Credit: TebNad

As decommissioning rises to the top of companies’ concerns, frustration is growing among operators at the slow pace of ground-breaking solutions being offered by service providers.

Tim Croucher, the Norway Decommissioning Manager of ConocoPhillips, told Decom World: “What’s disappointing is we’ve been to the traditional suppliers; we’ve been talking to the big three service companies – Halliburton, Schlumberger and Baker Hughes – and we’ve asked them to consider solutions, and to be honest I’m extremely disappointed with the level of interest and the level of feedback we got.”

Increased obligations and reduced revenue

Operators are facing a squeeze between lower revenues and rapidly rising prices for decommissioning work. UK Oil and Gas has estimated that the total spend on decommissioning projects in the UK Continental Shelf alone is expected to reach $44 billion by 2040.

Croucher said operators were beginning to wake up to the scale of their obligations and this is causing them to push their suppliers for solutions that would halve the cost of decommissioning. “We want evolutionary solutions, such as better quality cement, better cement placement capability, better ability to remove steel from well bores, the opportunity to blow bigger holes in the casing to put better cement behind it,” he said.

“But that’s less than the half of it. What we really want is for the market to focus on is the revolutionary stuff: to achieve the goal of providing the right permanent barriers in the well but doing it in a completely different way,” Croucher added.

The good news for the industry is that the way it is operating now is so inefficient that the opportunity is clearly there to make large scale savings if service companies’ upgrade their P&A toolkits.

“At present, it costs as much to P&A a well as it does to drill it in the first place, and the reason it’s so expensive is that we’re still using heavy-duty 15k jack-ups to deal with small non-productive wells. Xanadu would be to P&A without using a rig – to go through the Christmas tree and the tubing and still create acceptable containment barriers, but that will require a dramatically different approach to achieving barriers,” Croucher said.

Searching outside of the industry

Operators are hoping to find technological solutions from other industries. Croucher said that many operators have been employing technology search companies that specialise in trawling the R&D output of unrelated industries and working out if they can be re-applied to oil and gas.

Croucher mentioned the latest applications of x-rays and MRI scanning in the medical industry, but other fruitful fields are military and aerospace research.

He also mentioned that one company had developed the ability to insert a plasma lance into a well bore. GA Drilling, a Bratislava-based firm, has pioneered this kind of cutting and reaming for use in the oil and gas industry.

“What we’re saying is that if you can introduce enough energy down into the well to remove that steel in a far more efficient way then you can achieve that removal in a far more cost effective way. If you want to cut or melt or erode steel or concrete at a very efficient rate, there are technologies out there that can do that,” Croucher said.

Parallel developments

The size of P&A market is attracting companies from outside the industry to approach operators with their bespoke technologies.

“The firms that are coming to us are highly ambitious and highly optimistic,” Croucher said.

“Some of those companies have given estimates of two-to three years to develop a groundbreaking, game-changing technology; I’m respectfully sceptical, so we’re working on different technologies and methodologies in parallel because there’s no guarantee that these off-the-wall solutions will ever be successful. There are huge barriers to overcome before you can take a technology and stick it down an oil well to achieve something that it was never designed to do in the first place,” Croucher added.

How much longer?

According to Croucher, many companies in the industry have been slow to appreciate the need for new kinds of technology to create barriers in wellbores. He said that until mid-2014 there was no sign of a breakthrough.

“We’ve since found out that there were a couple of companies working on a couple of things in stealth mode, but generally up until six months ago there was very little interest and energy and signs of groundbreaking changes around P&A,” Croucher said.

“That has now changed. Over the period there is some clear evidence that there are some opportunities out there that may have the potential to give us the change that we really want and if that has happened over a nine month period then I’m optimistic that over the next year or so we will get somewhere,” Croucher added.

Croucher went on to state that this was an area where operators ought to pool their efforts.

“We have an open forum under the Norway Oil and Gas Association and there’s a general awareness that in the decommissioning field that there’s nothing to be gained by competitive advantage – in Norway 78% of decommissioning costs you can write off against tax so ultimately the tax payer is the beneficiary – so we’re pushing very hard for open collaboration,” Croucher explained.