Ole Udsen, Contracts & Partnerships Manager

At the latest Offshore Decommissioning Conference in November, I gave a presentation as part of the Well Decommissioning session. As we all aim towards delivering safe, environmentally sound and cost-effective decommissioning, the session showcased performance improvement initiatives, technologies, and contracting models which are reducing the well decommissioning cost base.

Download the presentation below:

Well plug and abandonment makes up the largest portion of the overall cost of decommissioning programmes, estimated at more than 50%. Maersk Decom is working towards three methods of reducing this cost element together with our partners and customers, without compromising sustainability and safety. To get started, we asked ourselves the following three questions:

1. How can we mitigate risks to incentivise multi-operator campaigns?

The simple answer is to eliminate first-mover disadvantage. In a regular campaign, the first wells or structures decommissioned would not benefit from savings that learnings provide down the road. One way to overcome this is to distribute risk and learnings savings across all wells or structures in the campaign to levelise the cost across operators. The model can also be modified to distribute according to the categories of well complexity.

2. How can we incentivise economies of scale to achieve and share savings?

Now that we’ve removed the first-mover disadvantage, we need to create a first-mover incentive. You can read more about our answer to this in my previous blog: Incentivising cooperation and transparency through commercial models.

3. How can we rethink our approach to P&A from an operational perspective?

In general, we need to find ways to employ more cost-effective assets. We call our approach to this The Optimisation Continuum. The basic idea is shifting scopes from heavy assets to less expensive and more flexible ones. For example, converting temporarily abandoned wells to permanently abandoned wells using a support vessel instead of a jack-up rig. Another option is distributing plug and abandonment scopes for challenging subsea wells between a drilling rig and support vessel.

While it is currently difficult to get multi-operator campaigns off the ground, we hope the above examples of innovation should ease the way forward.

For more information, download the full presentation here:

Three Savings Opportunities in Well Decommissioning