Decommissioning Insight 2016 - Oil & Gas UK

7. Forecast Unit Costs – 2016 to 2025

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7.1 Well Plugging and Abandonment The cost of well P&A depends on a number of factors that differ across the regions of the North Sea. These include water depth, weather, reservoir type, age and, in some cases, measures that may be required to prevent well collapse caused by depressurisation. The cost estimates included in this report vary significantly in their degree of maturity. While some are informed by previous experience and data from well P&A work that has been carried out, other estimates are at an earlier stage in their development and are inherently more uncertain. On the UKCS, data from previous Decommissioning Insight reports have been used to compare expenditure forecasts for well P&A activity. This analysis shown in Figures 40 and 41 overleaf considers the average and range in well P&A forecasts for each survey year from 2011 to 2016. Platform well P&A is typically cheaper than for both types of subsea wells as it is usually not subject to the same weather constraints or rig requirements and can also be carried out more effectively in batches or campaigns, allowing the operator to share mobilisation costs and other efficiency gains across a number of wells. Furthermore, experienced gained from ongoing platformwell P&A has helped to inform future forecasts. For the first time, operators on the Norwegian Continental Shelf were surveyed on their forecast well P&A costs for projects within the survey timeframe. Figure 42 on p62 shows the average and range in cost forecasts for platform and subsea wells in this region. Operators have advised that wells at the low end of the cost range are typically simple, rig-less P&As, using wireline, pumping or crane jacks where the reservoir may already have been isolated. Wells at the top end are more complex, rig-based P&As, with challenging access and cementing. They may require retrieval of tubing and casing, milling and cement repairs (see section 5.1 on p18 on rig type for well P&A).

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Central and Northern North Sea and West of Shetland

• The average forecast cost for platform well P&A across the decade at £4.1 million per well has not changed since the 2015 report, although the range of estimates has narrowed.

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• As 86 per cent of platform wells in these regions are expected to use an integral rig to carry out P&A, the recent reduction in rig rates is unlikely to impact the cost of these wells.

• A wide range in expenditure forecasts for subsea wells in these regions has been reported consistently over the last four survey years, reflecting the variation in the types of wells to be plugged and abandoned.

• Average forecast costs for suspended subsea E&A wells have reduced since the 2015 report by an average of £1.6 million per well, although the range in cost forecasts remains wide.

• The same decrease cannot be seen for development wells as the average cost has increased slightly by 3 per cent to £10.2 million per well, while the range in estimates has narrowed.

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