Express Energy's Tom Slocum describes how his company is gearing up for the expected uplift in Gulf of Mexico decommissioning.
“2012 was one of the toughest years in decommissioning and well abandonment I've seen in a decade,” says Tom Slocum.
Vice president of well intervention and decommissioning at Houston-based Express Energy Services, Slocum said revenues and activities were down substantially last year due to a backlog in permitting.
In an interview with DecomWorld, Slocum ascribed the backlog to the impact of the Deepwater Moratorium and a lack of available resources at the Bureau of Safety & Environmental Enforcement (BSEE).
“Essentially, the permitting process was minimal during the first quarter and when it did start up again it was very slow. Many projects were delayed or essentially deferred to a later date in 2013.”
Since 2010, after the formation of BSEE, and the “Idle Iron” NTL (Notice To Leasees), the predicted surge in decommissioning has been slow in developing. But now, said Slocum, the stage seems to be set for a significant rebound in activity.
Only 23 platforms were documented as removed in OCS waters in the GOM in 2012. This year, he says, there are 359 platforms reportedly scheduled for decommissioning.
“The Idle Iron guidance came out in 2010 and decommissioning activity levels were pushed back approximately two and half to three years, so I think we're going to start seeing some additional vigorous activity,” he said, adding that new engineers and inspectors have been hired by BSEE.
“Of course the activity level will depend on budgets, workloads and available resources,” he added, “so I doubt that all 359 structures will be decommissioned and removed this year. We're looking forward to a much better year, but we're also looking at increased activity over the next three to five years.
“The BSEE review and approval process has been more time consuming and intensive with the new rules and regulations being implemented and with a shortage of trained resources,” he said.
Across the board, major operators and larger independents are complying with the new regulatory environment by training people and preplanning.
“But,” he says, “the new regulatory environment is tougher on the smaller independent companies and sometimes they postpone abandonments until they either sell the asset or ultimately have no other choice but to comply with the time limits of the Idle Iron regulations.”
Meanwhile, the company's investment in training is showing returns, Slocum says. “Express University” opened in February 2012, with 8,000 square feet of classroom and office space and 10,000 square feet of training area, as well as on-site dormitories for 48 students and computer labs.
The facility teaches decom-specific skills like cementing, electric line training, core classes, and casing running and removal.
“We provide extensive training, a career path, and a safe working environment and culture. New hires now see a pathway and a career ladder they can climb for advancement and a commitment to a safe working environment.
“Two years ago offshore crew staff turnover was 60 plus per cent. Today it's less than 20 per cent. As a result of our safety and training initiatives, our safety has improved tremendously along with attracting and retaining highly trained personnel and quality new hires.”
Slocum says Express spends several million dollars every year in research and development, training and upgrading its Express University.
The company has plans to drill test wells and to install a drilling rig at Express University for training.
“There's definitely a high cost associated with our initiatives and vision,” Slocum says, “but if we improve our employees and safety culture then we can deliver a better quality product to our clients, to our employees, and to our company.”
Express has added new equipment to offer greater integration of well abandonment and decommissioning. A new dual-stage cutting and jacking work station can be erected on the platform to perform all operations on a plug and abandonment: from well-bore plugging to cutting and removing the casing and tubing, he says.
This piece of equipment has separate modules for all aspects of the campaign and a high degree of automation, allowing one person to control the operation of cutting, pulling and laying down the casing.
Remote cameras give the operator visual contact at all times. New and integrated tools include diamond wire cutters, swivels, drills, tongs, and an HPU.
While 2012 had its challenges, Express did manage to set a record.
“We aided Cross Solutions in performing the deepest, riserless subsea abandonment in the Gulf of Mexico to date,” Slocum says. It was a two-month campaign from a Dynamically Positioned (DP) II vessel that included several wellbore plug and abandonments and a subsea riserless well intervention on a live well in 3,278 feet of open water.
“We thought we had a world record there for a while, but it turns out somebody else beat us,” he says. “Never mind, there’s always the next subsea opportunity somewhere waiting for another record intervention.”
Photo: Express Energy's new dual-stage cutting and jacking work station can be erected on the platform to perform all operations on a plug and abandonment
Operators and service providers are cutting staff and freezing investment in a dash to save money as oil prices continue their free-fall, a senior UK industry figure has warned.
Operators in the US have spoken out against burdensome financial guarantees, or bonds, required by the government to cover future costs of decommissioning in the Gulf of Mexico and elsewhere.
CNR International, the operator now decommissioning the North Sea’s Murchison platform, has said its focus would shift now to west Africa because UK government fiscal reforms relating to the North Sea are too little, too late.