethodologyOperatorswereaskedtoprovideexpenditureforecastsforthe20differentcomponentsoftheWorkBreakdownStructure outlined in Oil & Gas UK’s Decommissioning Cost Estimation Guidelines20. They were also asked to quantifyphysicaldecommissioningactivitybycomponents,suchasthetonnesoftopsidetoberemovedorthelengthofpipelinetobemadesafe.

The Decommissioning Insight report has been produced annually since 2011. Although it is possible to compare data across the reports, it is important tonote that since2013 surveyshavebeenmodelledon anewWorkBreakdownStructure.Historicalanalysishasthereforeonlybeencarriedoutoncomparablecategories.

Figure 28: Work Breakdown Structure Categories

Operator project management Activities include project management core team, stakeholder engagement, studies to support decommissioning programme and scope definition/method development, decommissioning programme preparation and decommissioning programme reporting/close-out (admiralty charts, fish safe etc.).

Facility running/owner costs Activities include logistics (aviation and marine), operations team, deck crew, power generation, platform services, integrity management (inspection and maintenance) and operations specialist services e.g. waste management.

Well plugging and abandonment Activities include rig upgrades, studies to support well programmes, well suspension (spread rate/duration), wells project management, operations support, specialist services e.g. wireline, conductor recovery, cleaning and recycling, vessel.

Facilities/pipelines making safe Activities include operations (drain, flush, purge and vent), physical isolation (de-energise, vent and drain), cleaning, pipeline pigging and waste management.

Topsides preparation Activities include engineering-up of temporary utilities (power, air and water), module process/utilities separation, dropped object surveys and subsequent remedial actions.

Topsides removal Activities include removal preparation (reinforcements and structural separation for removal), vessel operations, sea-fastening, transportation and load-in.

Substructure removal Activities include removal preparation, removal, vessel, sea-fastening, transportation and load-in.

Topsides and substructure onshore recycling

Activities include cleaning and handling hazardous waste, deconstruction, re-use, recycling, disposal and waste management accounting (traceability of all streams).

Subsea infrastructure (pipelines, umbilicals)

Activities include vessel preparation for subsea end-state (remove, trench, rock-dump), sea fastening and transportation, load-in, subsea project management and waste management accounting (traceability of all streams).

Site remediation Activities include cuttings pile management, oil field debris clearance (500 metre zone and 200 metre pipeline corridor) and over-trawl surveys.

Monitoring Activities include navigation aids maintenance and monitoring programme for any facilities that remain.

STAGES - LEVEL 1

20 The Decommissioning Cost Estimation Guidelines areavailabletodownloadathttp://bit.ly/1K5Rhzs

http://bit.ly/1K5Rhzs

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B.AssociationfortheAdvancementofCostEngineeringClassificationsThefiveestimateclasses intheAACECostEstimationClassificationMatrixaredeterminedby levelof ‘projectdefinition’withconsiderationtoasetofsecondarycharacteristics.

Primary Characteristic

Estimate Class

Level of Project Definition (expressed as % of complete definition)

End Usage Typical Purpose of Estimate

Methodology Typical Estimating Method

Expected Accuracy Range Typical Variation in Low and High Range

Class 5 0% to 2% Concept screening

Capacity factored, parametric models, judgement or analogy

L: -20% to -50%H: +30% to +100%

Class 4 1% to 5% Study or feasibilityEquipment factored or parametric models

L: -15% to -30%H: +20% to +50%

Class 3 10% to 40%Budget authorisation or control

Semi-detailed unit costs with assembly level line items

L: -10% to -20%H: +10% to +30%

Class 2 30% to 70%Control or bid/tender

Detailed unit costs with forced detailed take off

L: -5% to -15%H: +5% to +20%

Class 1 50% to 100%Check estimate or bid/tender

Detailed unit cost with detailed take off

L: -3% to -10%H: +3% to +15%

Secondary Characteristic

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9. Glossary

AACE AssociationfortheAdvancementofCostEngineeringBarge-launchedjacket Barge-launchedjacketsweighbetween5,000and25,000tonnes.Theyareyard

fabricatedandtransportedhorizontallytothefieldonatransportationbarge,thenlaunchedfromthebargeoverrockerbeamsandupendedthroughcontrolledflooding.Finalpositioningmayrequirecraneassistance.

Casing Pipeinstalledinthewellboretoretaintheboreholedimensionandsealoffhydrocarbonandwater-bearingformations.Casingisusuallycementedinplacetoensurethepiperemainsinplace.Theformationbehindthepiperemainsintactandflowdoesnotoccurintheannulusbetweenthecasingandtheformations.

Christmas tree Thevalvesandfittingsassembledatthetopofacompletedwelltoprovidetheabilitytoopenandcloseaccesstotheproductiontubingandtheannulibetweenthe tubing and casing strings and the annuli between casing strings.

CNS Central North SeaCoiled tubing Along,continuouslengthofpipewoundonaspool.Thepipeisstraightenedprior

to pushing into a wellbore and rewound to coil the pipe back onto the transport and storage spool.

CoP CessationofProductionConductor Alargediameterpipeextendingupwardsfromorbeneaththeseafloortothetop

ofthewellontheplatform.Thepurposeoftheconductoristoactasaguidefordrillingthewellandaprotectivebarrierfromtheelementsforthewellcasingsandtubingduringthelifeofthewell.

Cuttingspiles Cuttingsareformationfragmentscreatedbythedrillbitinthewellandbroughttothesurfaceinthedrillingfluid.Thesecuttingsareremovedfromthe drillingfluidatthesurfaceandinsomecasesaredischargedoverboard.Thecuttingssometimesaccumulateintocuttingspilesaroundthefootingsoftheinstalledjackets.

DECC DepartmentofEnergy&ClimateChangeDecommissioning in situ Leavinginfrastructureinplaceandcarryingoutappropriateworktoensure

that there is minimal risk to other sea users or the marine environment. This couldapplytoanyinstalledfacilitiesontheseabed,suchaspipelines,manifolds,pipelinecrossingsandthefootingsoflargerjackets.

E&A Wells ExplorationandAppraisalWellsFlexibleflowlines Flexibleflowlinesusuallytransporthydrocarbonsbetweensubseainfrastructure

andthehostplatformorvessel.Theyaremanufacturedfromcompositelayersofsteelwireandpolymersheathingthatprovideprotectionandflexibilityto theflowline.

FPSO Floating,production,storageandoffloadingvessel–afloatingvesselusedbytheoffshoreoilandgasindustryfortheprocessingofhydrocarbons,storageofoilandtheoffloadingoftheoileithertoatankerorintoapipeline.

HMT HM TreasuryHydraulic workover unit Remedialworkcarriedoutinawellusingamastpoweredbyhydraulicfluid.

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Intervention Wellservicingoperationsconductedwithinacompletedwellboretorestoreorimproveproductionorinjection.

Jumper Ashortsegmentofflexiblepipewithaconnectorhalfateitherend.Ajumperiscommonlyusedtoconnectflowlinesand/orsubseafacilitiestogether.

Lift-installedjackets Thesestructuresweighlessthan10,000tonnesandareyardfabricatedbeforebeingtransportedhorizontallyorverticallyonabargetothefield.Onceatthefield,thejacketisliftedfromthebargeintopositionusingasuitablecranevessel.

Manifold Amanifoldinthecontextofoilandgasproductionisapipetowhichwellsareconnectedinordertocollect,co-mingleanddirectfluidflowfrommorethanonewell.Suchaninstallationcanbeonaplatformorontheseabedforaccumulatingseveralsubseawells.Manifoldscanbeusedforthedistributionoffluidsforinjectionintoaseriesofwells.

Mattresses Mattressesareoftenusedtoprovideprotection,forstabilisation,andascrossoversupportforpipelines.Thesecompriseflexibleblockslinkedwithropeorwire,orconcreteformsorgroutbagsfilledwithcement.

Milling A mill or similar downhole tool is used to remove casing in the well where a barrierneedstobeinstalledinthecaseofpressureorpotentialmovementofhydrocarbonsbehindthecasing.Theobjectiveistopreventfluidsflowingintoanotherformationortosurface.

NNS Northern North SeaNUI NormallyUnmannedInstallationOGA Oil and Gas AuthorityProductionpacker Adeviceinstalledinawell,usedtoisolatetheannulusandanchororsecurethe

bottomoftheproductiontubingstring.Rigid pipelines Rigidpipelinesaremanufacturedfromcarbonsteelorahighperformancesteel

alloy,withadditionalcoatingsprovidingcorrosionprotection,stabilisationor,insomecases,insulation.Rigidpipelinestransporthydrocarbonsbetweensubseainfrastructureandplatformsandtoshore.

Risers Theportionofapipelineextendingfromtheseafloortothesurfaceistermedariser.Thefunctionofariseristoprovideconduit(s)fortheconveyingofproducedfluidsand/orinjectionfluidsbetweentheseafloorequipmentandtheproductionhost.Suchrisersaregenerallyknownasproductionrisersinordertodistinguishthemfromothertypesofriserssuchasmarinedrillingrisersandcompletion/workover risers.

Satelliteinstallations Small,unmannedplatformsconsistingofminimalfacilities(wells,manifolds,andperhapsminimalseparationandortestingfacilities).Theseinstallationsaredesignedtooperateinconjunctionwithahostfixedproductionplatformtoprovidefurtherprocessingandonwardtransportationoffluids.

Sea-fastening Thesecuringofcargotoavesselsothatmovementduringtransportationdoesnot cause damage.

Self-floaters Thesesteeljacketstructuresweighinexcessof12,000tonnesandaredesignedwithtwolargediameterlegsforbuoyancyduringinstallation.Thejacketisfabricatedinaconstructionyard,floatedhorizontallytothefieldusingthestructure’sinherentbuoyancy,andthenupendedthroughcontrolledflooding.Finalpositioningmayrequirecraneassistance.

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Shallowwaterjackets Thesestructuresusuallyweighlessthan2,000tonnesandaretypically deployedinwaterdepthsof55metresorless.Theyincludesmallerlaunched andlift-installedjackets,aswellasminimumfacilitiesplatforms.

SNS Southern North SeaSpool Shortsegmentofrigidpipewithaconnectorhalfateitherend.Aspoolis

commonlyusedtoconnectflowlinesand/orsubseafacilitiestogether, e.g.asubseatreetoasubseamanifold.Onplatforms,spoolsareusedtoconnectpre-installedpipingwherefinalconnectionisperformedoffshore.

Subseaisolationvalves Inrelationtowellsthesemaybereferredtoasasubsurfacesafetyvalve(SSSV).Thisisasafetydeviceinstalledintheupperwellboretoprovideemergencyisolationoftheproducingfluidsintheeventofanemergency.Twotypesofsubseaisolationvalvesareavailable:surface-controlledandsubsurfacecontrolled.Ineachcase,thesafetyvalvesystemisdesignedtobefail-safe,sothatthewellboreisisolatedintheeventofanysystemfailureordamagetothesurfaceproduction-controlfacilities.Insubseafacilities,isolationvalvesareincludedintheseabedmanifoldtoisolatewellsandpipingtoprotectfacilitiesintheeventofanemergencyorroutineneedtopreventfluidflow.

Subseatie-back Subseatie-backsusuallyconnectsmallreservoiraccumulations,developedusingsubseatreesandmanifolds,backtoahostplatformforonwardprocessingand ortransportation.

Tubing Usuallyreferredtoasproduction(orinjection)tubing.Thisisapipeinsertedinthewelltocarryandcontaintheproduction(orinjection)fromthereservoirtothesurface.

UKCS UKContinentalShelfWell scale decontamination

Theremovalanddecontaminationofscalebuild-upthatdepositsinthetubingofawellduringproductionofreservoirfluids.

Well P&A Well Plugging and Abandonment Wellhead Thewellheadistheterminationpointwherethecasingstringsinthewellare

supported and provide pressure containment. Wireline Aformofwellinterventionthatusesanelectricalcabletolowertoolsintothe

boreholeandtotransmitdatatothesurface.WofS WestofShetland

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