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North Sea Decommissioning Market Forecast 2016-2040energy business insight
e: research@douglaswestwood.com t: +44 (0)203 4799 505
www.douglas-westwood.com
Aberdeen | Faversham | Houston | London | Singapore
© 2016 Douglas-Westwood
29
North Sea Decommissioning Market Forecast 2016-2040
By purchasing this document, your organisation agrees that it will not copy or allow to be copied in part or whole or otherwise circulated in any form any of the contents without the written permission of Douglas-Westwood
Chapter 3 : Overview of Decommissioning Process
Decommissioning – SLVs
There have been several conceptual
SLVs but only one, the Pioneering
Spirit, by Allseas has actually been
constructed.
Its first job will be the removal of the
Yme MOPU offshore Norway. It will also be removing the topsides
of the Brent platforms, which all weigh
>20,000 tonnes.Allseas is already planning to construct
another SLV with a topside lift capacity
of 72,000 tonnes. SLVs can offer significant time and cost
savings to operators. Success will depend on operator will-
ingness and competitive day rates.
Impact of Single Lift Vessels
Several SLVs have been conceptualised in
recent years, including the Pioneering Spirit
(previously ‘Pieter Shelte’) and Twin Marine
Lifter System. However, Allseas are the only
company who have firm plans to enter a
vessel into the market with the Pioneering
Spirit which already has two decommission-
ing contracts and is due to start work in
2016. Allseas are decidedly confident and
already have plans for an SLV larger than
the Pioneering Spirit, following its comple-
tion, currently named Amazing Grace.
SLVs will have a significant impact on
decommissioning times, with a correspond-
ing reduction in costs. The Pioneering Spirit
will be able to remove some of the heaviest
topsides in the world in one lift – something
that would take HLVs significantly longer at
considerably higher costs, due to the need
to use reverse installation methods. Preparation times for SLVs prior to lifts will
also be about a fifth of those required for
conventional heavy lift crane vessels.
The success of SLVs rests heavily on the Pio-
neering Spirit’s performance. If it completes
operations quickly, with no incidents and
has a day rate that appeals to operators, it
is likely a number of other companies will
build rival vessels.Should the Pioneering Spirit be a success, it
and the vessels that follow will at least ease
the demand load across the installation,
pipe laying and decommissioning sectors,
creating vessel availability and easing bot-
tlenecks.
Other concepts for SLVs have been touted, including
the Twin Marine Lifter System that would have been
the first to market had it been ordered and delivered
as expected. This has not been the case and
construction has still not begun. In 2014 the concept
was sold to Shandong Twin Marine and though a
contract to build the vessel was expected to be an-
nounced in 2015, nothing has been forthcoming. Another SLV, ‘Borealis’, was due to be delivered in
2012, however Subsea 7 bought the order in 2009
and re-designed the vessel as a pipelay and heavy
lift vessel.
Table 11: SLVs Under Construction
Vessel
Pioneering Spirit(ex. Pieter Shelte)
Amazing Grace
Twin Marine Lifter
Construction
Daewoo Shipyard
TBD – In design phase
China Petroleum Liaohe Equipment Company
Owner
Allseas
Allseas
Shandong Twin Marine
(JV between Twin Marine Heavy-Lift and Shandong Shipping Corp)
Order Date
2007
-
-
Delivery Year
2016
Expected 2021
-
Max. Lift Capacity (Topsides)
48,000 tonnes
Planned 72,000 tonnes
34,000 tonnes
Max. Lift Capacity (Jacket)
25,000 tonnes
Unknown
16,000 tonnes
Max. Speed
14 knots
Unknown
Unknown
Draft
10-25m
Unknown
Design draft 8.5 m, Submerged draft 22.75 m
Estimated Cost
3bn
> 3bn
Unknown
Notes
Allseas announced in May 2015 that Pioneering Spirit
should be ready to start its first platform removal in the
North Sea later in the year.Following the delivery of Pioneering Spirit, Allseas has
announced the construction of an even larger ship
(160m wide), which is intended for the installation and
removal of the largest vessels.As part of the unique commercial offering an insurance
package is being developed which will allow fixed-price
platform removal.
• Prospects• Technologies• Markets
© 2016 Douglas-Westwood
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North Sea Decommissioning Market Forecast 2016-2040
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Chapter 4 : Supply Chain
Platform Decommissioning – Infrastructure Removal & Disposal
BP
ConocoPhillips
Shell
BG
Perenco
Operators
Amec Foster Wheeler
Aker Solutions
BIS Salamais
EPC / Project Management
ABLE
Kvaerner
Peterson UK & Veolia
AF Decom Offshore
Shipyards/Ports
Veolia
Bureau Veritas
Cape
MMO ProvidersBibby Offshore
Technip
Subsea 7
Support Vessel Contractors
Operators
The Operator of the platform to be removed
may award a contract for the whole decom-
missioning process to a duty holder who will
be responsible for the engineering and project
management of the complete decommission-
ing phase including infrastructure removal.
MMO providers
Operators must ensure the structural integrity
of their infrastructure before it is re
moved.
These services will often be sub-contracted by
the duty holder/project manager or directly by
the Operator.
Heavy lift vessel contractors
HLVs used for the removal of platforms will
usually be contracted directly by the Operator
or platform duty holder.
For reverse installation or piece small decom-
missioning methods, support vessels will
often be required to transport the removed
modules back to shore for disposal. Most HLV
contractors will have the required support
vessels and barges in their fleet.
Waste management & shipyards
The platform Operator or duty holder will
usually be responsible for awarding waste
management contracts to a waste man-
agement service provider, who will then
contract the shipyard or port to be used. The
Operator may directly contract th
e yard/port
themselves.
Shipyards will often work in partnership with
specialist decommissioning disposal and waste
management companies to establish facilities
at their yard. For example, in June 2015 JV
partners Peterson and Veolia invested in a de-
commissioning facility in Great Yarm
outh port.
The supply chain within the UK can be
considered somewhat constrained due to the
shipyard and onshore infrastructure limita-
tions. It is likely that UKCS suppliers may be
overlooked for UKCS disposal contracts due
to the capabilities of Norwegian and Dutch
yards.
Supply chain integration
In recent years there has been a call for the
supply chain to become more integrated with
the packaging of services across the supply
chain to ease the supply chain, share experi-
ence and expertise as well as managing the
risk involved.
In particular there is a call for waste manage-
ment service providers to be involved in the
decommissioning process from an earlier
stage.
HLV
Heerema
SAL
McDermott
SLV
Allseas
Shangdong Twin
Marine
Heavy Lift Vessel Contractors
Veolia
Sureclean
Waste Management
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North Sea Decommissioning Market Forecast 2016-2040
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Chapter 5 : Market ForecastDenmark : Total Expenditure
Figure 24: Denmark – Total Cost Scenario 1
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Expe
nditu
re (
$bn)
FPS Removal
Heavy Transport
Onshore DeconstructionPSV
Substructure RemovalTopside Removal
Well Decommissioning
Figure 25: Denmark – Total Cost Scenario 2
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Expe
nditu
re (
$bn)
FPS Removal
Heavy Transport
Substructure RemovalOnshore Deconstruction
PSV+DSV
Topside Removal
Well Decommissioning
Denmark summaryThough smaller than both Norway and the
UK, Denmark has a number of fixed platforms
which will reach the end of their commercial
life in the next few years. Decommissioning will take place in two main
periods which are built around the abandon-
ment dates for the major hubs in the country.
Four are due to be abandoned in the forecast
period – significantly less than Norway and
the UK.
We expect the Dan and Halfdan hubs, as well
as their tieback fields, to all be abandoned in
the later years of this decade, with decommis-
sioning work running until 2023.
The Siri and Gorm hubs are the other two
that we expect to be decommissioned, with
abandonment for both expected in 2035. Gorm has a large number of platforms with
two small, six medium, one large and two
extra large platforms expected to be removed
by the end of the forecast period. The Siri hub consists of three medium and
one extra large platform. It also has three
subsea wells – % of all subsea well removals
2016-2040 in Denmark.Unlike the other two countries mentioned,
Denmark has no floating platforms, with the
vast majority of production coming from fixed
wellhead platforms.
Well decommissioning will represent only
% of the total spend in S1 and % in
S2 – far less than in other countries. This is
due to the lack of subsea wells, which cost
significantly more to P&A and remove than
surface wells.
Scenario 1Total spend in S1 for Denmark will be $ bn
over 2016-2040, % more than in S2. This
is a higher difference than both Norway and
the UK due to a higher percentage of spend
in the region being focused on platform
removals.
The entire platform removal and onshore
deconstruction process will cost $ bn, %
of total country spend, essentially a reverse of
Norway and the UK. Topside and substruc-
ture removal will lead spend, representing
% and % of the total forecast expendi-
ture respectively. Scenario 2 Total expenditure in S2 will be almost $ bn,
with onshore deconstruction accounting for
the highest proportion of spend outside of
well decommissioning ( % of the total). There is a relatively even split of spend in S2
with heavy transport accounting for % fol-
lowed by substructure removal with % and
topside removal with %. The relatively small
percentage taken up by platform removal
demonstrates the cost saving that can be
made with SLVs.
Danish decommissioning activity will
peak in two distinct periods.Virtually all Danish production comes
from fixed platforms – FPS remov-
als.
These tie into hubs, of which are
coming to the end of their commercial
life.
Dan and Halfdan hubs first to be
removed 2019-2023. Only subsea well removals – well
decommissioning will account for a
smaller proportion of spend than in
Norway and the UK.
2016-2040S1 Total Spend $ bn S2 Total Spend $ bn
© 2016 Douglas-Westwood
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North Sea Decommissioning Market Forecast 2016-2040
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Chapter 5 : Market Forecast
Well removals
The number of well removals in Norway
will grow significantly over the forecast
period, with the last ten years accounting
for % of all removals.
This trend applies to both surface and
subsea wells, with the majority of fixed and
floating production units expected to come
to the end of their life at the end of the
forecast period.
With a cost of nearly $ bn and a total of
subsea wells to be removed, the im-
portance of subsea decommissioning work
is clear. This should be a major focus for the
small number of companies capable of ex-
ploiting this area of the market, particularly
as the number of wells in the UK will begin
to decline in the 2030s.
Surface wells will account for a high propor-
tion of removals at %, but this will not be
mirrored in the cost. They will only repre-
sent % of total well cost, demonstrating
the higher costs associated with subsea well
work, particularly in harsh conditions.
Despite this there are surface wells to
be removed 2016-2040, with a cost of al-
most $bn. This highlights that there is still
a large market for those companies who
specialise in the plugging and abandonment
of surface wells.
Key subsea developments that we believe
will be decommissioned over the forecast
period include tiebacks to the Norne FPSO
( wells), Alvheim FPSO ( wells) and the
Heidrun TLP ( wells).
Platform removals
The number of removals will grow almost
exponentially over the forecast period, with
a limited amount of activity in the early part
of the forecast before it ramps up later. This
is a result of the abundant reserves that a
number of the major hubs in Norway still
possess, meaning they can keep producing
economically for many years.
The dominance of large and extra large
platforms can be seen throughout the
forecast period and platforms under 1,000
tonnes will account for only % of remov-
als (platforms). None of these will
be removed until 2038 as they are part of
major hubs which are expected to produce
into the 2030s.
In comparison there are platforms that
weigh more than 5,000 tonnes, accounting
for % of the total number of platforms
to be removed. This underlines the amount
of time and cost that will be required using
HLVs and the reverse installation method.
The Yme MOPU will be the first job for the
SLV Pioneering Sprit. The platform has never
produced due to cracks in the grouting of
the platform’s legs, which was discovered
after installation. The platform will be trans-
ported straight to shore for deconstruction
after attempts to reuse it were found to be
impractical. The removal will be completed
with a single lift of the MOPU which weighs
15,000 tonnes.
Norway : Platform & Well Removals
Figure 30: Norway – Number of Platforms Removed by Size
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Plat
form
s Rem
oved
Extra Small (Wellhead/Flare)
Small
Medium
Large
Extra Large
Figure 31: Norway – Number of Wells Removed by Surface/Subsea
0
100
200
300
400
500
600
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Wel
ls Rem
oved
Subsea
Surface
84% of well remova ill take place
2031-2040.
Norway is dominated by heavy plat-
forms with % of platforms weighing
over 5,000 tonnes.
The Yme MOPU (15,000 tonnes) will
be the first single lift job for the Pio-
neering Spirit, scheduled for mid-2016.
Major opportunity for well removal
companies, particularly from 2031
onwards.
2016-2040
Platform Tonnage Removed m
Platforms Removed
Wells Removed
Subsea %
Surface %
© 2016 Douglas-Westwood
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North Sea Decommissioning Market Forecast 2016-2040
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Chapter 5 : Market ForecastMethodology
Models
Model Outputs
Assumptions (within Models)
Outputs
Data
Hub
Dat
a, C
olla
tes
Fiel
d D
ata
His
tori
cal F
ield
Pro
duct
ion
Dat
a fr
om
Gove
rnm
ent
Org
anis
atio
ns
DW
Offs
hore
Oil
& G
as D
atab
ase
DW’s North Sea Decommissioning Market Forecast is produced using a combination of
in-house databases (and external sources for verification purposes) which track projects
on an individual basis. Our in-house model forecasts weight and spend using this data and
estimated costs of decommissioning work.
Scenario 1 Cost$ Millions
Day ratesCost
Number of Platform Removals
Scenario 2 Cost$ Millions
Day ratesCost
Number of Platform Removals
Well Removal
Well Decommissioning Model Days
Tonnage Removed
Platform Decommissioning - SLV TonnageNumber of lifts
Abandonment & Decommissioning
Dates for Each Hub
Hub O&M Costs
Offshore O&M ModelField O&M Costs
Field Data:FPS UnitsPlatformsTrees
Tonnage Removed
Platform Decommissioning - HLV TonnageNumber of lifts
Forecast Field Production
D&P Model
Forecast Oil and Gas Price Hub Revenue
Forecast Hub Production
FPS ModelDays
FPS Removal
© 2016 Douglas-Westwood 21North Sea Decommissioning Market Forecast 2016-2040By purchasing this document, your organisation agrees that it will not copy or allow to be copied in part or whole or otherwise circulated in any form any of the contents without the written permission of Douglas-Westwood
Chapter 3 : Overview of Decommissioning Process
Decommissioning Planning Phase
The decision to cease production
occurs as recoverable reserves are
exhausted and incremental recovery
costs prove financially less attractive.
Oil price, petroleum tax and O&M
costs all affect a field’s CoP date.
Sustained low oil prices will lead to
CoP for fields that are near or past
optimal lift.
Cessation of ProductionThe decision on whether and when to
proceed with Cessation of Production
(CoP) programmes will occur as recoverable
reserves are exhausted and the incremental
recovery costs prove financially less attractive.
Oil price is one of the key sensitivities, along
with petroleum tax and O&M costs, which
have traditionally been seen as having an
impact on the timing of CoP, the abandon-
ment of the field and the subsequent begin-
ning of expenditure on decommissioning.
Three financial models have traditionally
been used to identify the optimum point in
time to cease production:
Negative net profit (NNP) is the point
where operating costs exceed revenue
from production.
A minimum margin on ongoing expendi-
ture requires an additional margin on ex-
penditure to cover allocation of operating
overheads, but like NNP this model fails
to take account of future field cash flows.
Maximising remaining Net Present Value
(NPV) incorporates into the calculation
all future cash flows, including decommis-
sioning liabilities and available tax relief
over time.
A key output from the financial analysis is to
identify the critical point that will trigger the
commencement of preparing for decommis-
sioning.
This will ordinarily be the point at which the
remaining NPV equates to approximately
150% of the estimated decommissioning
cost. At this point security provisions will be
triggered and the decommissioning project
team mobilised. In practice this is often
ignored; operators have a strong history of
ignoring the decommissioning costs which
are often deferred as long as possible, even
after the field has been abandoned.
There is a strong correlation between oil
price and abandonment, with a higher oil
price enabling field operators to deploy
enhanced oil recovery techniques. This was
seen in recent years as the stable high oil
price (around $110 a barrel) that lasted
from 2011 to mid-2014 caused numerous
fields to be extended beyond their design
life.
Nevertheless, sustained low oil prices are
likely to impact CoP for fields which are
near or past their optimal life. Numerous
small fields in the UK have had life exten-
sion work which requires a high oil price to
be economic, without it, CoP will undoubt-
edly occur soon.
Two fields have already suffered this fate
with FPS development Athena, which
only began production in 2012, as well as
the well-established Dunlin field that first
entered production in the 1970s, both
reaching their CoP point recently due to
the oil price downturn.
“If they had realistic decommissioning costs built into their balance sheet they probably should have started decommis-sioning some years ago.”
Decommissioning Company
“But the biggest issue that these guys have is the yearly expenditure to keep the platform operable. Just keeping the lights on, on some of these platforms is 20-30 million a year, so again it comes down to having a good economist on your team, who can look at the scenarios of oil price v decommissioning costs v Opex costs.”
Decommissioning Company
Figure 15: Model cash flow for a development drilling project
-200
-150
-100
-50
0
50
100
150
200
250
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17Cas
h Fl
ow (
$m)
Years from Project Start
Annual Cash FlowCumulative Cash Flow
Suffering risk
Maximum exposure
Loss Profit
Net present value
Payback
North Sea Decommissioning Industry to Boom after Numerous False StartsDouglas-Westwood’s new North Sea Decommis-sioning Market Forecast 2016-2040 predicts that between 2016 and 2040 $70-$82 billion (bn) will be spent on decommissioning activity in Denmark, Germany, Norway and the UK; a marked increase on any past work that has been completed, as the region enters a permanent decline.
Decommissioning activity is expected to grow over the next few years, driven by the sustained low oil price, the maturity of North Sea fields and the age of infrastructure that has pushed maintenance costs up, leading to a high breakeven price.
The forecast includes two different scenarios, one assumes that decommissioning methods will remain the same, with reverse installations utilising Heavy Lift Vessels (HLVs) as the most common method. The other scenario considers the impact the Single Lift Vessel (SLV) Pioneering Spirit and others that follow it could have on the market. Scenario 2 will see cost reductions of around $12bn on Scenario 1, demonstrating this impact. It has to be stressed however, that this is contingent on E&P operators embracing this method of removal over the more established method. As a result a huge amount will depend on the success of early removal projects Yme and Brent.
As the country with the largest amount of installed infrastructure, as well as the oldest platforms, the UK will make up over half of all expenditure, with a total cost of over $50bn in Scenario 1 or $43bn in
Scenario 2. Unlike the other countries in the report, the UK will see reasonably high levels of activity throughout the forecast period. From 2030 onwards, however, Norway will grow to become an incred-ibly important part of the decommissioning market. It is expected to account for 32% of the total spend 2016-2040, with 79% of this coming in the last ten years, as the large hubs finally begin to lose com-merciality.
This represents a powerful opportunity for specialist companies to establish themselves in the industry and become trusted and reliable partners to the platform operators who will desire speed, safety, cost effectiveness and reliability, as they aim to keep decommissioning costs low and ensure removal work is completed without incident.
The North Sea Decommissioning Market Forecast is supported by analysis, insight and industry consulta-tion and includes:
• Drivers & indicators – a review of the factors influencing the North Sea decommissioning mar-ket, including: oil & gas prices; maturity of fields; tax regimes; operations and maintenance costs; legislation and challenges in the oil & gas industry.
• Overview of decommissioning process – an in-depth look into how decommissioning is completed, from the cessation of production all the way through to the onshore deconstruction phase. This details the different options available to operators, including the use of HLVs and SLVs and a section on the current HLV and HTV fleets.
North Sea Decommissioning Market Forecast 2016-2040energy business insight
e: research@douglaswestwood.com t: +44 (0)203 4799 505
www.douglas-westwood.com
Aberdeen | Faversham | Houston | London | Singapore
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• The supply chain – detailed analysis of the supply chain, outlining the specialised well abandonment firms, system inerting companies, disconnection specialists, infrastructure removal businesses and disposal companies
• Market forecast – summary of total expendi-ture, weight removed and the number of plat-form and well removals for the four countries featured in the report, as well as a country-by-country breakdown. Expenditure is split into two different scenarios, one showing the impact SLVs could have and one assuming the market con-tinues as it previously has. In addition, for each scenario and country, expenditure is broken down into the following segments: FPS removal, heavy transport, onshore deconstruction, PSV (and DSV), substructure removal, topside re-moval and well decommissioning. There is also a separate section on the onshore deconstruction market.
• Supporting databook – the report will be released with a supporting Excel workbook that features all of the tables and charts that are included in the report.
Why purchase the North Sea Decommissioning Market Forecast?DW’s market forecasting is trusted by sector players worldwide, with clients including the world’s top-10 oil & gas companies, top-10 oilfield services compa-nies and top-10 private equity firms.
The report is essential for financial institutions, equipment manufacturers, offshore engineering, operations & maintenance companies, ROV opera-tors, cutting service companies, contractors, oil & gas companies and agencies & government depart-ments wanting to make more informed investment decisions.
Our proven approach includes:
• Unique and proprietary data – updated year-round from published sources and insight gained from industry consultation.
• Detailed methodology – analysis is based on DW’s in-house Oil & Gas database which details every field in the North Sea. The data feeds into the market model to generate forecasts of decommissioning activity on a yearly basis.
• Comprehensive analysis – comprehensive examination, analysis and 25-year coverage of decommissioning expenditure, tonnage removal and the number of platform and well removals each year.
• Concise report layout – consistent with DW’s commitment to delivering value for our clients, all our market forecasts have a concise layout consisting of industry background and supporting materials condensed to enable quick review with ‘speed-read’ summaries of key points through-out.
© 2016 Douglas-Westwood 2North Sea Decommissioning Market Forecast 2016-2040By purchasing this document, your organisation agrees that it will not copy or allow to be copied in part or whole or otherwise circulated in any form any of the contents without the written permission of Douglas-Westwood
Contents
Table of Contents
1 Summary & Conclusions ..........................................6Summary ......................................................................................................................................... 7
Conclusions .................................................................................................................................... 8
2 Drivers and Indicators ..............................................9Offshore Oil & Gas and the North Sea .................................................................................. 10
Oil – Supply & Demand ............................................................................................................. 11
Oil Price Volatility ....................................................................................................................... 12
Oil Price Impacts ......................................................................................................................... 13
Historical Platform Installations ............................................................................................... 14
Historical Subsea Tree Installations ......................................................................................... 15
Oil & Gas Challenges ................................................................................................................. 16
Drivers of North Sea Decommissioning ................................................................................ 17
Drivers of North Sea Decommissioning – Legislation ........................................................ 18
3 Overview of Decommissioning Process ........... 20Decommissioning Planning Phase ............................................................................................ 21
Overview of Decommissioning Process ................................................................................. 22
Well Abandonment ..................................................................................................................... 23
Infrastructure Removal .............................................................................................................. 24
Other Considerations ................................................................................................................ 26
Decommissioning – HLVs .......................................................................................................... 27
Decommissioning – HTVs ......................................................................................................... 28
Decommissioning – SLVs ........................................................................................................... 29
Decommissioning – SLV: Pioneering Spirit............................................................................. 30
4 Supply Chain ............................................................ 31Well Abandonment ..................................................................................................................... 32
Platform Decommissioning – System Inerting and Disconnection ................................... 33
Platform Decommissioning – Infrastructure Removal & Disposal .................................... 34
5 Market Forecast ...................................................... 35Methodology ................................................................................................................................ 36
Denmark, Germany, Norway & UK : Total Expenditure .................................................... 38
Denmark, Germany, Norway & UK : Total Removals ......................................................... 39
Summary : Weight ....................................................................................................................... 40
Denmark : Total Expenditure ................................................................................................... 41
Denmark : Platform & Well Removals .................................................................................... 42
Germany Summary ..................................................................................................................... 43
Norway : Total Expenditure ..................................................................................................... 44
Norway : Platform & Well Removals ...................................................................................... 45
UK : Total Expenditure .............................................................................................................. 46
UK : Platform & Well Removals ............................................................................................... 47
Onshore Deconstruction .......................................................................................................... 48
6 Appendix .................................................................. 49Data and Text Conventions ...................................................................................................... 50
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Contents
Figures and Tables
Figure 1: Tonnage Removed by Country ............................................................................................................7
Figure 2: Capex Comparison S1 and S2 .............................................................................................................8
Figure 3: Global Onshore vs Offshore Oil & Gas Production, 2005-2021.................................... 10
Figure 4: Regional Offshore Oil & Gas Production, 2000-2015 .......................................................... 10
Figure 5: Oil Price & Demand,1990-2015 ....................................................................................................... 11
Figure 6: World Liquids Production Growth, 2005-2015 ..................................................................... 11
Figure 7: Historical Brent and WTI Oil Prices, January 2010 -January 2016 ................................ 12
Figure 8: Average Annual Brent Spot Price Forecasts, 2010-2020 .................................................... 12
Figure 9: O&G Sector Average Stock Performance Index, June 2014-Dec 2015 .................... 13
Figure 10: Quarterly Visible Subsea Production Tree Orders, Q1 2008-Q3 2015 ................... 13
Figure 11: Fixed Platform Installations 1990-2015 ...................................................................................... 14
Figure 12: Subsea Tree Installations 1990-2015 ........................................................................................... 15
Figure 13: Oil & Gas Production versus E&P Spend, 2000-2016 ....................................................... 16
Figure 14: Skilled Workers by Age Category, 2014 ................................................................................... 16
Figure 15: Model cash flow for a development drilling project ........................................................... 21
Figure 16: Allseas Pioneering Spirit ..................................................................................................................... 30
Figure 17: North Sea Total Cost Scenario 1 .................................................................................................. 38
Figure 18: North Sea Total Cost Scenario 2 .................................................................................................. 38
Figure 19: Number of Platforms Removed by Country .......................................................................... 39
Figure 20: Number of Wells Removed by Country................................................................................... 39
Figure 21: Substructure Tonnage Removed by Country ......................................................................... 40
Figure 22: Topside Tonnage Removed by Country .................................................................................... 40
Figure 23: Tonnage Removed by Size 2016-2040....................................................................................... 40
Figure 24: Denmark – Total Cost Scenario 1 ................................................................................................ 41
Figure 25: Denmark – Total Cost Scenario 2 ................................................................................................ 41
Figure 26: Denmark – Number of Platforms Removed by Size .......................................................... 42
Figure 27: Denmark – Number of Wells Removed by Surface/Subsea .......................................... 42
Figure 28: Norway – Total Cost Scenario 1 ................................................................................................. 44
Figure 29: Norway – Total Cost Scenario 2 ................................................................................................... 44
Figure 30: Norway – Number of Platforms Removed by Size ............................................................ 45
Figure 31: Norway – Number of Wells Removed by Surface/Subsea ............................................. 45
Figure 32: UK – Total Cost Scenario 1 ............................................................................................................. 46
Figure 33: UK – Total Cost Scenario 2 ............................................................................................................. 46
Figure 34: UK – Number of Platforms Removed by Size ....................................................................... 47
Figure 35: UK – Number of Wells Removed by Surface/Subsea ........................................................ 47
Figure 36: Onshore Deconstruction Expenditure Comparison ........................................................... 48
Table 1: Tax Rates ....................................................................................................................................................... 17
Table 2: Number of Platforms by Size Category ......................................................................................... 17
Table 3: Average Age of Platforms by Size Category ................................................................................ 17
Table 4: Key OSPAR Terms ..................................................................................................................................... 18
Table 5: Re-use and Disposal of Platform Components .......................................................................... 22
Table 6: Forms of Topside Removal.................................................................................................................... 24
Table 7: Forms of Steel Jacket Removal ........................................................................................................... 25
Table 8: Heavy Lift Barge Fleet .............................................................................................................................. 27
Table 9: Heavy Lift/Crane Vessel Fleet .............................................................................................................. 27
Table 10: Heavy Transport Fleet >5,000t Deadweight Capacity, by Operator ........................... 28
Table 11: SLVs Under Construction ................................................................................................................... 29
Table 12: Fixed Platform Size Categories ........................................................................................................ 36
Table 13: History of Platforms Offshore Germany ..................................................................................... 43
Table 14: Onshore Cost by Country ................................................................................................................. 48
Figures
Tables
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