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Growing sector offers range of opportunity

Supplied with kind permission of the ABR Company Ltd, publishers of Tug & OSV.

The world’s first oilfield decommissioning simulator opened in December at Aberdeen’s Robert Gordon University (RGU). Designed to support well plugging and abandonment (P&A) operations in the UK and worldwide, it stands as one of the latest indications of the growth in the decommissioning sector, as more oil & gas fields mature.

“The simulator can support both oil & gas operators and service companies with the planning and preparation for well P&A,” RGU said, adding that it sees the simulator bringing safety and cost benefits to oil & gas companies and service companies in their decommissioning activities.

A couple of months earlier, Andrew Jones, Exchequer Secretary to the UK Treasury, said the UK – whose offshore waters hold some of the most mature oil & gas fields – now has the chance to become a pioneer in oil decommissioning, and should develop the expertise and sell it globally.

And according to a report from Westwood Global Energy Group: “Decommissioning is a quickly growing sector with more and more oil fields coming to the end of their life span. Over the next 10 years it is expected that more than 100 platforms will be removed, making the scale of decommissioning enormous.”

At a recent London seminar on Offshore Decommissioning Contracts and Operations – organised by networking and knowledge sharing specialist KNect365 under the aegis of Lloyd’s Maritime Academy – more than a dozen experts gave presentations on aspects of the fast-growing sector.

Speakers included Ben Wilby, of Westwood Global Energy Group, with an overview of the decommissioning process; Craig Nicol, of Veolia/Petersen, on safe and cost-effective disposal of assets; and Simon Burnay of the Waves Group, on the role of a marine warranty surveyor.

Sarah Wallace of the Standard P&I Club talked about insuring decommissioning risk. “There are a lot of unknowns when it comes to decommissioning, and you cannot just pick off the shelf in this new area of insurance,” she said. “This is a very different contracting environment, with deviations from knock-for- knock allocation of liability.

“All this is creating challenges for the insurance industry – but the offshore industry is always pushing boundaries.”

A salvor’s view of upcoming opportunities was offered by Dick Lagerweij, general manager, decommissioning, for Boskalis’ offshore energy division. He explained that Boskalis subsidiary Smit Salvage is already experienced in the decommissioning sector, including oil & gas installations, subsea pipelines and seabed infrastructure, and has recently tendered for a contract to disconnect rig apparatus and peripherals.

“Wreck removal – which is essentially what decommissioning is – is very different,” said Lagerweij. “It is much more planned, but, essentially, a man-made asset exists and needs to be removed. Decommissioning presents the possibility of planning very well in advance, whereas with a salvage operation, time is of the essence. A salvage master could be a perfect project manager for a decom job, and the same assets – sheerlegs, tugs, and so on – could be used. But at present there is no standard – and we should be trying to put a standard agreement in place.”

Looking to the future, the decommissioning of North Sea oil platforms is likely to offer increasing opportunities for operators and salvors alike. Marine insurance companies, too, are seeing the market as a potentially valuable, if challenging, new area of business.

Innovation, Technology, and Regulations in Offshore Decommissioning Projects

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