Contractors who collaborate to cut costs and improve efficiency set to win in N. Sea decommissioning bonanza

decommissioning oil rigsSupply chain companies hoping to win contracts in the multi-billion pound Southern North Sea decommissioning programme must sharpen their service offer and cut costs now, an industry leader has warned.

In the North Sea, more than 440 fields have been developed, or are in the process of being developed.

More than 800 production facilities – fixed or floating platforms or subsea completions – are either in production or in development.

Most pre-1980 structures are now beyond their original service life, typically 25 years.

Experts from the Aberdeen-based Oil & Gas Authority (OGA), Shell, Oceaneering and Proserv will detail SNS decommissioning opportunities at an East of England Energy Group event later this month.

Julian Manning, Chairman of East of England Energy Group’s decommissioning committee, said: “For parts of the supply chain, decommissioning can seem like a hologram. You can see it but when you touch it you feel nothing.”

“But it is on-going and it is real – and it is a fast-changing and evolving part of the life cycle that needs regular engagement to keep abreast of the many opportunities to get involved.

“Decommissioning in the SNS is a new space for some of the asset owners and unquestionably all are driven to take cost out of the task in hand.”

“This clear message of lowering decommissioning costs during planning and execution provides an excellent opportunity for involvement.  If the local supply chain can deliver a solid service offering that significantly takes out cost and limits risk, they will be heard.

“But asset owners and operators have no “big pot of money” for decommissioning. They are looking for new ideas from the supply chain for how to do it for less – be it technical, collaborative or other new approaches.”

“Supply chain companies that are highly-efficient in what they do and can create value with what they offer will be in a far better position.”

“With some 500 wells to eventually be plugged and abandoned, this is an area where cost can be taken out. We already see operators collaborating on identifying opportunities for joint campaigns in order to benefit from efficiency savings. 

“The supply chain will need also to align to generate further savings.  We can also learn from some other geographical areas and industries, for example the Gulf of Mexico or onshore refining decommissioning approaches.”

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