Despite the disruptions of 2020, decommissioning removals on the UKCS have progressed largely uninterrupted. Wireline explores the secrets of successful removal campaigns.
Clearly, 2020 will prove to be a year of significant disruption for the UKCS E&P sector. Record-low levels of exploration drilling and delayed development, coupled with the deferral of maintenance work such as the Forties Pipeline System, have all amounted to a major slowdown across the basin.
Decommissioning has not been immune to these effects either. Much well decommissioning activity has been deferred, even as more operators have submitted plans for cessation of production (COP) of their assets in light of the strong economic headwinds. There is, however, a bright spot: removals activity in 2020 has continued at pace with progress made across several of the UKCS’ largest decommissioning projects.
Based on forecasts from OGUK’s Decommissioning Insight Report 2019, around 12 topsides and 150 wells are due to be decommissioned each year up to 2028, with all activity totalling £15.2 billion over the decade. In terms of mass, topsides removal alone will amount to nearly 880,000 tonnes over the period, although much of this is forecast towards the end of this horizon.
In 2020, much activity has focused around a few major UKCS operations, including CNR International’s Ninian Northern platform, Shell U.K.’s Brent field and a multi-asset campaign by Chrysaor, as well as others by the likes of Perenco, Premier Oil and EnQuest. That operators, offshore contractors and onshore disposal yards have been able to work together to maintain progress on these projects despite the challenges of COVID-19 and cost constraints is encouraging. Wireline spoke with several of these OGUK members to find out more.
“We have demonstrated on Brent that if you have long-term contracts and a series of concurrent projects, you can improve over time significantly. We’re not talking a few percentage points, we’re talking tens of per cent overall, and everyone wins.”
Delta, Bravo, Alpha
Now more than a decade into the decommissioning of the Brent field in the northern North Sea, Shell U.K. is proof of how far the sector has come. As Brent decommissioning project director William Lindsay noted: “One of the great things about having four platforms is that we can improve every time we do it. Brent Delta topside removal was the first one in 2017, Bravo in 2019 and Alpha in 2020. Every time we decommission one of these platforms, we do it better and better… offshore exposure is less and the costs are less as well.”
Of the four field platforms, three are now down-manned and the topsides removed for dismantling and recycling, while Brent Charlie continues to produce in parallel with well decommissioning. The standout activity of 2020, however, has been the single-lift removals of both the 17,000-tonne Brent Alpha topsides before transfer to Able UK’s dismantling yard in Hartlepool, and its 10,000-tonne upper jacket delivered to Norway for dismantling. Given the disruption of coronavirus, the fact that activity progressed at all is an achievement. But William is keen to impress that it was Shell U.K.’s contractors and supply chain partners that made this happen: “This was driven by the supply chain, the supply chain wanted to do work this year – they weren’t forced to contractually.”
He links the successes in both cost reduction and execution to the flexible approach to contracting across the project. Shell U.K.’s contractor partners are given large windows of time in which to execute their work scopes, allowing them to plan multiple campaigns of work (often for multiple clients) with greater efficiencies.
In this case, that flexibility enabled contractor Allseas to take on four platform removals across the North Sea over the summer of 2020. All used the same vessel – the record-breaking Pioneering Spirit – and similar lift setups, meaning significant reductions in preparation, transport time, and therefore cost.
For Alpha’s jacket, Shell U.K. turned to Heerema Marine Contractors (HMC) and another record-breaking vessel, Sleipnir. In addition to being the world’s largest crane vessel, it is also the first of its type with dual-fuel capabilities, running entirely on LNG for the three-week campaign to help lower emissions. Equipped with two 10,000-tonne revolving cranes, Sleipnir allowed the team to lift the 10,000-tonne Alpha jacket vertically, complete with the well conductors secured inside, saving a considerable amount of time offshore – “the first time this has been done on that scale,” according to William.
Shell U.K.’s onshore partners worked equally hard to maintain their 2020 schedules. With the Bravo platform still being dismantled, Able UK upped the pace to make room for the incoming Alpha topsides – any delays here would have affected the lift schedule throughout the rest of the project. According to William, this was achieved largely with more staff hours on site, but also through increased mechanisation, as Able invested in new machinery which sped up the process whilst maintaining social distancing.
“We had a highly choreographed schedule and we were very transparent about that – what we try and do on Brent is be transparent in our planning and open about what our challenges are. If you’re open about this then other parties are not surprised,” William explains.
The effect of this flexibility, and the longstanding relationships between Shell U.K. and its contractors, have enabled the reductions in time and cost mentioned above. William notes that the time Pioneering Spirit spent at the field for each lift has reduced from two and half days for Delta to less than 24 hours for Alpha. The topsides preparation work for those lifts has also reduced, with Bravo it was 60% less than Delta and Alpha 30% less again. “These are not incremental changes they are significant reductions in offshore exposure,” he adds.
While Alpha has progressed well, along with work at Shell U.K.’s Curlew FPSO, William says COVID-19 has resulted in deferral of activity at Brent Charlie, mainly due to reductions in personnel on board (POB) impacting the amount of work able to be executed.
Shell U.K. and its partners’ ability to execute work, even throughout a disruptive year such as this, is testament to the collaboration and co-operation visible in the decommissioning space. In William’s view, it is also proof that this kind of flexibility leads to better outcomes for all: “We have demonstrated on Brent that if you have long-term contracts and a series of concurrent projects, you can improve over time significantly. We’re not talking a few percentage points, we’re talking tens of per cent overall, and everyone wins.”
Progress through technology
Chrysaor too is working on an extensive decommissioning and removals campaign in the southern North Sea (SNS). This multi-year project is spread across 38 platforms, 145 wells and over 2,000 km of pipeline, all tied back to an onshore gas terminal at Theddlethorpe, which is also in the process of being dismantled.
According to Chrysaor’s decommissioning, removal and disposal manager, Robert Stevenson, 2020 has seen the removal of ten of those platforms via lift vessels and completion and removal preparations at several others, as well as the decommissioning of 20 wells. At the same time, three subsea campaigns have been completed for various works, two by removal contractors and one by Chrysaor itself.
All of which is to say that while COVID-19 has proved challenging, it has not halted progress. “We had no interruptions as a result of COVID on our two lift vessels this year,” Robert affirms. The main impact for Chrysaor’s operations was the implementation of quarantine periods and testing of staff, effectively creating bubbles on the vessels. Robert says COVID management plans were developed to cover mobilisation, operations and emergency, all of which allowed work to continue. “We were pretty keen right from the start that we had COVID management plans in place with each of our contactors and fortunately they bought into this with us,” he says.
The physical removals work has largely been handled by one contractor using two heavy lift vessels, over two campaigns running April-July and July-September. However, these lifts mark the end of a much longer process of preparation work on the assets themselves. Chrysaor’s method is to mobilise its removal preparation teams and its well decommissioning teams on the same rig, allowing well decommissioning work to happen in tandem with topside and jacket preparation, something Robert believes is a differentiator for the company in terms of costs.
This also avoids the potential for encountering last-minute structural or engineering issues just prior to lifting. “The last thing you want is a very expensive vessel sitting alongside and you’re not able to use it,” he notes. “Our preference was to de-risk this and complete preparation work in advance. So we do preparation work off the drilling rig and shelter a lot of the activities whilst we do well decommissioning.”
“We think that we’ve got the process optimised as much as we can, so the next big leap forward for us will be technology.”
As with Shell U.K., Chrysaor gives its contractors flexibility – in this case one calendar year – to plan their removal activities. Contracts were offered in four portfolios across the 38 SNS assets and were awarded to four different companies via separate tender processes. “The lesson is that one size doesn’t fit all,” adds Robert. While the team initially thought the first contract would simply be extended for more work, “the reality was there were different solutions out there for different companies; they all have different approaches, different strengths and vessel capabilities.”
“It does mean there is a small amount of additional work as you have to do marine assurance and vetting on multiple vessels, but on the whole it gives us the optimum solution and it has helped us manage capacity,” he continues. Onshore disposal of the structures is also handled by the removal contractors, with material brought to two UK yards for dismantling.
One thing he reports from regular engagement with contractors is that some providers are further along the trail of technology and methodology adoption than others. There is, he suggests, still an assumption that decommissioning an asset is simply construction in reverse: “I think there’s still a lot to learn. Some are still undertaking preparation works with methods that are quite time consuming and they have this mentality that how we built and installed it, is how we should remove it. This is not always the best solution.”
For its part, Robert says the contractual arrangement has meant Chrysaor does not define specific performance and technology metrics for removals contractors. However, it does monitor performance from its own well decommissioning teams to identify successes and potential efficiencies, either in design or project execution. Chrysaor has demonstrated year-on-year improvements in efficiency metrics, which positively impact costs.
“What we tend to find is it’s a bit of both,” he says, adding that with the team now tackling well 115 of 145, they are extremely competent in their approach. “We think that we’ve got the process now optimised as much as we can, so the next big leap forward for us will be technology. It’s now about what other technology is out there and we’re talking to companies all the time and investing in technology and trials to see if we can come up with better ways of doing things.”
OGUK decommissioning manager Joe Leask is also encouraged by progress this year, among both operators and the wider supply chain.
“I also agree that it’s really important we recognise the supply chain’s role this year,” Joe says. “They’ve shown great tenacity to keep work going during tough times, and its proof of our broad workforce in action in that they can maintain and develop skills in these conditions.” He also notes the importance of OGUK’s lead during the early months of 2020 to ensure that the energy workforce were rightly recognised as key workers, and that health and safety measures enable them to work safely on and offshore.
Joe points to the fact that both projects considered here are large internal company portfolios, in which the operators and contractors have been able to learn and share information over the course of the contract. “Some companies don’t have the ‘benefit’ of a large portfolio of decommissioning work, and industry needs to work hard to enable multi operator campaigns so we can see these gains shared across operators,” he adds.
“I also think it’s interesting how the long execution windows have allowed the supply chain to develop their own campaign strategy,” he says, noting Allseas’ execution of four projects for four different operators in Denmark and the UK. “Effectively this is a multi-operator campaign…exactly what we set out to do by providing these large windows of time in which to work. I think this shows there are elements of success in these projects already.”
While “removal-ready” projects were able to continue this year, Joe notes that the industry has seen a general reduction in expected expenditure this year and next. Well decommissioning activity in particular has been heavily affected and may take the longest to recover, as operators try to reduce expenditure in uncertain times. “A lack of wells activity in the short term could mean that we lose people, resources and infrastructure to conduct this job,” he says. “This may make the industry less competitive in the longer term and we could see costs escalate in an area already well known to be the costliest.”
In the near term, he adds, a lack of well decommissioning activity may also start to impact removals, given these activities are concurrent. “Because of that, it’s important to explore opportunities to stimulate activity in well decommissioning – and if cost is one of the main barriers, then enabling multi operator campaigns could be one way of unlocking more work.”
“The ability to continue to do activity when so many other industries have ground to a halt, it has to be acknowledged that the supply chain supporting us this year have done an amazing job… I think it is a very good example of the fact that we can really rely on the supply chain to deliver.”
Supply chain champions
It’s clear that the fallout from this year will affect decommissioning execution and forecasting over the medium term. Even though operators like Chrysaor and Shell have been able to forge ahead with topsides and jacket removals, a considerable volume of work has still been pushed to the right, particularly on the wells front. At the same time, the acceleration of COP at some assets means contractor schedules may become increasingly pressured in the coming years.
In addition to championing the value of long-term flexible contracting, Shell U.K.’s William Lindsay warns of the danger of speeding up COP processes without due considerations: “Generally the most cost effective decom is done when you prepare for decom whilst still operating [and undertake] well decommissioning in parallel with production… What comes after that is relatively low cost for the operator. With the acceleration of COP at a number of developments, without that preparation time, it means that ultimately they will likely pay more in the long run.”
He is equally concerned over the potential for mass schedule changes across the whole industry, in light of the disruption caused by COVID-19. Again, he says, long-term flexible agreements are key to ensuring that the supply chain has the certainty of campaigns of work: “If everyone changes plans continually then the supply chain won’t invest and do things at very low margins, which really restricts innovation. In an evolving industry you need innovation to reap the benefits, not tomorrow but in the longer term.”
Chrysaor’s Robert Stevenson is also keen to stress the importance of education and feedback from successful campaigns, to help contractors avoid inefficient execution methods or outdated technology. “Lots of companies will want to be involved in decommissioning – but are they going to adapt and change? Because that’s what’s needed. I think there is a lot of education required. Everybody wants a piece of it, whether they can do it or not, and many approaches tend to be: ‘We’ll learn as we go.’”
Nevertheless, the feedback from operators during an unprecedented year is glowing – and contractors and the wider industry supply chain clearly have plenty to be proud of in their performance. “This year’s unprecedented challenges including the pandemic and volatile commodity prices have given our world-class but hard-pressed supply chain the chance to test its mettle, with strong evidence that operators and contractors are working effectively to improve efficiency and delivery of safe and environmentally sensitive decommissioning,” adds Joe. “Maintaining momentum and providing focus and initiative towards areas of less activity, such as well decommissioning, is key if we are to ensure the UK becomes a centre of excellence, leading the way and exporting its expertise around world as other basins mature.”
“This is their time of need, lets fight with them so they can continue to do a good job,” he adds.
As William concludes: “The ability to continue to do activity when so many other industries have ground to a halt, it has to be acknowledged that the supply chain supporting us this year have done an amazing job… I think it is a very good example of the fact that we can really rely on the supply chain to deliver.”
This article first appeared in the Autumn 2020 Issue of Wireline.