At present, there are over 6,000 offshore oil and gas platforms globally, many of them ageing structures that are outdated in terms of design, technology and production. Field depletion, stricter environmental regulations and poor market performance makes their decommissioning both inevitable and imminent.
Rystad Energy estimates that the growing total value of the global decommissioning market could reach £34.5 billion by 2024. Although this is good news for decommissioning services, it represents a massive headache for oil and gas operators.
Decommissioning in the oil and gas industry is typically an arduous undertaking that requires extensive logistical planning and is essentially a capital intense project that diverts cash and human resources away from other areas of the business. Projects can last upwards of 18 months and require that thousands of tons of material be lifted, removed and disposed of on land. This requires a significant amount of heavy equipment and manpower.
Supermajors such as Shell, Total, Repsol and Premier Oil are expected to assign 10% or more of their North Sea spending in the next five years to removal projects. Aside from the high cost of decommissioning, this end-of-life project can be hazardous to offshore workers and the environment if not handled with the utmost care.
According to the Oil and Gas Authority, some of the primary risks to decommissioning cost escalation have been identified as the following:
- Operator commercial misalignment/lack of collaboration
- Poor execution performance
- Delayed activity planning
- Lack of real-time visibility of decommissioning during execution
A detailed understanding of ageing assets is essential
Poor historical field or asset data is a major factor impacting the successful planning and execution of a decommissioning program. Mistakes, revisions and project delays can significantly increase project costs. Understanding the condition and limitations of assets such as wells and platforms prior to offshore mobilization, is vital to developing a strong execution plan, accurate cost estimates, risk calculations and general project management.
Operators must also ensure they are fully aware of and compliant with regional decommissioning regulations, which can vary significantly from location to location. More mature oil and gas markets such as Mexico, the US and the North Sea, have stringent decommissioning regulations, while in territories like Southeast Asia regulation is still in the development stage and almost non-existent in some places.
Typically, decommissioning an asset in a tightly regulated region takes longer and is more expensive. For example, in the North Sea, operators are responsible for removing and disposing or recycling all asset materials from the ocean. Whereas in locations that allow Rigs-to-Reefs, a controversial practice, operators can leave platforms in the ocean or only partially remove structures thereby cutting their expenses.
Whether lax or strict, decommissioning regulations also require a comprehensive understanding of assets to ensure that operators meet those parameters and avoid hefty fines and further damage to the environment and marine life.
Digital twinning is an all-in-one solution to asset integrity management
Good decisions are made based on good data; digital twin technology with its ability to gather, prioritize, and visualize complex data quickly can support those critical decisions. With a comprehensive and detailed understanding of the asset within the context of its environment, those involved in its decommissioning can better optimize their plans to ensure the program is carried out in the safest and most-cost effective way possible.
Housed on the cloud, the twin acts as a trustworthy source of real-time asset information. Automatically updated, the up-to-date twin mitigates the risk of propagating misinformation and subsequent errors and delays. Easily accessible from a browser, the twin acts as a window for remote stakeholders into detailed project information at every stage of the decommissioning program. This facilitates collaboration across disciplines and speed up decision making, which can ease bottlenecks and avoid delays.
The visualization of risks through simulation and actions taken to mitigate hazards can provide insurers and underwriters with a clearer understanding of the risks and control measures being taken. A greater understanding of the decommissioning project may help in driving down premiums. Insurers have suggested such increased visibility could remove a zero from the cost of premiums.
How FutureOn can help
Our software is fully cloud-based and can be accessed via Edge, Safari and Google Chrome, making asset data and project designs accessible to all members of the engineering team. This high level of accessibility will help speed up decommissioning projects through enhanced information sharing and collaboration.
With its drop drag capabilities, FutureOn’s FieldTwin Design brings real-time collaboration to all aspects of field projects. With the pertinent data easily available, our platforms can be accessed during online meetings with gate-keeping decision makers, which will support quicker and better decision making.
The platform’s intuitive interface enables engineers to quickly create multiple iterations of a project concepts, allowing them to quickly compare and contrast plans to find the optimal and most cost-effective solution to decommissioning.
Contact FutureOn today to find out more about how our digital twin cloud-based platforms can help your company drive down the cost of decommissioning through project optimization.