BOEM has proposed firms use different instruments for decommissioning funding. (Image credit: Ramcreative)

US’ BOEM toughens decom funding rules

The US Bureau of Ocean Energy Management (BOEM) has proposed tightening the rules on how operators make financial provisions for decommissioning.

According to the proposal, fewer companies will be able to self-insure and decommissioning costs must be set aside using financial assurance bonds rather than surety bonds.

The bureau has published a draft of the rules in a paper called “Criteria to Determine Financial Ability to Carry Out Obligations” [http://www.boem.gov/Proposed-Criteria/]

The BOEM’s regional director will investigate owners’ “financial capacity, strength, stability, reliability and record of compliance” for “100% of the decommissioning liability for every lease … in which you hold an interest or for which you provide a guarantee”.

If firms are found to lack the necessary balance sheet to fulfil their obligations, they may be required to make “additional provisions”, which will be subject to BOEM approval.

The move is a response to concerns that decommissioning costs in the Gulf of Mexico are rising while leases are being sold on to smaller independent companies.

“By modernizing its risk management program, BOEM intends to create comprehensive procedures designed to decrease cost risks to taxpayers while providing industry flexibility to negotiate adaptive solutions and utilize tailored financial plans to meet their decommissioning financial assurance requirements,” the Bureau says on its website.

The BOEM’s proposals are published on its website for a 45-day review period.

Taylor Energy lobbies for decom refund

Taylor Energy, the former US oil independent oil producer, is lobbying for the release of $383 million from funds it set aside in 2008 to pay for clean-up work following the collapse and subsequent plugging and abandonment of its Mississippi Canyon 20-A platform in the mouth of the Mississippi.

The platform, located 11 miles off the coast of Louisiana, was toppled by a mudslide in the wake of Hurricane Ivan in 2004. This led to a lengthy campaign to drill intercept wells and P&A them along with the original wellheads.

To pay for the work, Taylor formed a $666 million trust fund. Now that nine intervention wells have been completed, pipelines have been removed and a subsea containment system installed, Taylor is arguing that the $432 million remaining in the trust should be released.

A memo sent by company to the US Coast Guard, Interior Department and Justice Department was recently made public. This argues that “Taylor Energy Co has successfully completed all the work it has been required to do”. Other completed tasks, such as intervention drilling at the site, cost less than estimated when the trust was established.

Taylor Energy is asking the federal government to return the balance, leaving a contingency reserve of $50 million for seven years.

Allseas delays giant vessel delivery to 2016

The arrival of Allseas’ twin-hulled Pioneering Spirit in the North Sea has been put back from summer 2015 to the first half of next year due to delayed deliveries from subcontractors.

The ship is the world’s largest platform installation and decommissioning vessel and was designed to undertake the decommissioning of Shell’s Brent platforms and carry out installation work on Statoil’s giant Johan Sverdrup field.

However, Allseas has announced that the installation and commissioning of the ship’s topside lifting system in the port of Rotterdam will be completed over the winter and tested by removing the topside of a platform in the Talisman’s Yme field in the Norwegian North Sea.

The company, which is doing most of the outfitting work itself, blamed the delay on late deliveries from its sub-contractors due to the unique nature of the lifting machinery.

The hull of the Pioneering Spirit was built in Korea by Daewoo. The vessel has been designed to decommission jackets and topsides which are too heavy to be handled using existing equipment.

Bibby completes Endeavour subsea retrieval

Subsea services provider Bibby Offshore has completed two multimillion pound decommissioning projects on the UK Continental Shelf (UKCS) situated 115 km east of Aberdeen, Scotland.

Bibby Offshore recovered subsea equipment including cross-over structures, umbilicals and protection mattresses from Endeavour Energy’s Renee and Rubie fields in the central North Sea.

The work was carried out using the Bibby Sapphire dive support vessel and the Olympic Ares construction support vessel.

“Production from the Renee and Rubie fields ceased in 2009 and, following a site survey we completed last October, we were contracted to be part of this extensive project,” Barry Macleod, the Managing Director of Bibby Offshore UKCS, said.

Derek Neilson, Managing Director of Endeavour Energy UK, said the operator established a strong working relationship with Bibby which “enhanced the effectiveness and efficiency throughout the programme and resulted in the safe and successful completion of the subsea facilities decommissioning work this year”.