Technology Focus: Decommissioning (January 2013)

Abstract

Technology Focus Industry is now beginning to see decommissioning projects occur, probably too quickly for the owner and not quickly enough for the expectant supply chain. Decommissioning, however, is not just an end-of-life phenomenon. Here are three key decommissioning touch points that can be influenced successfully before the end of an asset’s life. Design for Decommissioning. Design should be considered through the stage gate engineering process for an asset. Specific requirements should be included in the basis of design. The engineer should develop a creditable decommissioning plan for the asset, include the necessary engineering effort in the detailed design to facilitate that plan, and ensure that the requirements are carried out through the design, construction, and operation. An example for an offshore structure would be to design all large module lifting appurtenances such that they can be retained for the life of the asset. Experience tells us that reinstating offshore lifting appurtenances for decommissioning can be costly. Construction Documentation. Documentation is priceless. The installation records are the first place I look when starting to develop a decommissioning plan for an offshore asset. Because many decommissioning tasks are the reverse of installation, having the detailed installation records can provide guidance on a host of critical factors, such as task duration, weather conditions, nonproductive time, temporary installation aids, problems, and damage. An example for an offshore structure would be a notation in an installation record that a pile stabbing point was damaged; this would alert the decommissioning engineer that he needs to be prepared for an internal obstruction for severing that pile. Construction records should be cataloged as a part of any decommissioning plan. Decommissioning Costs. Costs need to be developed by use of a comprehensive estimating process based on a creditable decommissioning plan. Decommissioning costs for a producing asset affect the owner’s profit and loss today, even though that asset might not be decommissioned for many years. The accounting rules that govern provisioning for this future decommissioning liability require the owner to develop a cost estimate that is then amortized on a unit production basis over the estimated production of the asset. The decommissioning plan and cost estimate can be improved progressively through periodic accounting updates similar to the stage gate approach used for new construction. In an ideal world, at the end of the asset life, the provisioning will be adequate to cover the work required to execute the decommissioning. Recommended additional reading at OnePetro: www.onepetro.org. SPE 156611 The Ecological Resources on Shell Mound Habitats Surrounding Platform Decommissioning Sites in the Santa Barbara Channel, California, USA by P.R. Krause, ERM-West, et al. SPE 157361 Frigg Cessation Project—Environmental Footprint and EIA Comparison by Steinar Nesse, Det Norske Veritas, et al. OTC 23512 Autonomous Inspection of Subsea Facilities—Gulf of Mexico Trials by D. McLeod, Lockheed Martin, et al.