Offshore Platform Decommissioning Richard Taylor, MA, MBA, C.Eng., FICE – President BP Brasil Ltda ”International Seminar of Offshore Platform Decommissioning” UKTI - SUT – SOBENA – UK Brazil Centre of Ocean Engineering 10 July 2007
Agenda • Design and life cycle context • Scale of operations and growth • Complex project challenges
Design and Life Cycle Context
Context Evolution of Brazilian offshore production fixed floating structures structures >25 years Up to 3.000 metres Source:
Context Ageing of offshore facilities 1,6 offshore offshore Brazilian production (mmbd) onshore shallow deepwater and 1,4 water ultra-deepwater 1,2 1,0 offshore 0,8 structures used for production 0,6 for more than offshore 25 yrs 0,4 onshore 0,2 0 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2005 2007 1954 1958 Petrobras monopoly open market Source:
Context Evolution of GoM offshore production Thunder Pompano Marlin Holstein Mad Dog Horn Mtn Horse NaKika Atlantis 1994 1999 2004 2005 2002 2008 2003 2007 Sea Level 500m 1000m 1500m 2000m
Context E&P life cycle Exploration and Appraisal Development Production Operation of the asset Decommissioning 500 Peak Decline Concentration of cash flow in Annual cash flow (US$mm) a short period high Return on geological - large initial investment 300 risk investment - technical challenges +$ 100 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 years -100 - $ - $ Reinvestment in -300 new projects -500 Source:
Context Decommissioning life cycle Exploration and Appraisal Development Production Project feasibility Install Operation of the asset Decommissioning beginning with conceptual engineering before installation Decommissioning Life Cycle Estimate Updates Decomm. cost Maintain the decommissioning cost estimate throughout the project life estimate Application of engineering rigour and best available technology is the key to delivering effective results beginning with project feasibility
Scale of Operations
BP Operations Exploration & Production Resources Gas & Renewables, Supply & Trading BP Business Customer Facing Segments Refining & Marketing
BP operations and offshore structures Europe ~ 95 North Operations America Oil Other ~ 25 Gas ~ 25 Chemicals Refining Africa Market Positions ~ 10 Note. For these ~170 structures, BP is operator (or JV partner) and has a share of the liability for decommissioning. Latin America BP is operator or a JV partner a and Caribbean further ~120 structures for which ~ 15 the local government has liability for decommissioning. BP has a participation in ~ 290 out of the industry total of ~6,500 offshore structures
Project Challenges North West Hutton
Platform Decommissioning Case Study North West Hutton Launch Location
Decommissioning programme North West Hutton Platform Platform & Pipelines • Production ceased end 2002. • Well abandonment & conductor recovery complete • Topsides cleaning & making safe complete (Hydrocarbon Free) • Process & utility separation complete • Started Normally Unattended Installation (NUI) ops July 04 • Oil & Gas pipelines cleaned and disconnected
UK regulatory environment Legislation • Presumption of clean seabed • Petroleum Act 1998 • UK Decommissioning regulated by DTI • Oslo & Paris Commission (OSPAR) Decision 98/3. • Derogation possible if >10KTe steel jacket or concrete gravity based structure
North West Hutton – Status Decommissioning Programme • Includes: Topsides & Jacket (derogation); Oil Pipeline & Gas Pipeline • UK public statutory consultation completed March 05 • OSPAR consultation (derogation) completed 12 Dec 05 • Regulator Approved Decommissioning Programme 12 Apr 06 • Topsides & Jacket 2007 – 2009 removal window • Pipelines trench & bury 2009/10 • Post 2010 obligated to conduct periodic surveys… Platform Removal/Disposal Contract • Awarded to Heerema Marine Contractors Oct 06 Pipeline Trench & Bury Contract • Scope to be developed for 3/4Q 07 approach to Federal Subsea Contractors
Removal contract
Decommissioning programme North West Hutton Platform 40m
Removal stages
Future UKCS decommissioning activity 400 300 Number of Installations 200 100 Indicative phasing 0 < 5 Years 6-10 Years 11 - 25 Years >25 Years
Decommissioning Role of technology and innovation • New Heavy Lift Vessels, new Diving Support Vessels • Removal techniques that are non- lethal to sea life • Special Purpose Decommissioning Equipment • Potential Regulatory developments − Monitor US Gulf of Mexico experience with permitted ‘reefing in place’.
Proposed Keppel Verolme ‘Decommissioning Vessel’
Decommissioning Role of technology and innovation • New Heavy Lift Vessels, new Diving Support Vessels • Removal techniques that are non-lethal to sea life • Special Purpose Decommissioning Equipment • Potential Regulatory developments − Monitor US Gulf of Mexico experience with permitted ‘reefing in place’
Decommissioning Conclusions • Decommissioning is an integral part of the design and life of the facility • Demand will grow for decommissioning services − 6,500 offshore structures worldwide − 450 in the North Sea with US$42bn decommissioning work • Safety, technical and environmental challenges are complex − technology, consultation and regulatory innovation can help − learnings from NW Hutton can help build industry capability for future challenges
Thank you
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