UK's £15 billion well abandonment market need new technology

In a report published today (11 March 2009), Oil & Gas UK highlights the £15 billion market for services needed to abandon nearly 5,000 platform and subsea wells on the UK continental shelf (UKCS). The report, which was prepared by the Acteon company InterAct Activity Management Ltd (InterAct) with the help of Oil & Gas UK's well abandonment workgroup, also identified that existing technology will allow the abandonment of only two thirds of wells without the use of a rig. The rigless abandonment of the remaining one third will be reliant on the development of new technologies.

Paul Dymond, Oil & Gas UK's operations director, said: "Despite improved oil and gas recovery techniques delaying decommissioning in many cases, some projects are already going ahead, for example on the Miller, Brent and Indefatigable fields. This new report highlights the considerable opportunities presented by the decommissioning of North Sea infrastructure for suppliers to invest in the provision of innovative services and new technology. The industry needs to look very closely at how to position itself to grasp those opportunities."

Phil Chandler, senior petroleum engineer with InterAct, added: "The report estimates that 3,725 platform wells and 910 subsea wells in the UK offshore will need to be abandoned, the majority in the next 15 years. Existing technology will permit the rigless abandonment of two thirds of those wells, a method which is typically more cost effective than using a rig. However, the rigless abandonment of the remaining one third of wells will require the advancement of techniques such as well control and string tubular recovery."

Jules Schoenmakers of Shell, who chaired the well abandonment workgroup, said: "Many felt that a significant market opportunity for well abandonments on the UKCS exists. The study now quantifies this opportunity. Operators are looking for breakthrough technologies and new approaches in this emerging business. The size of the market appears large enough to support many businesses and teams of specialised well abandonment professionals for several decades."

Alongside the study evaluating opportunities in the well abandonment market, Oil & Gas UK has updated its guidelines on the considerations that need to be taken when suspending operations for a limited period of time and when finally abandoning a well. Both the guidelines and report are available free of charge to Oil & Gas UK forum members on the extranet or to non-members for a charge on the Oil & Gas UK website.

Mr Schoenmakers said: "The existing guidelines on well abandonment were published in 2005 and have been well-used. A workgroup comprising representatives from operators, contractors and the Health & Safety Executive (HSE) has now reviewed and re-written them with improved clarity and flow.

"The latest insights enabling efficient and sound well abandonments have been incorporated into the guidelines. They now clarify the requirement to squeeze perforations and advise on well construction in facilitating well abandonment. The guidance also reflects the key changes of single plug risk assessment and, with additional diagrams, is now easier to use."

Oil & Gas UK is committed to sharpening the industry's focus on the technologies and capabilities that will be needed for the safe decommissioning of oil and gas infrastructure in the UK. For example, in 2008 it held events with the Industry Technology Facilitator (ITF) to help operators and contractors develop a mutual understanding of the goods and services that will be required in the course of decommissioning and the contracting strategies needed to deliver them.

In 2009, Oil & Gas UK will hold a conference to actively improve the industry's readiness for decommissioning on 26 and 27 May.