Decom North Sea News 001

NEwS

The North Sea oil and gas industry is forecasting a programme ofdecommissioning across the next thirty years, requiring expendituresestimated at £25 to £30 billion. A few isolated projects have beencompleted to date, providing modest but valuable learning andexperience - but the large majority of this huge programme lies before us.

In advance of this extensive period of activity across multiple, complexprojects, the industry (operating companies, major contractors, servicespecialists, technology developers, legal and Snancial experts, consultants etc.)must work together to learn from, and share, the many experiences that will beearned from the next clutch of decommissioning projects.

The industry needs to develop and adopt innovative contracting models, ableto stimulate progressive improvements and efficiency gains. A cohesiveapproach is needed to ensure effective management and mitigation of variousrisks – safety; environment; cost; reputation; technical etc. New compensationstrategies are also required to ensure an equitable approach to themanagement of risk and reward.

The concept of packaging several individual decommissioning projects intolarger programmes appears to offer signiScant beneSts to all parties, but needsfurther research and promotion.

And of course it is vitally important that the UK industry and supply chain isprepared to secure maximum beneSt from the North Sea programme, andthrough doing so becomes globally recognised as a source ofdecommissioning expertise and experience, in the same way as it is alreadyrecognised for its strengths with new developments, production optimisation,subsea technologies, asset integrity and similar.

Decom North Sea, the oil & gas industry decommissioning forum, is leadingand facilitating the industry discussion on these important topics and is keen tohear from companies and organisations interested in pursuing theseconcepts.

Issue No. 1 August 2010 www.decomnorthsea.com

Introduction Contents

page 2

Chairman’s forewordMembership of Decom North SeaDecomnorthsea.comFuture newsletters

page 3

Forthcoming DNS events andexhibitions DNS is participating in

page 4

Supply Chain MatrixPackagingResearch

pages 5-8

Members News:SPEX, Marine Subsea,CodaOctopus, BP, PSNand Spartan Solutions

Cour

tesy

ofO

ilSt

ates

MCS

Welcome to the Irst Decom North Sea newsletter. It comes on the back of anextremely busy few months for the industry forum with our membership driveresulting in many new members, well on our way to our target of 70 for the wholeof this year. In fact, the great rate at which companies and partner organisationshave been joining DNS is a clear signal that the time for the formation of the bodyis absolutely right and that there is awareness of the opportunities on offerthrough the raft of decommissioning work rapidly coming upon us.

we do hope we will have the chance to meet many of our new and potential membersfrom throughout the UK, and even Europe by the end of the year - at our AnnualGeneral Meeting, the programme of events running all over the country and at our Srstmajor conference in October being staged in partnership with Oil & Gas UK.

Finally, a word of thanks to the UK Government’s Department of Energy and ClimateChange, and from Scotland’s two economic development agencies (ScottishEnterprise and Highlands & Islands Enterprise), who have given DNS the Snancialsupport needed to get established until we become self-sustainable through privatesector membership subscriptions and other sources of revenue.

Murdo MacIverPeterson SBS Ltd

Full membership of Decom North Sea is open to any commercial organisation involved with decommissioning.Associate membership is open to non-commercial organisations and individuals who wish to be kept informed of Decom NorthSea activity and attend networking events and conferences.

BeneIts of joining Decom North Sea include, amongst others, :• Access to operators and major contractors to understand their future decommissioning plans and supply chain needs• Opportunity to present and promote your company at Decom North Sea events• Access to market intelligence reports and business opportunities• Opportunity to participate in specialist working groups e.g. (a) to look at the various contracting strategies for decommissioning;

(b) packaging of decommissioning projects• Discounted rate for Decom North Sea events

More information on member beneSts and how to apply to join Decom North Sea can be found at www.decomnorthsea.com

The recently revamped Decom North Sea website will be launched officially atthe AGM in September. It is hoped that this site will be considered as a portalto everything you need to know about decommissioning in the North Sea.Featured on the website will be the Decommissioning Supply Chain Matrixallowing visitors to the site to search for companies with decommissioningcapability by a short series of options: Srstly to select which phase ofdecommissioning then to choose the kind of facility or equipment that is to bedecommissioned, and then to the speciSc services required. Decom North Seamembers featured on this matrix will be able to demonstrate their keycapabilities and experience in decommissioning.

we welcome contributions from ourmembers for future newsletters so pleasesend your news and photos [email protected] hope by sharing your experiences andsuccesses in the decommissioning sectorwith fellow members and the widerdecommissioning industry, further usefulconnections will be made.

Chairman’s foreword

Membership of Decom North Sea

Decomnorthsea.com Futurenewsletters

page 2 Decom North Sea News

Offshore Northern Seas (ONS),Stavanger, 24th – 27th August

Decom North Sea is attending ONS to promote Decom North Sea and attract new members as wellas meeting with some of the key decommissioning players from Norway to learn of theirdecommissioning plans and how the UK supply chain can engage.

Come and see us in Hall J, stand 1018-5

Decom North Sea Annual General Meeting, Marcliffe Hotel, Aberdeen, 14th September

On Tuesday 14th September, the Decom North Sea website and supply chain matrix will be launched. This will be followed by the DecomNorth Sea AGM where members of DNS will have the opportunity to nominate new board members. To Snd out more about the AGMand how to nominate a board member visit www.decomnorthsea.com

Offshore Decommissioning Conference 2010, Dunblane Hydro, 5th – 7th October

Decom North Sea in partnership with Oil and Gas UK are holding a two day Offshore Decommissioning Conference at the DunblaneHydro, Tues 5th – Thurs 7th Oct. The conference theme is ‘Integrating and expanding regional capabilities for decommissioning in theNorth Sea’

A drinks reception on the evening of 5 October will mark the official opening of the conference and provide a fantastic opportunity fordelegates to meet in a relaxed and informal atmosphere before the more formal aspects of the conference commence thefollowing morning.

The Conference will focus on the role and needs of the oil and gas industry’s offshore decommissioning supply chain in Sve mainsessions following an opening keynote address.• Decommissioning in the North Sea - lessons learned and possibilities for the future; with new material on cost estimating and

market opportunities• Contracting strategies; an interactive cross-industry engagement to explore different contracting models• The decommissioning supply chain within the UK; building from new mapping work, showcasing and discussing the capabilities of

four key sectors• The forward agenda for decommissioning; update presentations on wider decommissioning activities from other sectors• Conference reTections

In addition a conference dinner will be held for all the delegates and speakers on the evening of 6 October - this is included in theconference fee.

The conference fee is £437.50, however, Decom North Sea members are eligible for a 20% discount.For more information and how to register for this event go to www.oilandgas.co.uk/events

Decom North Sea and NOF Energy networking event, Durham, 11th November

Decom North Sea and NOF Energy are holding a decommissioning themed networking lunch. This willinclude an update on Decom North Sea as well as a presentation from Jim Niven, Stakeholder Manager, Shellon Shell’s decommissioning plans. For more information and to register for this event,contact [email protected]

Oil and Gas Supply Chain Management, 29th & 30th November 2010, London, UK

SMi’s forthcoming Oil and Gas Supply Chain Management conference will address challenges, innovation, solutions and lessonslearned, as inTuential players from the oil and gas landscape come together to understand how to generate value, create efficiency,and improve productivity.

For more information and to book your place visit www.smi-online.co.uk/supplychain17.aspDecom North Sea members are eligible for a 25% discount off the delegate rate, please contact Andrew Gibbons on + 44 (0) 20 78276156 to receive the discount.

Please visit www.decomnorthsea.com for details of future events.

Forthcoming DNS events and exhibitions

Decom North Sea News page 3


Supply Chain Matrix

The main purpose of Decom North Sea is to ensure the supply chain isready to capture business opportunities - in other words, to ensurethe readiness, capability and capacity of the UK supply chain.

To address the pending supply gap, Decom North Sea hasembarked on the ambitious quest of mapping the existingsupply chain to better facilitate supply and demand. we haveundertaken a major piece of work to map out the supply chain inorder to identify where the capability resides, to enableoperators and major contractors to be aware of supply chaincapabilities and to access services quickly.

we are talking about massive demand – a £25bn-£30bnprogramme that will require all available resources, such asengineering contractors and operators, onshore facilities,specialist services such as cutting, safety andenvironmental specialists, vessels and so on. There is awhole raft of contractors that supply support servicesfor the major operators. we will primarily focus on this.

There may be a limited use for platforms aselectricity substations for the North Sea grid, whichwould enable the UK’s offshore wind and marine power tobe exported, and be balanced with hydro and other forms of powerfrom Norway, Denmark France and Belgium.

Complete platform resale is possible but thought to be generally unlikely, given that in the NorthSea, each platform was designed to meet speciSc requirements of the reservoir and water depth etc. Asa result, no two platforms in the NorthSea are the same, so to relocate and reuse such unique designs elsewhere would be a long shot –but possible.

However a bigger opportunity lies in the possibility of refurbishing major platform components and equipment for secondary re-use onnew developments. There is evidence of a growing focus on possible“re-use”as well as recycling.

Decom North Sea is undertaking researchinto the concept of packaging a number ofdecommissioning projects together, inorder to provide a stronger basis for thesupply chain to prepare and possibly investin new equipment, people, facilities, jointventures and similar. It is hoped to establisha work group from DNS Members toprogress this concept.

DNS is also working on a project with The Robert Gordon Universityand Accenture to undertake research and analysis of differentdecommissioning contracting strategies. Eight Masters students atRGU, who are being mentored by consultants from Accenture, aredevoting the summer months to this project. The team will researchvarious alternatives with members of Decom North Sea beforeconducting an independent analysis to consider the pros and cons ofeach contracting option. This research will be presented for industrydiscussion and debate at our conference in October.

Packaging Research


Members News

SPEX Targets Decommissioning Work

SPEX, the largest independent provider of speciality explosiveservices in the UK, recently received a £1m investment from localbusinessman and entrepreneur, Jamie Oag.

SPEX, formed in May 2009, provides a range of services andengineering consultancy in the Seld of explosive sciences andtechnology in both the public and private sector.

The company’s seven business segments include Seld services,consultancy, training and competence, explosive disposal,manufacturing of specialist explosive products, sales andservices and a special projects division for both the public andprivate sectors. The main oil related activities are focused on theremedial sector such as pipe recovery, wellhead removal, pileseverance, structural removal and anchor, wire and chainseverance.

Gavin Drummond, Managing Director for SPEX, said: “Manyoperators realise that explosives can offer a safe, cost-effective andguaranteed solution compared to other methods. SPEX offer a :rstclass service to our clients and our vision is to continually developtechnologies and methods which will allow us to become a marketleader in explosive decommissioning.’’

SPEX has a team of 20 staff and operates from three bases in andaround Aberdeen which include management offices at CardenPlace, workshops and a bonded warehouse facility at Dyce and atraining and deep water evaluation site at Tillyfourie.

Sarah arrives into Aberdeen to begin MajorDecommissioning Contract

Marine Subsea’s Tagship vessel Sarah has travelled from westAfrica to Aberdeen to begin a series of decommissioningcontracts in the North Sea.

The £2 million multi-client well abandonment programme willsee the specialist light well intervention vessel plug andabandon a total of Sve subsea wells.

The contracts are with a number of oil and gas operatorsincluding DNO, Bayerngas UK and Tullow.

The 8400 tonne Sarah arrived into Aberdeen Harbour on theevening of wednesday 29 July and set sail on Friday 30 July tobegin the contract. Marine Subsea gave a tour of the 120 metrevessel to Brian Nixon, Chief Executive of Decom North Sea.

Mr Nixon welcomed the signiScant contract for the region saying:“We are working closely with operators and the supply chain toencourage the packaging of projects, so it is great to see thebene:ts Marine Subsea UK is delivering in its multi-client approach towell abandonment. Decommissioning North Sea oil and gasfacilities in the UK Continental Shelf is projected to cost between£24 - £30 billion between 2010 and 2040 and we are keen to ensureinvestment is returned to the economy in this way.”

Marine Subsea UK is leading the project to perforate, cement andcarry out abrasive severing and recovery of the wells.The companywill also be responsible for the recovery and disposal of residualoil-based muds.

The Sarah is an Ulstein SX121 DP3 (dynamic positioning) vesselthat is capable of operating in depths of 3,000 metres. The mainfeatures include a tower, main crane, helideck and two heavy dutyworkclass ROVs. She travelled from west Africa where she is on aTexible ten year contract with oil operator Sonangol via Spain,where she had carried a short subsea construction project forRepsol.

Bruce Cowie, Project Manager for Marine Subsea’s project said thata multi-client approach worked well in driving down the costs ofdecommissioning. He added: “Sarah offers a top quality safe andefficient service for well abandonment programmes and we arepleased that our whole ;eet of vessels is currently in demand at homeand overseas. We are well positioned to support the increase indecommissioning activity forecast for the North Sea and in other oiland gas :elds globally. Our safety track record was recognised recentlywith a British Council International Safety Award.”

Marine Subsea UK is based at Regent Centre at Aberdeen Harbourand employs 30 people.

It is part of the Marine Subsea group which is headquartered inOslo, with operations in Aberdeen, Angola, Nigeria and Cyprus.Established in 2006, the company operates in three main industryareas – subsea construction and well intervention, offshoresupport and charter and logistics.


3D Real-Time Technology from CodaOctopus Setfor Decommissioning Tasks

The unique 3D sonar technology of the Coda Echoscope® is setfor new decommissioning projects in the North Sea and the Gulfof Mexico. The beneSts of the Echoscope’s 3D capabilities, whichbring real-time visualisation to the underwater workingenvironment, were substantiated in a successful role in a recent‘plug and abandonment’ task in the Gulf of Mexico, underliningits suitability for entry into the decommissioning arena.

Echoscope technology generates a real-time three-dimensionalimage from one acoustic transmission, or ping, and from a singleping over 16,000 range and bearing points are generated. Thetotal viewing angle measures 50˚ x 50˚ and within this acousticvolume, an instantaneous 3D image is generated. The fact thatthese 3D images can be generated instantaneously and withoutthe need of positioning, heading or motion reference sensors isrecognised as a distinct advantage in numerous diverseunderwater applications.

Commercial achievements with Echoscope technology havebeen documented in a range of diverse applications includingROV operations where, as an intuitive aid to the ROV pilot,real-time 3D visualisation augmented his spatial awareness whennavigating through complex structures. Other projects

include offshore windfarminstallation and underwaterbreakwater construction; in allcases signiScant improvements inoperational efficiency andenhanced underwater safety arereported.

“Given the unrivalled operationaland safety bene:ts that 3Dreal-time isualisation has broughtto many different underwaterapplications in recent years, we aredelighted to provide a newperspective to the processes ofdecommissioning,” said StephenAuld, Managing Director atCodaOctopus Products. “We arecon:dent that Echoscopetechnology will transfer easily intothis environment to enhancesubsea safety and increaseproductivity.”

cour

tesy

ofBP

Decommissioning Project Updates from BP

Miller

BP has submitted a decommissioning programme to DECC onbehalf of the Seld partners (BP, ConocoPhillips and Shell). Thepublic consultation phase ended on 25th June and theprogramme will now continue through the next stage of theregulatory approval process. If the Miller proposals areaccepted by the UK Government, there will be a consultation inEurope through the OSPAR process later this year. BP has alsoissued a request for information (RFI) to the marketplace as the Srststep in formally engaging with the supply chain on Millerdecommissioning.

Further information is available on www.bp.com/miller

Don

The decommissioning programme for BP's Don Seld (partnersConocoPhillips) is currently proceeding through the regulatoryapproval process. In parallel, we are making preparations for theactual well plugging and abandonment activity andremoval of seabed infrastructure which will be carried out after theprogramme is approved.

Further information is available on www.bp.com/don

North West Hutton

Topsides and jacket removal activity on North west Hutton (BP,Cieco, Shell and ExxonMobil) was completed in 2009 and we havenow achieved a 98% Sgure for the reuse or recycling ofrecovered material.

Further information is available onwww.bp.com/northwesthutton


PSN awarded SHELL contract for BRENT FIELD

PSN is pleased to conIrm that it has been awarded a majorcontract by Shell U.K. Limited (Shell), acting on behalf ofitself and Esso Exploration and Production UK Limited(Esso), for work on the Brent oil and gas Ield in the UKNorth Sea.

The contract award is for the decommissioning services on theBrent Delta platform topsides. PSN will provide servicesincluding integrity management; module, process and utilityseparation; safe shutdown; hydrocarbon cleaning;disconnections and preparation for removal of the topsides.

Spartan Solutions joins Decom North Seato focus on increasing equipmentdecommissioning profitability throughbarcode and RFID technology

Spartan Solutions is unveiling its innovative Phalanxsoftware platform to the growing global oil and gasdecommissioning market – targeted at improvingefficiency across equipment recovery, audit andtransportation.

Phalanx seamlessly integrates with existing back officesystems to ensure that all decommissioned equipment isfully tracked and audited at every stage of its journey.

Offshore work is expected to begin around late 2011 as part ofthe initial stages of Brent Delta decommissioning.

Peter Brown, UK managing director of PSN said: “The awardof this contract re;ects the strength of our ability to provide Shellwith proven decommissioning expertise. It also underlines ourability to support operators across the full spectrum of brown:eldservices.

“Building on the existing skills and offshore expertise in the NorthSea region, we are con:dent the contract will provide a signi:cantnumber of new job opportunities in the decommissioningservices sector. It will also position Aberdeen as a global centre ofexcellence for offshore decommissioning.”

Phalanx delivers easy to use operational processes usingmobile technology, barcodes and RFID to reduce operatingcosts while improving contract profitability.

Spartan’s system allows for tighter control of processes andcompliance by removing the risk of human error andunnecessary paper trails.

Brian Nixon, Decom North Sea Chief Executive, says:“The difference between profit and loss in thedecommissioning cycle relies heavily on the efficiency ofequipment management processes. Spartan has a strongtrack record with major companies in the oil and gas marketand I am delighted that they are bringing their strengths tobear in this emerging growth sector.”

Jim Green, Managing Director of Spartan, says: “Phalanxis designed to improve the efficiency and reduce the costs ofmanaging equipment. Decommissioning is the final phase ofthe equipment lifecycle and is a natural fit for our products andservices.”

Phalanx’s capability has already been proven in oil and gaslogistics, having been deployed by oilfield service andrental providers Swire Oilfield Services, Aker Solutions andAggreko.

Spartan Solutions is exhibiting on Stand 1018-16 (Hall J) atONS 2010, Stavanger, Norway from August 24 to 27. Formore information visit www.spartan-solutions.com andwww.ons.no


Contact

Decom North Sea, Riverside House, Riverside Drive, Aberdeen AB11 7LHTel: +44 1224 224129 Fax +44 1224 224301 email: [email protected]

Full membership of Decom North Sea is open to any commercial organisation involved with decommissioning. Associatemembership is open to non-commercial organisations and individuals who wish to be kept informed of Decom North Seaactivity and attend networking events and conferences. For further information, visit www.decomnorthsea.com

Member Listing

Reciprocal Agreements

Members of Decom North Sea – as at 26th July 2010

60 North Recycling LtdAberdeenshire CouncilAF Decom Offshore ASAker Offshore Partner LtdAMECAPEX Speciality Solutions LtdAsset Development & Improvement Ltd (ADIL)Avanteq LtdBabcock Marine RosythBJ Process & Pipeline ServicesBOND - Bluegrass Offshore & Nuclear Decommissioning Services LtdBPCaithness Chamber of CommerceCape Industrial Services LtdCarbon Energy ClubCodaOctopus Products LtdCSLCutting Underwater Technologies LtdDanish Marine and Offshore GroupE.M.w Consultancy LtdEAP Associates LtdEast of England Energy Group (EEEGR)ES EuropeEthan Consultancy LtdHalliburtonHess LtdIROKeltbray Group Holdings Ltd

Ledingham ChalmersLloyd’s Register EMEAMaclay Murray & SpensMarathon Oil UK LtdMarine Subsea (UK) LtdMwaves LtdNOF EnergyNorse Cutting & Abandonment LtdNSIGOil States MCS LtdPegasus International (UK) LtdPeterson SBSPetrofacPort Services GroupProduct Development InternationalProduction Services Network (PSN)Proserv OffshoreRotech SubseaScottish RenewablesSeal-Tite UK LLCShepherd & wedderburnSMD Robotics LtdSpartan Solutions LtdSPEX Services LtdSureclean LtdThinktank Maths LtdURS Corporationwood Group

The name of Decom North Sea was selected with care, as it is intended to approach the decommissioning programme from a pan-North Seaperspective. we believe that the scale and complexities of offshore decommissioning between 2012 and 2025 will require resource andcapacity from all North Sea producing countries. Decom North Sea is therefore keen to foster collaborative links with European colleagues

we have already signed reciprocal agreements with regional energy bodies across Europe to help us reach as many potential members aspossible in the UK and further afield. These include NOF Energy, East of England Energy Group, North Scotland Industries Group, IRO(the Association of Dutch Suppliers to the Oil & Gas Industry), Offshore Denmark and the Carbon Energy Club in Belgium. A furtheragreement has been reached with Caithness Chamber of Commerce to research the possible transfer of experience and technologies fromthe nuclear decommissioning sector.

Documents

Decom North Sea News 001