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NEWS
It is generally recognised that collaboration is going to play an increasingly important role in the decommissioning sector over the comingdecades. It is therefore entirely appropriate that Decom North Sea shouldpractice what it preaches!
Decom North Sea is facilitatingthe industry discussion on thecontracting strategies and models used to manage major,complex decommissioning projects. In support of this initiative we teamed up with TheRobert Gordon University (RGU)and Accenture in a project designed to provide fresh, independent and unbiased research, analysis and thinkingon this somewhat, sensitiveissue.
Our partnership was set up as follows. Decom North Sea articulated the general industry situation relating to decommissioning contracting strategies, and withinput from Chris Gray of ConocoPhillips we set the strategic ambition for the research. A team of eight oil & gas MBA students at RGU undertook research witha range of operators, major contractors and service specialists, followed by a thorough analysis of the data obtained. On Tuesday 7th September the team presented their findings to an audience of nearly 50 people, most of whom areDecom North Sea members. Accenture provided sponsorship for the whole project,supported the students by coaching throughout the course of the twelve week project, and kindly agreed to share the findings of the study with Decom North Seamembers. A good example of a win-win-win.
Taking account of the strategic drivers (see Fig. 1) which influence which contracting strategy and model is most appropriate, the students analysed the various contracting strategies (In house, Tier 1, Heavy lift, Project management andcollaboration) against operator and contractor value drivers. They then comparedthis with the traditional contracting models of Lump Sum and Cost Plus and suggested alternative contracting models which could meet both operator and contractor value drivers.
The presentation by the students at the September workshop was excellent, andattracted very complimentary remarks from the industry professionals in attendance. The project has provided Decom North Sea with a valuable perspectivethat is recognised as being independently researched and analysed, and whichmakes some realistic recommendations on possible future development of industry models. These recommendations will now be discussed and debated atthe October decommissioning conference in Dunblane, which in turn could possibly lead to the identification of a model that could be worked up by industryexperts for adoption on future projects and programmes.
Issue No. 2 October 2010 www.decomnorthsea.com
Offshore Oil & Gas Decommissioning – Contracting Strategies
Contents
page 2
Director’s foreword
Membership of Decom North Sea
Decomnorthsea.com
Future newsletters
page 3
New Directors Elected at AGM
page 4
Strong turn out for first members’
event
page 5
Forthcoming DNS events and
exhibitions
pages 6 and 7
Members News:
Proserv Offshore, CSL, People=Positive
and DSL
page 8
Member Listing
Fig. 1
Seven new directors from across all sectors of the decommissioning industry were elected onto the board of Decom NorthSea at the first annual general meeting, held in Aberdeen on September 14.
The meeting heard that Decom North Sea now has 82 members and has revised the target number by the end of the year from 70members to 100.
Chairman Murdo MacIver, director of Peterson SBS, opened the agm and thanked directors and members for their time and supportand urged other companies to join the body to ensure the UK supply chain benefits from the £25-30billion worth of decommissioning work forecast for the North Sea over the coming decades.
Brian Nixon, Decom North Sea’s chief executive, said in his report at the meeting: “We are delighted that the members cover allsizes of companies and represent the breadth of the supply chain. At the moment, membership is a bit skewed in favour of Scotland- which is really to be expected because of where clusters of companies are located - but we have had encouraging interest from England and the Continent.
“We have been overwhelmed by the reception we have had from industry and believe we are well on track to reach 200 membersby the end of 2011 and that will make us genuinely representative of the supply chain.’’
Mr Nixon also gave details of the supply chain matrix being created by Decom North Sea at present. The online facility allows operators and major contractors to access in-depth profiles of member companies providing specific decommissioning services,their skills, capabilities and track-records.
“This will help suppliers to promote themselves to operators and major sub-contractors that might not be aware of them and might evenhelp avoid the need for the pre-qualification stage,’’ he said.
New directors are BP decommissioning vice-president Gunther Newcombe, Halliburton director and country manager for projectmanagement services Tom Leeson, Marine Subsea managing director Alasdair Cowie, AMEC’s head of decommissioning Roy Aspden, BIS Salamis (M&I) operations director Nigel Lees, Proserv Offshore vice-president group business development David Dent and Eddie Grant, managing director of Bluegrass Decommissioning Services
They join existing directors Mr MacIver, Alex West, of Wood Group, Bill Yuile, of PSN, Donald Michie, of Asco, Kare Kristing, of DesignAlpha, Mark Stanley, of Veolia Environmental Services, and Simon Coles, of Babcock International Group.
New Directors Elected at AGM
Decom North Sea News page 3
As you may be aware, in the last two months since the first Decom NorthSea newsletter we have increased our membership to over 80 membercompanies and the events programme for 2010 is well underway.
We held our first event for members at the Marcliffe hotel in Aberdeen wherearound 100 members attended to hear about BP’s North Sea decommissioning plans, our first annual general meeting saw the electionof seven new directors and the first offshore decommissioning conferencewas held in Dunblane, Scotland.
It is very encouraging to see growing interest in Decom North Sea from awide range of oil and gas supply chain companies across the UK and Europeas we continue to build a complete picture of North Sea decommissioningactivity through the supply chain matrix and with new contracting models.We are also looking to strengthen the link between operators and supplychain companies to provide our members with the information and knowledge that they need to capitalise on future business opportunities decommissioning presents and to be able to demonstrate to Government,regulators and taxpayers that we are doing all we can to build UK capabilityand meet decommissioning obligations in an efficient way.
It is our priority to create a vibrant, competent and competitive North Sea decommissioning supply chain – with your ongoing support and commitment to Decom North Sea we are confident that together we willachieve this.
My role as a director of DecomNorth Sea is to speak to members in order to ensurethat we are offering the bestpossible support to allmember companies and truly representing your interestsand issues in the activities we undertake. This is a very important task as it is vital thatwe at Decom North Sea understand your needs and fulfil your membership aspirations. I am looking forward very much tomeeting you all over the nextfew months.
We welcome contributions from our members for future newslettersso please send your news and photos [email protected] We hope by sharing your experiences and successes in the decommissioning sector with fellow members and the wider decommissioning industry, further useful connections will be made.
Director’s foreword
Future newsletters
page 2 Decom North Sea News
Full membership of Decom North Sea is opento any commercial organisation involved withdecommissioning. Associate membership isopen to non-commercial organisations andindividuals who wish to be kept informed ofDecom North Sea activity and attend networkingevents and conferences.
Benefits of joining Decom North Sea include,amongst others, :
• Access to operators and major contractors to understand their future decommissioning plans and supply chain needs
• Opportunity to present and promote your company at Decom North Sea events
• Access to market intelligence reports and business opportunities
• Opportunity to participate in specialist working groups e.g. (a) to look at the various contracting
strategies for decommissioning; (b) packaging of decommissioning projects
• Discounted rate for Decom North Sea events
More information on member benefits and how toapply to join Decom North Sea can be found atwww.decomnorthsea.com
Membership of
Decom North Sea
Alex WestWood Group
Decom North Sea News page 5
Pilot Share Fair 12, Aberdeen, 3rd November
PILOT Share Fair 12 provides the chance to be among the first to hear about the latest UK oil and gas business development opportunities from the major oil and gas players, both from the operator and contractor communities, who will unveil their 18 monthforward plans for projects in the UKCS at the event.
Decom North Sea will be exhibiting at the Pilot Share Fair and would be pleased to discuss Decom North Sea in more detail with potential new members and catch up with current members.
To find out more about the Pilot Share Fair and to register to attend go tohttp://www.oilandgasuk.co.uk/events/pilot_share_fair.cfm
Decom North Sea and NOF Energy Networking event, Durham, 11th November
Decom North Sea and NOF Energy are holding a decommissioning themed networking lunch. This will include an update on Decom North Sea as well as a presentation from Jim Niven, Stakeholder Manager,Shell on Shell’s decommissioning plans and timescales; contracting strategies; supply chain engagement andany issues they are facing. This event is open to both members and non-members of Decom North Sea andNOF Energy. For more information and to register for this event, contact [email protected]
DecomWorld 7th Annual North Sea Decommissioning Conference, Aberdeen, 16th & 17th November
This conference is set to tackle the key issues which are at the heart of the North Sea Decommissioning Industry.Decom North Sea will be presenting on the ‘Strategy for Supply Chain Mobilisation’.For more information and to book your place visit http://www.eyeforenergy.com/nsd/index.shtml
Oil and Gas Supply chain Management Conference, London, 29th & 30th November
SMi’s forthcoming Oil and Gas Supply Chain Management conference will address challenges, innovation, solutions and lessonslearned, as influential players from the oil and gas landscape come together to understand how to generate value, create efficiencyand improve productivity.
Decom North Sea are presenting at the conference on ‘Decommissioning Supply Chain Development’.
For more information and to book your place visit www.smi-online.co.uk/supplychain17.aspDecom North Sea members are eligible for a 25% discount off the delegate rate, please contact Andrew Gibbons on +44 (0) 20 7827 6156 to receive the discount.
Decom North Sea and The EIC Networking Event, London, 24th January
Decom North Sea and The EIC are holding a decommissioning themed networking event. This will include an update on Decom North Sea as well as a presentation from Jim Niven, Stakeholder Manager, Shell on Shell’s decommissioning plans and timescales; contracting strategies; supply chain engagement and any issues they are facing. This event is open to both members and non-members of Decom North Sea and The EIC. For more information and to register for this event, contact [email protected]
Forthcoming DNS events and exhibitions
Future Decom North Sea member’s only eventsDecom North Sea is currently in discussions with a couple of operators regarding presenting their decommissioningplans, strategies and issues and is looking at setting dates for these in early 2011 – information regarding these eventswill be circulated to members of Decom North Sea over the next few months.
Decom North Sea is also keen to hear from other operators and major contractors who are willing to share their decommissioning plans, strategies and issues and would be interested in hosting an event for Decom North Sea members. To discuss this opportunity in more detail please contact Sarah Hillyear on 01224 224131 or [email protected]
page 4 Decom North Sea News
More than 100 senior industry figures gathered in Aberdeen to hear first hand about BP’s decommissioning activities atDecom North Sea’s first event for its members.
Gunther Newcombe, BP vice-president of Decommissioning, addressed attendees at the member-only event which was held at theMarcliffe Hotel and Spa.
BP has already successfully completed the removal of North West Hutton, the first of the large fixed steel jacket installations to bedecommissioned in the North Sea and is currently progressing decommissioning for the Miller and Don Fields. Gunther shared withthe audience BPs plans for these two decommissioning projects, their contracting strategies and how the supply chain can engagewith BP in relation to decommissioning.
DNS Chief Executive Brian Nixon said: “We were delighted so many of our members benefitted from an excellent opportunity tohear directly from BP about the work they are planning in the North Sea, as well as from the fantastic networking platform.’’
“Feedback from this event was excellent and Decom North Sea are currently developing a series of similar events”.
Strong turn-out for first members’ event
Decom North Sea News page 7
DSL Announce Decommissioning Work for Talisman
New Decom North Sea member Derrick Services (UK) Ltd (DSL)is currently working on the Talisman Auk decommissioningproject.
The contract involves removing the drilling derrick and substructure and, using approximately a dozen multi-disciplined and OPITO qualified staff, DSL is currently halfwaythrough the six-month contract.
Mike Smith, Managing Director at DSL, said: “The Talisman Aukproject is the latest in a successful track record of drilling package decommissioning on platforms both in the North Seaand overseas by DSL. It further confirms our ability to support thedecommissioning of oil and gas facilities.”
DSL is one of only a few companies that offer the provision ofderrick decommissioning work with a floating ginpole and thishas been utilised for the Talisman Auk project.
The floating ginpole is a specialist piece of equipment that isideal for derrick erection, decommissioning or modification. Itis a very cost-effective alternative when the use of barge cranesis not possible or is too expensive, allowing dismantling of thederrick piece by piece on site.
Overseas, DSL has most recently worked on the decommissioning of CTF Rig 05 offshore Tunisia, followed bythe upgrade and modification of this rig to be installed ontoanother installation, which DSL then project managed and provided onsite expertise for.
DSL is an industry leader supporting drilling contractors andoperators worldwide and is the UK’s only API 4F licensed company for the design and manufacturing of drilling structures.
DSL is committed to providing a diverse range of services andinnovative solutions to the oil and gas industry. These includederrick inspection, drilling package decommissioning, derrickassembly and outfitting, rope access trades personnel, in-house engineering, design, fabrication and procurement.
The company employs over 100 staff and has UK offices in Aberdeen and Great Yarmouth, as well as worldwide in UAE,Singapore and Brazil, and reported a turnover of £15million in2009.
CSL Launches Decommissioning IntroductionCourse
With more than 800 facilities in the North Sea alone that willeventually require decommissioning, demand for knowledgein this area is on the increase.
To meet this demand, CSL has developed a one-day Decommissioning Introduction course designed to providemanagers, engineers and non-technical personnel with anoverview of the process involved in decommissioning offshoreoil and gas installations, with a focus on the environmental,safety and financial issues.
“These issues are of critical importance to CSL when undertakingdecommissioning projects and it’s important that people have access to the relevant knowledge and information”, says NeilKnowles, CSL Managing Director.“By demonstrating the challenges and lessons learned from pastdecommissioning experiences, it provides delegates with an understanding of the decommissioning process from a real-lifeperspective, which I believe is invaluable.”
The course provides delegates with an understanding of thedecision-making, planning, and implementation processes associated with decommissioning offshore oil and gas installations.
For course dates, locations and booking: email [email protected] tel +44(0) 1224 285566
Flawless Exit
For over 20 years people=positive™ has been supporting development projects on and offshore in the Oil & Gas sector.In the early 90’s we worked with teams on the Gannet field development, on Curlew with the first ESP technology in theNorth Sea, on major re-development projects in the Brent field,Buzzard and Clair. Our global experience has included involve-ment in Sakhalin Island with Exxonmobil and with LNG projects for Qatargas. Currently we are supporting severalmega-construction projects in Papua New Guinea and offshoreAbu Dhabi in the Upper-Zakum field.
In all of these smart-track© projects, the same principles applied in achieving Flawless Start-Up are easily transferredto the decommissioning arena where ‘Flawless Exit’ becomesthe goal. Focus will still be around putting effort into bringingkey stakeholders together from the outset of the project tobuild strong collaborative relationships and to facilitate integrated working at all levels. The themes will still be aboutworking in a way that delivers ‘No Surprises’ - avoiding problems down the line where safety may be compromisedand where change becomes costly, time-consuming.
In North Sea decommissioning we are already involved with anumber of projects where the goal is now ‘Flawless Exit’. Wework with project leaders to design interventions at staged intervals throughout the project life-cycle and provide performance coaching support to individuals and teams involved across the project.
For more information contact:Barney Mackie - Director of Knowledge and [email protected] our website: www.peoplepositive.com
page 6 Decom North Sea News
Members News
Proserv Offshore completes significant decommissioning contracts
The past 12 months have been a busy and prosperous period for Proserv Offshore with the completion of several significant decommissioning projects worldwide.
In the Asia Pacific region, the company has completed a major subsea cutting contract for the decommissioning of a platform jacket.Weighing almost 16,000 metric tons, Proserv Offshore provided all the cutting equipment and services including specialised ROVoperated water abrasive cutting tools designed to cut up to 80”.
In the UK, Proserv Offshore recently carried out the removal of subsea manifold protection structure for a client in the North Sea. Tofulfill this project, Proserv Offshore were contracted to provide water abrasive cutting services, dredging equipment and personnelfor the severance and removal of the manifold protection structure in four sections. By being able to provide all the cutting anddredging services without the assistance of another sub-contractor, this reduced the number of personnel required and overall project management costs.
Further afield, Proserv Offshore completed the abandonment and removal of St. Mary Land & Exploration’s Gulf of Mexico Vermillion area platform, pipelines and wells destroyed during Hurricane Ike. The project was awarded based on Proserv Offshore’sability to assume asset ownership and provide a complete turnkey project managed service including all subsea tooling, contracting and third party management.
With over 30 year’s experience, Proserv Offshore has abandoned and decommissioned over 600 structures worldwide. Based on thisimpressive track record, the company aims to further increase awareness of its products and services and group wide capabilitiesinto current and developing markets.
Retrieval work after Hurricane Ike
page 8 Decom North Sea News
Contact
Decom North Sea, Riverside House, Riverside Drive, Aberdeen AB11 7LHTel: +44 1224 224129 Fax +44 1224 224301 email: [email protected] www.decomnorthsea.com
Full membership of Decom North Sea is open to any commercial organisation involved with decommissioning. Associatemembership is open to non-commercial organisations and individuals who wish to be kept informed of Decom North Seaactivity and attend networking events and conferences. For further information, visit www.decomnorthsea.com
Member ListingMembers of Decom North Sea – as at 17th September 2010
60 North Recycling LtdAberdeenshire CouncilAF Decom Offshore ASAGR Subsea LtdAKD Engineering LtdAker SolutionsAMEC APEX Speciality Solutions LtdArnlea Systems LimitedASCO UK LtdAsset Development & Improvement Ltd (ADIL)Avanteq LtdBabcock Marine RosythBalance Point Control B.VBIS Salamis (M&I) LtdBJ Process & Pipeline ServicesBOND - Bluegrass Offshore & Nuclear Decommissioning Services LtdBPCaithness Chamber of CommerceCape Industrial Services LtdCarbon Energy ClubCNR International (UK) LtdCodaoctopus Products LtdCSLCutting Underwater Technologies LtdDanish Marine and Offshore GroupDerrick Services (UK) LtdE.M.W Consultancy LtdEast of England Energy Group (EEEGR)Ethan Consultancy LtdExpro North Sea LtdFalck NutecGeoprober DrillingHalliburtonHawk Enviro LtdHeavy Decom InternationalHess LtdHiltiIROJEE LtdKeltbray Group Holdings LtdKishorn Port Limited
Ledingham ChalmersLloyd’s Register EMEAMaclay Murray & SpensMarathon Oil UK LtdMarine Subsea (UK) LtdMwaves LtdNOF EnergyNorse Cutting & Abandonment LtdNSIGOceaneering InternationalOilmac.comOil States MCS LtdPegasus International (UK) Ltdpeople = positivePeterson SBSPetrofacPort Services GroupProduction Services Network (PSN)Project Development International (Pdi) LtdProserv OffshoreRBG LtdRed Stone Drilling LtdRotech SubseaScanmet A.SScottish RenewablesSeajacks UK LtdSeal-Tite UK LLCShepherd & WedderburnSilverdot LtdSMD Robotics LtdSpartan Solutions LtdSPEX Services LtdSuperior - Wild Well Energy Services LtdSureclean LtdTalisman Energy UK LtdTechnical Lifting SolutionsTETRA Technologies LtdThinktank Maths LtdTracerco LtdURS CorporationVeolia Environmental ServicesWood Group
