As mature basins including the North Sea enter a chapter where decommissioning projects are competing with more value adding new developments and barrel-chasing opportunities to secure rigs and operational units, it is essential to ensure that all the potential solutions are considered, and the most effective solution is selected to ensure project success.
The OEUK Decommissioning Insight 2021 report (Decom Insight 2021 (oeuk.org.uk)) indicated that in the next decade 1,782 wells would require to be abandoned. Assuming a nominal estimate of 20 days to abandon each of these wellbores, this results in the potential for over 97 years of operational scope. This has driven the need to ensure available units are assessed to ensure efficient decommissioning projects are executed. The above UK demand alone could fully utilise the existing rig fleet for several years.
Globally speaking, according to rig analysts Esgian, rig demand is on the up, with the North Sea being earmarked as one of two ‘hotspots’. Though a dramatic surge in demand is unlikely, activity in the near-to-mid-term is expected based on the price of $80/barrel. Esgian also illustrates a revisiting of ‘shelved’ projects is likely, the North Sea’s Cambo oilfield being a prime example.
That will mean an uptake in either constructing new rigs from scratch or reactivating cold / warm stacks. Operators will have to face up to a distinct lack of options when it comes to rig selection in addition to rising costs and less flexibility on timing. Simply pushing out decommissioning activity and deferring costs may solve a short-term problem but this may not meet the agenda and commitments provided to regulatory bodies and environmental stakeholders.
One question this current market environment raises is, how can the oil & gas sector adapt to meet the changing market dynamic.
One area to be explored further is the use of rig less approaches for platform operations. Recently in the UKCS, a shift towards rig less approaches for platform multi-well decommissioning has been observed. The capability of modern equipment such as Modular Drilling Rigs (MDR) now overlaps many areas which were previously seen as activities that could only be performed by full rig packages. Modern MDR units also provide the benefit of hands-free operations, which deliver added safety benefits. This provides direct benefit to all platform lifecycle projects.
Establishing if a rig-based approach is essential or not can potentially take off the table the costly option of platform rig reactivation, and the rental of an MDR also eliminates ongoing operating, maintenance and recertification costs on existing drilling facilities. In addition, jack-up options pose interfacing challenges with regards to both the platform structure and the subsurface infrastructure. Increased schedule risks can occur due to the availability of this unit type, as only certain jack-ups may be suitable for the subject platform, and due to the weather, vulnerability of jack-up locating operations. The recent upsurge in the use of jack-up rigs to drill subsea development wells carries the potential result of increased the day rates and decreased availability.
Another opportunity is to draw on global experience in abandonment unit selection and applying this to the entire oil & gas project lifecycle, moving away from the traditional thinking and instead adopting a risk-based approach – evaluating all available operational units which can offer safe, effective and cost-efficient methodologies. Internationally, operators have yielded significant project savings by utilising dynamically positioned rigs over conventionally moored units, such selection when coupled with fit for purpose subsea well control equipment could enable DP units to be less constrained in operating in shallower water thus saving considerable time for mooring and rig move operations.
*Photo credit - Archer