Decommissioning insight 2016: The future for the Norwegian continental shelf
NORWEGIAN PETROLEUM ACT
For readers that are unaware, the Norwegian Petroleum Act regulates the shutdown and disposal of decommissioning activity on the Continental Shelf. Enforced by the Norwegian Ministry of Petroleum and Energy, operators have between two to five years prior to an asset’s ceasing in production to address a decommissioning plan. The plan includes detail of the required work, plus, an environmental impact assessment and public consultation too.
Together with the Norwegian Petroleum Directorate, the Ministry of Petroleum and Energy make the final decision on the decommissioning project. While forecasts are always subject to change, the fact that operators are submitting plans through the official routes already shows the appetite to begin decommissioning projects soon.
DECOMMISSIONING ACTIVITY – A SNAPSHOT
- 800 of the 3,800 production, injection and monitoring wells that will require decommissioning, have already been plug and abandoned
- Another 18 wells will be plug and abandoned in 2016, following 33 the previous year
- 2021 is expected to be the most active year until 2024 for P&As.
- 26 pipelines accumulating to over 360 kilometres will be made safe up until 2024 in preparation for decommissioning
- The Norwegian North Sea will make up the majority of the activity in the region with the Norwegian Sea and the Barents Sea having little pipeline decommissioning activity
- While 2020 will see the most pipelines made safe (seven) until 2024, 2023 will see the largest amount of pipeline in kilometres (85 km) decommissioned
Facilities and topside preparation
- 12 facilities are set to be made safe up until 2024 and 14 facilities will undergo topside preparation – both can be completed several years prior to full decommissioning
- Activity is set to peak in 2023 when over 40 modules for facilities and topsides are completed
- While initial statistics show a rise in fall in activity over the next eight years, due to the closely aligned activities it is anticipated that activity will smooth out as forecasts are revisited
Topside, substructure and subsea infrastructure removals
- 105,275 tonnes of topside, 59,055 tonnes of substructure and 2,520 tonnes of subsea infrastructure are set to be removed over the next eight years
- Following work on wells, pipelines and platforms, it will come as no surprise that 2024 will see increased activity in removals with over 40,000 tonnes earmarked to be removed.
- These removals include smaller normally unmanned installations (NUIs) weighing around 3,000 tonnes
PROMISING DECOMMISSIONING FUTURE
The Norwegian oil and gas industry is at an earlier stage of maturity than that of the UKCS, due to production coming on stream at a later date. Despite this, the region is planning thoroughly towards their decommissioning requirements as highlighted in Oil & Gas UK’s latest report.
For the decommissioning industry, this is yet another sign of the growing need for help and expertise to return the seabed back to its natural state. While these projects can take up to five years to process, this report is evidence of the opportunity available not just in Norway and the UK, but around the world too.
Here at Claxton Engineering, we devised and ran a questionnaire for the industry to get their opinions on the future of the decommissioning market. As well as sharing their thoughts on how they thought Governments could help the industry further, industry experts shared their opinions on forecasted cost changes and how the skills gap could be solved.
Photo Credit: Flickr
Claxton's Decommissioning Industry Questionnaire Report
To monitor the industry and find out the opinions of experts in the field, Claxton conducted a market survey in late 2015 and now the results are available here.