Decommissioning Insight 2016 - Oil & Gas UK

DECOMMISSIONING INSIGHT REPORT 2016

• Sixty-three per cent of subsea wells in these regions plan to use a semi-submersible rig to carry out P&A. The recent fall in rig rates could explain the fall in forecast unit costs for these wells.

• However, rig rates are only one factor that impacts the cost of well P&A. The number of days to plug and abandon a well is also an important factor, and operators have advised that expected well P&A durations have been revised upwards for some large subsea projects based on data from completed projects and further studies on the condition of the well stock.

Figure 40: Historical Variation in Well Plugging and Abandonment Cost Forecasts in the Central and Northern North Sea and West of Shetland

Average Forecast Cost Platform Well

Average Forecast Cost Suspended E&A Well

10 15 20 25 30 35 40 45 50

Range in Cost Forecasts

Average Forecast Cost Subsea Development Well

0 5

Estimated Cost per Well (£ Million - 2015 Money)

2011

2012

2013

2014

2015

2016

2012

2013

2014

2015

2016

2012

2013

2014

2015

2016

2011*

2011*

Platform Wells

Suspended E&A Wells

Subsea Development Wells

Source: Oil & Gas UK

* Data cannot be split out for subsea E&A and development wells for 2011

Well P&A

2015 Survey Average

2016 Survey Average

Platform wells

£4.1 million £7.8 million £9.9 million

£4.1 million £6.2 million £10.2 million

Suspended E&A wells

Subsea development wells

60