With continued oil price uncertainty, the advent of deepwater decommissioning and escalating abandonment costs, it has never been a more important time for the industry to demystify one of the most overlooked parts of the offshore asset lifecycle: decommissioning. There are estimated 6,500 offshore rigs that will be decommissioned by 2025.
When comparing global decommissioning and abandonment (D&A) progress, it’s undeniable that the Gulf of Mexico has the most established track record in the industry. Extensive platform removal and well plugging and abandonment activity has created a thriving supply chain for decommissioning in the region, ever since the introduction of the 2010 Idle Iron NTL regulation.
Outside the Gulf of Mexico, less mature decommissioning regions are beginning to come to terms with the “emerging reality” of decommissioning. National oil companies in the Asia-Pacific region are developing the guidelines and regulation required to kick-start D&A programs, whilst the North Sea is on the cusp of a flourish in activity.
The overarching D&A landscape is undergoing a shift, though, in light of several key industry developments – this, in turn, will impact decommissioning strategy in 2015 and beyond.
- Oil price uncertainty
- Shift from shallow to deepwater in the Gulf of Mexico
- Spiraling decommissioning costs
- Offshore liability changing hands
- Integrating decommissioning as part of the lifecycle
- Industry collaboration