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Best practice guide to running asset life extension projects in Norway

Lifecycle stage
Late-Life

graph showing oil resources in Norway

NORWEGIAN OIL AND GAS RECOMMENDED GUIDELINES

The objective of guideline 122, ‘The Assessment and Documentation of Service Life Extension of Facilities’, as set out by the Norwegian Oil and Gas Association, gives guidance to the process of evaluating, documenting and finding optimum resource exploitation in the life extension of facilities. In this article, we will concentrate on four key areas:

  • Requirements to carry out the project
  • The life extension period
  • The use of the facilities
  • Exploiting the renewed facility

Requirements to carry out the project

Before asset life extension can begin, consent must be obtained from the Petroleum Safety Authority (PSA) and the Norwegian Petroleum Directorate (NPD). All documentation of the assessments and methodologies used to approach the decision to extend the life of the asset should be stored and be available to both authority bodies to ensure plans are successfully achieved.

While the PSA is an independent government regulator that is responsible for safety, emergency preparedness and working environments in the Norwegian petroleum industry, the NPD is responsible for ensuring the greatest possible value is extracted from Norwegian waters through efficient and responsible resource management.

The PSA should receive applications for asset life extension one year before the consent period expires and must include input from employee representative in the life extension application process.

The NPD, too, require the asset life extension application for consent to be submitted at least 12 months before the consent period expires. The consent is required to ensure that the resource-related terms and pre-conditions provided in the original installation, operational and decommissioning plans for the asset, have been fulfilled.

The life extension period

As set out in the original installation and operational plans, an asset’s life will be determined by the shortest design life period. Any life extension period, beyond its design life, should be based upon the long-term ambitions of the operator.

However, the life extension period given by the authorities in the first place, are being linked to the duration of the production license. The PSA and NPD have the ability to omit performing gap analysis and life extension assessments if the following conditions are satisfied:

  • Period applied for is short
  • Facilities are relatively simple
  • Facilities are already built by the current version of the Facilities Regulation
  • The application for a new consent period is within the design life of the facilities

Use of facilities

The decision to accept an operator’s project relies heavily on the plans for the facility during the proposed life extension period, as well as any changes to the operational conditions that are to be made.

The potential changes that influence the degradation of barriers, for example, shall be identified and used as a basis to assess the asset’s life extension. The Norwegian Oil and Gas Association have pulled together a list of considerations, based on their experience, which operators should look out for to get projects accepted sooner:

  • The likelihood of sea bottom subsidence in the case of reservoir depletion
  • Changed environmental conditions and updated methods to calculate loading
  • The potential changes in fluid compositions and the potential for micro bacterial activity
  • Changes to the original design assumptions.

These circumstances, amongst many others, need to be considered and added to the proposal, if an operator wishes to extend the life of an asset.

Exploiting the renewed facility

As mentioned at the top of the article, the Norwegian government states that renewal and life extension of existing assets, has been one of many factors why there have been reduced operating costs in the region, subsequently contributing to three years of continued output growth.

Within asset life extension applications, operators submitting to NPD need to demonstrate that the facilities are well suited for the optimal production of resources and other services it is set to carry out. Operators also need to:

  • Perform a cost-benefit analysis of the future operation it will assume
  • Clearly outline the use of facilities including the operation and maintenance costs
  • Identify new technology and techniques to improve production and recovery

WHERE CLAXTON CAN HELP YOU

With stringent regulation from the PSA and NPD to pass, as well as ensuring the life extension project is worth the initial time and investment made, the Claxton team can help with:

  • Surveys and concept studies looking at the integrity of the conductors and platform guides
  • Operators and other third parties involved to simplify the planning and execution phase of what can be a demanding process
  • Carry out asset analysis and determine life extension solutions

Photo and Resource Credit: Norsk Petroleum

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