Decommissioning Insight 2016 - Oil & Gas UK

Southern North Sea and Irish Sea

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• The average forecast cost per well P&A in these regions has fallen to £2 million per platform well, £5.6 million per suspended E&A well and £7.6 million per subsea development well. The reason for the decrease is two fold: wells included in both survey years are expected to be cheaper to perform than they were a year ago and the new wells included in the survey have cost forecasts at the low end. • Operators have indicated that reduced well P&A durations and lower rig rates have contributed to the reduction in forecast unit costs. Well P&A durations have reduced over the course of ongoing campaigns, reflected in lower cost estimates for future wells. • Day-rates for jack-up rigs have fallen by over 40 per cent over the last year – the lower rig rates are likely to be reflected in the cost estimates as 64 per cent of platform wells and 70 per cent of subsea wells in these regions plan to use a jack-up rig for well P&A.

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Figure 41: Historical Variation in Well Plugging and Abandonment Cost Forecasts in the Southern North Sea and Irish Sea

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10 15 20 25 30 35 40 45 50

Average Forecast Cost Platform Well

Average Forecast Cost Suspended E&A Well

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Range in Cost Forecasts

Average Forecast Cost Subsea Development Well

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Estimated Cost per Well (£ Million - 2015 Money)

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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

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

Source: Oil & Gas UK

Well P&A

2015 Survey Average

2016 Survey Average

Platform wells

£3 million £8.8 million £9.6 million

£2 million £5.6 million £7.6 million

Suspended E&A wells

Subsea development wells

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