Credit: Curra Heeshutter

North Sea basins face “domino" decommissioning threat

A surge in decommissioning activity triggered by the sustained fall in oil prices may prevent the recovery of up to 2 billion barrels of North Sea oil, industry chiefs warned.

The news comes after Fairfield Oil announced in mid-June that it was to decommission its Dunlin Alpha platform, 300 miles northeast of Aberdeen. The company cited the low oil price and “challenging operational conditions” to explain its decision.

The move will raise the production costs of other fields using Dunlin Alpha’s infrastructure, and will therefore make them more likely to halt production sooner that they would otherwise. This will put in doubt the target for recovering 2 billion barrels with a current market price of $120 billion that was set by Sir Ian Wood’s strategic review of the North Sea, published in February last year.

Gunnar Olsen, the business development director of Total E&P UK, told a Society of Petroleum Engineers conference: “Dunlin will shut five years before plan, which will mean all the other fields going into the Sullom Voe oil terminal will have increased operating costs. The domino effect is now a significant challenge. If some of these fields are shut in, it will affect the whole basin."

This domino effect is particularly significant in the northern North Sea, where many fields share pipeline and terminal infrastructure. However, many fields in the south are also under stress. Andy Bevington, director of UK operated assets at Centrica, told the conference that Centrica's Audrey, Annabel, Ann and Alison fields were collectively making an annual loss of $39 million.

The dismantling of Dunlin Alpha is expected to cost about $600 million. The field, which was developed by Royal Dutch Shell in the 1970s was forecast to have a production life of 25 years, but was actually operated for 37 years before being shut in last month.

Alabama to complete world’s most extensive rigs-to-reef program

Alabama is to gain the largest artificial reef programs in the world when three platforms from the Gulf of Mexico join the Viosca Knoll 385, some 40 miles off the coast of Dauphin Island.

Chris Blankenship, the director of Alabama Marine Resources Division, told local media that agreements were in place to add a deepwater platform from Shell’s Viosca Knoll 780 field, off the coast of Louisiana, and another positioned in the Mississippi Sound.

The first Viosca Knoll structure was positioned in May by cutting its legs 60 feet below the waterline and laying the jacket beside them. The Viosca Knoll 780 platform, which is presently in 737 ft of water, will be cut 90 feet below the surface after which the jacket will be towed to the Alabama reef site.

The Mississippi platform will be cut 15ft below the mud line and taken in large pieces to the reef zones.

A third rig, located at Main Pass 255 rig is located 54 miles off the coast of Louisiana in 333 ft of water. The top section will be cut 105 feet below the water line and set down adjacent to the base.

For the rigs in federal waters, the Alabama Marine Division has to co-ordinate with the Bureau of Safety and Environmental Enforcement, the Corps of Engineers, the Coast Guard and National Oceanic and Atmospheric Administration to gain permits to turn the decommissioned rigs into reefs.

Blankenship said. “We’re waiting for them to be decommissioned. The paperwork is done. We’re just waiting on the companies now.”

In addition to donating the rigs, operators are also required to donate money saved by not disposing of the rigs onshore to the Alabama Artificial Reef Program.

DECC approves Shell’s Brent Delta topside project

The UK's Department of Energy & Climate Change (DECC) has approved Shell's Brent Delta topside decommissioning program, the company said July 6.

Shell’s program recommends that the 24,200 tons topside of the platform is removed in one piece by a heavy-lift dedicated vessel.

According to Shell, the single lift technique will substantially reduce the risk, cost and environmental impact of the operation.

The topside will be taken to Teesside-based decommissioning company Able UK, where 97% of the material will be reused or recycled.

Production at Brent Delta ceased in 2011. Production was stopped at Brent Alpha and Bravo in November 2014, while production continues at Brent Charlie.

Maersk Drilling to decommission Endurer rig

Copenhagen-based Maersk Drilling is to decommission the Maersk Endurer rig and the facility will be transported to Zhoushan Changhong International Ship Recycling yard, the company said July 14.

It will take approximately 15 weeks to recycle the rig, Maersk said.

Built in 1984, the Endurer is Maersk Drilling’s oldest rig.

A jack-up rig fully equipped for high pressure/high temperature drilling (HP/HT), Maersk Endurer has operated in the North Sea, the Egyptian Mediterranean and West Africa, and was most recently working offshore Cameroon.

Peterson, Veolia to build new North Sea facility at Great Yarmouth

Energy logistics provider Peterson and water and waste firm Veolia have announced a £1 million investment in the development of a new decommissioning facility in Great Yarmouth, a port town in England.

The new site will provide operators in the Southern North Sea with access to a full service decommissioning facility, Veolia said in a statement.

The facility, which will be situated in the western terminal of the Outer Harbour at Great Yarmouth Port, will enable topside, jackets and subsea equipment to be offloaded for dismantling and recycling, the company said.

GMS secures its first decommissioning contract

Offshore contractor Gulf Marine Services (GMS) has contracted one of its Large Class vessels for decommissioning work in the North Sea, the first decommissioning activity for the group.

"The vessel, which has been supporting well service and maintenance work in the Southern North Sea for an international oil company since Q3 2012, was scheduled to continue that work until Q1 2016 (with a further six-month option thereafter exercisable by the client)," the company said in a statement.

"GMS and the client have now agreed that the vessel will move to support the client's decommissioning work, also in the Southern North Sea, in summer 2015. The revised contract has a committed term through to Q1 2016 and an option period that has been extended from six months to twelve months. The vessel will proceed directly from the current project this summer to the decommissioning work. The day rates for this charter are in line with guidance previously given for Large Class vessels," it said.