Decommissioning in The North Sea - Demand Vs Capacity - Low-Res
Decommissioning in The North Sea - Demand Vs Capacity - Low-Res
Decommissioning in The North Sea - Demand Vs Capacity - Low-Res
2
Boskalis
Contents
Executive Summary
1 Introduction
57
7.2 Activity
58
60
63
65
7.1 Overview
67
18
7.2 Activity
68
19
70
2.3 Programme
18
7.4 Analysis
74
Market Forecasts
23
24
4
5
10
14
8 People
77
30
81
39
Appendix A: References
87
Well Abandonment
45
91
5.1 Overview
47
Appendix C: Resources
95
5.2 Activity
48
50
52
Contents
Executive Summary
The O&G Decommissioning sector offers a significant
socio-economic opportunity in terms of job creation
in the Scottish, UK and European supply chains,
and an opportunity for North Sea based firms to
export expertise to other parts of the world. This
report, prepared by Arup and commissioned by
Decom North Sea (DNS) and Scottish Enterprise,
seeks to provide an overview of the scale and
nature of the decommissioning market in the next
decade highlighting areas where there are potential
bottlenecks in the supply chain.
There is a need to continue to develop the existing
O&G and decommissioning supply chain to
meet future increases in demand associated with
Decommissioning in the North Sea. This offers
a significant opportunity to the supply chain in a
growth market, and will require a range of highly
skilled and high value capability. A range of activities
will require innovation in terms of technical and
management approaches to drive down the costs
of decommissioning. There are other areas that
will need significant growth in capacity to meet the
demands of the market.
Executive Summary
Executive Summary
1.0 Introduction
The Scope
The Opportunity
The Contributors
The Objectives
CNR International
Halliburton
Aker Solutions
Marathon Oil
Royal Boskalis Westminster N.V.
Seaway Heavy-lifting
Weatherford International
Wood Group
Regulation
A range of international and national legislations
impact the North Sea Decommissioning Sector.
Of these, OSPAR is particularly significant in terms
of influencing decommissioning approach.
OSPAR Decision 98/3 prohibits leaving offshore
installations wholly or partly in place unless further
derogation are granted. However, it provides
certain derogations to concrete structures and the
footing of large steel jackets weighing more than
10,000 tonnes, from the fundamental principle
that decommissioning should result in full removal
of the installation. Derogation is not automatically
available and is subject to a detailed assessment
and consultation procedure to determine if there are
significant reasons to allow the installation (or part
thereof) to remain in situ. Furthermore, no derogation
is available to steel installations constructed after 9
February 1999 (being the date that Decision 98/3
came into force).
As a result of the OSPAR ruling, the North Sea will
lead global decommissioning practice from a total
removal perspective.
Interdependent Systems
Individual offshore O&G assets, be they platforms,
pipelines, wells or utilities, often interact with and
are interdependent upon one another to a greater
or lesser degree. While these can introduce
additional complexities to the decommissioning
process, they can offer opportunities to increase
the decommissioning process efficiency through
integrated management of systems and processes.
Number of Installations
400
350
300
250
200
150
100
50
0
The Installations
Denmark
Netherlands
UK
Norway
Country
Fixed Steel
Floating Concrete
Floating Steel
Others
Source: OSPAR[4]
Others 3%
Concrete Gravity Based 4%
Floating Steel 11%
Floating Concrete >1%
The Age
Source: OSPAR[4]
Average Age
26
26
25
24
24
23
24
22
21
22
20
19
Denmark
Netherlands
Country
10
Norway
UK
Source: OSPAR[4]
Decommissioning
Only 12% (88) of North
Sea installations have been
decommissioned to date,
reflecting the nascent nature of
the decommissioning market[4].
This includes 55 fixed steel
installations, 22 floating steel,
3 concrete gravity base and 7
others.
Of the 88 installations that have
been decommissioned, only
seven have had derogations
granted to allow infrastructure
to remain in place. These have
been associated with installations
in NW Hutton, Frigg and
Ekofisk. These were all concrete
gravity base infrastructure with
substructures over 200,000
tonnes. The only exception
NW Hutton was a fixed steel
installation where the jacket and
topside were removed and the
footings of the jacket were left in
situ.
11
The Geographies
UKCS Southern North Sea, Danish and Dutch Sectors are
generally characterised by comparatively shallow water (less
than 60 meters), relatively moderate metocean conditions,
and exploit gas resources. They have comparatively light
installations[4].
Substructure
1,687,000 tonnes
NORWAY
Topside
985,000 tonnes
Substructure
675,000 tonnes
NETHERLANDS
Topside
215,000 tonnes
10
Substructure
127,000 tonnes
9
8
DENMARK
7
6
Topside
155,000 tonnes
5
4
3
Substructure
87,000 tonnes
2
1
0
Fixed Steel
Floating
Concrete
Floating
Steel
Topside
Concrete
Gravity Based
Others
Subsea Steel
Substructure
Source: OPSAR[4]
12
Source: OPSAR[4]
13
Well Abandonment
Running, Make Safe & Preperation
Subsea & Site Remediation
Topsides & Substructure Recycling
Operator Project Management & Monitoring
Topside & Substructure Removal
Topsides
Several methods are used for removing installations. The main classifications include:
Piece Small - the installation is dismantled offshore by cutting or dismantling into small sections that are
shipped onshore in containers.
Heavy-lift - whole modules are removed in the reverse of the installation sequence and loaded on to flat-top
barges or a crane vessel for transport to the decommissioning yard.
Reverse Float Over - the topside is removed in an approach that is a reversal of a float over installation
process. Here, the whole topside is cut from the jacket and taken ashore in one piece, with the installation
partly floating during transport.
Single Lift - the topsides and/or jacket are removed in one piece and transported to the decommissioning
yard.
14
Substructures
The main classification of substructures includes:
Steel Installations
Wells
Plugging & Abandonment (P&A) is the process by
which a well is closed permanently, usually after
either logs determine there is insufficient hydrocarbon
potential to develop the well, or after production has
ceased. Abandonment must be done in a way that
protects the downhole and surface environment in
perpetuity.
Pipelines
OSPAR have not made any recommendation for
pipelines, and therefore there is no obligation to
remove them. Agreement must be obtained from
the regulating authority on the appropriate approach
through consideration in a comparative assessment.
Key issues to be considered are pipeline cleanliness,
stability, extent of burial and impact on other users of
the sea.
There are diverging precedents in the North Sea.
Indeed, some pipelines have been decommissioned
in situ, while others have been removed to shore.
Generally, the smaller pipelines which can be more
easily removed without significantly disturbing the
seabed are recovered. O&GUK have produced
guidelines on the decommissioning of pipelines.
15
Boskalis
16
17
18
Facilities / Pipelines
Making Safe
Topsides Preparation
Well
Abandonment
Running, Making
Safe & Preparation
Topsides Removal
Substructure Removal
Topside &
Substructure
Removal
Subsea Infrastructure
Site Remediation
Topsides and
Substructure Recycling
Monitoring
Topsides &
Substructure Reuse
& Recycling
Arup
Resource Breakdown Structure
19
20
2.3 Programme
The decommissioning programme commences with the management of the asset during late life, and lasts all the
way to the monitoring of the seabed once the asset has been decommissioned. The diagram below shows the
RBS activities in a programme format.
The programme duration depends on the technical complexity of the project as well as a range of commercial
considerations. A typical project is often carried out in parts with several periods of inactivity, rather than a
continuous activity flow and so individual project programmes can vary significantly.
Hydrocarbon
Free
Well Abandonment
Facilities, Pipelines
Making Safe
Topside
Preparation
Topside
Removal
Substructure
Removal
CoP
Subsea Infrastructure
Site Remediation
Topsides & Substructure
Reuse or Recycling
Monitoring
21
22
23
2,500
2,000
1,500
1,000
500
0
2014
2015
2016
2017
2018
2019
Mackay 2013
Norway
2020
2021
2022
Mackay 2013
Denmark & Netherlands
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
2014
2015
2016
2017
2018
2019
Mackay 2013
Norway
2020
2021
2022
Mackay 2013
Denmark & Netherlands
24
25
2,000
Annual Average
OGUK Insight 2013 Report
Kemp 2014
Mackay 2013
Source: Oil & Gas UK[1][6],
Prof. Kemp[2] Mackay Consultants[3]
Overall Average
2,500
2,000
1,500
1,000
500
2014
2015
2016
2017
2018
2019
2020
2021
Kemp 2014
Mackay 2013
2022
26
5%
Topside &
Substructure Removal
8%
Well Abandonment
22%
46%
18%
Running, Making Safe
& Preparation
100%
1,600
90%
1,400
80%
1,200
70%
60%
1,000
50%
800
40%
600
30%
400
20%
200
10%
0%
2014
2015
2016
2017
2018
2019
2020
2021
2022
Operator Project
Management & Monitoring
Well Abandonment
Total Expenditure
Source: Adapted from Oil & Gas UK[1]
27
2014
2015
2017
2016
2018
2019
2020
2021
2022
Operator Project
Management & Monitoring
Well Abandonment
2013
2014
28
2015
2016
NOGA
2017
2018
2019
2020
2021
2022
Mackay 2013
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
29
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
Denmark
Nertherlands
Norway
Steel Activity
Source: OSPAR[4]
400
350
300
250
200
150
100
50
0
<1,600
1,600-4,000
4,000-8,000
8,000-16,000 16,000-58,000
>58,000
Weight (Te)
South (Refers to areas
below 55 degrees LAT)
UK
400
350
300
250
200
150
100
50
0
<1,600
1,600-4,000
4,000-8,000
8,000-16,000 16,000-58,000
>58,000
Weight (Te)
South (Refers to areas
below 55 degrees LAT)
30
350
300
250
200
150
100
50
0
2014 to 2019
inc. Floating
UK (North - Refers
to areas above 55
degrees LAT)
2014 to 2019
excl. Floating
Norway
2020 Onwards
inc. Floating
2020 Onwards
excl. Floating
UK (South Refers
to areas below 55
degrees LAT)
All Others
31
Well Abandonment
Platforms vs Subsea
Rigs vs Rigless
32
Activity
UK
Netherlands
Norway
550
Denmark
2330
5000
375
Wells to be
Decommissioned
in the UKCS (2014 - 2022)
Activity in UKCS
It is estimated that there are close to 5,000
wells requiring abandonment in the UKCS
of which around 18% (more than 800) will
require abandonment in the next
decade[9], [1]. Approximately 80% of all wells
in the UKCS are associated with a platform,
but the next decade will see a proportionately
larger number of subsea wells to platform
wells being abandoned, compared to the long
term[9].
Subsea
Wells
910
Subsea
Wells
258
Platform Wells
552
Platform Wells
3725
Number of Wells
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Subsea Wells
Completed NNS
Well type
Suspended NNS
Platform Wells
33
6%
9%
Group 4 - Rigless
19%
66%
Subsea
Wells
Platform
Wells
500
1000
1500
2000
2500
3000
3500
4000
Group 4 - Rigless
Duration (Years)
10.00
8.00
6.00
4.00
2.00
0.00
Group 1
Rig Required
Group 2 & 3
uture Rigless
F
Group 4
Rigless
Adandonment Method
Platform Wells Total Duration
Group 5
Plugged Wellbore
Requiring Annulus
Plugs
34
Activity in Norway
Activity in Netherlands
Activity in Denmark
There are nearly 380 active wells in Danish waters[12].
Denmark has been focusing on the P&A of
suspended wells which has resulted in only a very
small number remaining suspended, all of which have
P&A plans approved by the Danish Energy Agency
(DEA). Across the Danish North Sea, only 3 subsea
wells exist with all remaining wells being platform
based.
The nature of the Danish Sector water depths means
that the wells are likely to be all in shallower waters
requiring intervention by jack-up vessels rather than
semi-submersible vessels or drill ships.
Activity in Denmark is likely to be more biased
towards rigless approaches than the overall UK profile
due to the low number of subsea wells. However,
the spend profiles combined with the proportion of
infrastructure suggests that activity will represent less
than 10% of the level occurring in the UKCS.
35
Published Plans
There is a paucity of published data on decommissioning dates from operators. Data published by OSPAR and
the North Sea regulators identifies a total of 32 installations likely to cease production and/or be removed in the
coming decade [4], [14], [15], [16]. These include 29 fixed steel installations and 3 concrete gravity base. 67% of the
platforms are located in the deeper and more exposed waters in the northern areas of the North Sea.
UK
Norway
Denmark
Netherlands
Miller
Brent A
Brent B
Brent C
Brent D
Goldeneye
Kittiwake A
Thames AV
Thames AR
Thames AP
Brae A
Brae B
Brae East
Murchison
Little Dotty
Big Dotty
Albuskjell F
Edda
Ekofisk A
Ekofisk G
Ekofisk S
H-7
Hod
Huldra
Valhall PCP
Vest EkoFisk
YME MOPUStor
Cecilie
Dagmar
Rolf
Svend
Q8-B
K10-B
1,000,000
100,000
10,000
1000
100
100
1000
10,000
100,000
1,000,000
Fixed Steel
Source: OSPAR[4], NPD[14], DEA[15], DECC[16]
36
Number of Topsides
8
7
6
5
4
3
2
1
0
<1,600
1,600-4,000
4,000-8,000
8,000-16,000
16,000-58,000
Weight (Te)
South
North
Source: OSPAR[4]
Number of Substructures
8
7
6
5
4
3
2
1
0
<1,600
1,600-4,000
4,000-8,000
8,000-16,000
16,000-58,000
Weight (Te)
South
North
Source: OSPAR[4]
37
38
39
Resource
Breakdown
Elements
Critical Supply
Chain Elements
Operator Project
Management &
Monitoring
None
Considered
Critical
Well
Abandonment
Drilling Rigs
or Rigless
Alternatives
Running
Making Safe &
Preparation
None
Considered
Critical
Topside &
Substructure
Removal
Removal
Vessels
None
Considered
Critical
Topsides &
Substructure
Reuse &
Recycling
Ports, Harbours
and Yards
Generic Critical
Supply Chain
Elements
Engineering
Skills
Operational
Skills
40
Other Resources
There are a significant number of other resources
associated with the decommissioning processes
which are detailed in Appendix C. These resources
offer a significant opportunity to the supply chain
as the market grows. They will require a breadth of
highly skilled and high value capacity and capability.
A range of activities will require innovation in terms
of technical and management approaches to drive
down the costs of decommissioning. Examples
include development in cutting tools, or improved
logistics management of offshore operations. There
are other areas that will need significant growth in
capacity to meet the demands of the market, such as
a growth in survey capability or support vessels.
There will undoubtedly be constraints in supply of
many of these resources depending on the level of
market demand. However these areas are of lower
capital investment and lead time when compared
to the aspects considered as critical supply chain
elements. The supply chain is more likely to be able
to naturally respond to these opportunities without
any market intervention. As such, although they are
considered as significant opportunities, they are not
assessed in detail as part of this exercise.
A health check of the four critical supply chain
elements identified above is provided in Chapters
5 to 9 where each element is considered within the
context of the expected activity and in light of current
capacity. Engineering and operational skills are
considered separately in Chapter 4, as these skills
are somewhat transferrable across the RBS.
41
42
43
Well Abandonment
Skills
44
Engineering (P&A)
Operations Support
Infrastructure and
Equipment
Supply Chain
Rigs
Drilling Contractors
Rigless Solution
Vessel Operators
Transport Vessels
Rig/Rigless Contractors
Waste Management
Abandonment Materials,
Expanding Cement,
Resins, Silicone Rubber
Well Abandonment
5.1 Overview
There are over 8,200 active or suspended wells
in the North Sea, all of which will eventually need
to be plugged and abandoned[9] [10] [11] [12] [13]. In the
UKCS it is estimated that over 800 wells will be
abandoned in the next decade[9]. An extrapolation
of data considering infrastructure and expected
spend in Denmark, Norway and the Netherlands
suggests that there could be up to a 70% increase
in activity from the other Sectors. The majority of this
additional activity will be in the deeper waters of the
northern areas of the North Sea.
The number of working years required to abandon
wells in the UKCS over the next decade have been
estimated. It is predicted there are;
4.5 years which require mobile drilling rigs such
as jack-up vessel, semi-submersible or drill
ship.
Approximately 10 years which require platform
rigs.
Approximately 7.5 years which require rigless
platform solutions.
46%
600
500
400
300
200
100
0
2014 2015 2016 2017 2018 2019 2020 2021 2022
45
5.2 Activity
Well P&A can be done using mobile rigs mounted
on a vessel, platform rigs or rigless solutions on a
lightweight intervention vessel. These resources all
consider critical supply chain elements.
46
550
Denmark
2330
5000
375
Wells to be Decommissioned
in the UKCS (2014 - 2022)
Subsea
Wells
258
Platform Wells
552
Platform Wells
3725
Platform
Wells Total
Duration
20
40
60
80
100
120
140
160
Working Years
Group 1 - Rig Required
Group 4 - Rigless
47
Number of Wells
600
500
400
300
200
100
0
Pre 60 1963
48
1971
1975
1979
1983
1987
1991
1995
1999
2003
2007
2011
2015
2019
2023
E&P in Norway
E&P in Denmark
E&P in Netherlands
P&A UKCS
P&A Others
Source: DECC[10], NPD[11], DEA[12], NLOG[13]
1967
60
3000
50
2500
40
2000
30
1500
20
1000
10
500
Drillship
Jackup
Semisub
Rig Type
Number of Rigs
Platform Rigs
49
50
51
Jan Berghuis
52
53
Skills
54
Infrastructure and
Equipment
Detailed Engineering
(Topsides and
Substructures)
Removal Vessel
Transportation Barges
Naval Architecture
Offshore Operations
Transportation
Construction Support
Vessels (CSV)
Survey Vessels
Supply Chain
Heavy-Lift Vessel
Contractors
Engineering Consultancies
Specialist Consultancies
6.1 Overview
22%
350
300
250
200
150
100
50
0
2014 2015 2016 2017 2018 2019 2020 2021 2022
55
6.2 Activity
The vessels that are required to remove substructures
and topsides are critical supply chain elements.
The type and location of installation will impact on
the vessels and approach to removal.
Fixed Steel
83% of installations in the North Sea are fixed steel
with a combined weight of 4.4 million tonnes[4].
There are 535 fixed steel installations with
substructures which range from 100 tonnes to over
45,000 tonnes and topsides which range from 70
to 53,000 tonnes[4]. The average substructure weighs
3,500 tonnes and topside 4,300 tonnes.
All fixed steel installations with a substructure under
10,000 tonnes will require removal under OSPAR
regulations. This applies to 91% of installations.
The remaining 9% may apply for a derogation to
leave some or all of the substructure in place.
Both substructures and topsides will need to be
removed from site using removal vessels through
either single lift, multiple lift, piece small or reverse
float over methodologies.
Other Installations
The remaining 13 % of installation types are
predominantly floating technology. Although they
can range in weight (up to 100,000s tonnes), they
are more straight forward to decommission, either
because they can self-propel, or because they can
be towed from site[4]. The requirements for vessels
will be less onerous than for fixed steel and concrete
gravity base.
Activity Focus
The critical supply chain is focused on the removal
of fixed steel and the topsides from concrete gravity
base installations with removal vessels carrying out
either a single lift, multiple lift, piece small or reverse
float over.
56
Volume of Activity
350
300
250
200
150
100
50
0
2014 to 2019
inc. Floating
2014 to 2019
excl. Floating
UK (North Refers
to areas above 55
degrees LAT)
Norway
2020 Onwards
inc. Floating
2020 Onwards
excl. Floating
UK (South Refers
to areas below 55
degrees LAT)
All Others
Source: OSPAR[4]
Number of Substructures
400
8
7
6
5
4
3
2
1
0
<1,600
1,600-4,000
4,000-8,000
8,000-16,000
16,000-58,000
Weight (Te)
South (Refers to areas
below 55 degrees LAT)
Source: OSPAR[4]
Number of Topsides
7
6
5
4
3
2
1
0
<1,600
1,600-4,000
4,000-8,000
8,000-16,000
16,000-58,000
Weight (Te)
South (Refers to areas
below 55 degrees LAT)
Source: OSPAR[4]
57
58
Topside Approach
Vessels
Substructure Approach
Fixed steel substructures do not lend themselves
easily to removal in parts. Although it may be
technically feasible to slice a substructure for
removal in sections, the cost and health and safety
implications often make this less viable than a single
lift approach.
For the very large steel substructures, total removal
becomes highly technically and commercially
challenging. Consequently, OSPAR regulations allow
a route for operators to seek a derogation to leave
footings in place. As stated, concrete gravity base are
significantly heavier and again, the approach to date
has been to seek a derogation to leave the entire
substructure in place.
59
Number of Vessels
25
22
20
15
10
10
5
5
3
<1,600
1,600-4,000
4,000-8,000
8,000-16,000
>16,000
Weight (Te)
South
North
Source: 4coffshore[19]
<1,600
1,600-4,000
4,000-8,000
8,000-16,000
>16,000
Weight (Te)
Topsides and Substructures to be Decommissioned
Available Vessels
Source: OSPAR[4], 4coffshore[19]
18
16
14
12
10
8
6
4
2
0
<1,600
1,600-4,000
4,000-8,000
8,000-16,000
>16,000
Weight (Te)
Topsides and Substructures to be Decommissioned
Available Vessels
Source: OSPAR[4], 4coffshore[19]
60
61
chrishendersonphotography
62
63
Skills
64
Waste Material
Characterisation
Onshore Dismantling
Onshore Environmental
Waste Management
Hazardous Material
Management and Disposal
Infrastructure and
Equipment
Supply Chain
Onshore Cranage
Engineering Consultants
Cutting Equipment
Handling Equipment
Civil Contractors
Demolition Contractors
Dry Dock
7.1 Overview
Determining capacity of a yard to service the O&G
decommissioning market is a function of a number
of parameters relating to processing capability
such as; footprint, material handling capability, lift/
skidding capability, quayside strength, draught, waste
processing etc. It is also dependent on the weight of
the total installation and the weight and dimension
of any subsections delivered to the facility (which is
dictated by the removal method).
1%
25
20
15
10
5
0
2014
2015
2016
2017
2018
2019
2020
2021
2022
65
7.2 Activity
With pressure to reuse and recycle as much of the infrastructure as possible, capable facilities are required to
respond to the challenge. However, there are a limited number of locations with experience and track record. The
ports, harbours and yards infrastructure that are required to decommission steel installations have been identified
as critical supply chain elements through the assessment and consultation process.
Approach
The activity for topside and substructure recycling consists of transferring the structure from a floating or towed
condition to a reusable or recycled product. The following flow diagram shows the typical process during reuse/
recycling.
Structures to be recycled are taken to a port/yard and either loaded in to a dry dock or lifted/skidded/trailed
onto a quayside. The dry dock capacity, skids, craneage, marine crane access and quay side strength are all
constraints which will affect the capacity of the facility to process the structures. As part of the breakdown and
recycling process, the structure is cut into pieces and waste is segregated into hazardous and non-hazardous
waste. For these activities, yard space, cutting and handling equipment, pollution control, and hazardous
materials control dictate the volume of material that can be processed.
Rather than being recycled, many floating steel structures are reused at subsequent fields. This is often following a
retrofit at a fabrication yard. The average age of North Sea floating structures is 17 years which is much less than
the average life of North Sea fixed steel structure at 25 years[4]. As such, there will be significantly less demand for
ports, harbours and yards associated with floating structures in the short to medium term. The most demanding
need for reuse and recycling of infrastructure will result from the steel associated with fixed steel installations and
concrete gravity base topsides, and is the focus of this chapter.
Recover
from field
Retrofit:
Transport to new
location
Install in
new field
Load - in
Lifted, skidded or
trailed onto
quayside
Load into
dry dock
and drain dock
Dry dock
Dewatering
equipment
98% Waste:
Recycled into
new products
EPC Contractor
Port operators
Nearshore
operations
Arrives in inner
harbour
Marine spread
Onshore craneage
Waste
segregation
Broken down
using cutting,
controlled
blasting
Hazardous Material
Disposal
Waste Recycling
contractors
Material
characterisation
Secure, segregated
storage areas
Onshore Yard
Operators
Yard Space
Cutting and handling
equipment
Pollution control
66
Waste Recycling
contractors
Hazardous
Waste:
treatment and
disposal
Quayside strengh
and exent
Skids
Material recycling
facilities and logistics
Volume of Activity
400
350
300
250
200
150
100
50
0
2014 to 2019
inc. Floating
2014 to 2019
excl. Floating
UK (North Refers
to areas above 55
degrees LAT)
2020 Onwards
inc. Floating
2020 Onwards
excl. Floating
UK (South Refers
to areas below 55
degrees LAT)
Norway
All Others
Source: OSPAR[4]
Number of Substructures
8
7
6
5
4
3
2
1
0
<1,600
1,600-4,000
4,000-8,000
8,000-16,000
16,000-58,000
Weight (Te)
South (Refers to areas
below 55 degrees LAT)
Source: OSPAR[4]
Number of Topsides
8
7
6
5
4
3
2
1
0
<1,600
1,600-4,000
4,000-8,000
8,000-16,000
16,000-58,000
Weight (Te)
South (Refers to areas
below 55 degrees LAT)
Source: OSPAR[4]
67
Capability
The type of installations in terms of scale and weight
and decommissioning approach (piece small, multiple
lift, single lift) will dictate the required port, harbour and
yard functional requirements. Smaller installations or
piece small approaches will provide for a much lower
barrier to entry for the supply chain. For the very large
installations, or multiple/single lift approaches the
functional requirements are significantly more onerous,
and there are less viable facilities in the current supply
chain.
68
Existing Capacity
Determining capacity of a yard to service the O&G
decommissioning market is a function of a number
of parameters relating to processing capability,
such as footprint, material handling capability, lift/
skidding capability, quayside strength, draught, waste
processing etc. It is also dependent on the weight of
the total installation and the weight and dimension
of any subsections delivered to the facility (which is
dictated by the removal method).
At present, there are at least 6 yards available to
service the North Sea that have decommissioning
experience [3], [7], [19], [21], [22], [23]. These yards have a
combined footprint of approximately 90 hectares[3], [7],
[19], [21], [22], [23]
. There are at least another 17 that have
most of the above characteristics and are capable of
carrying out future decommissioning work[3], [7], [19], [21],
[22], [23]
. The total yard space available in these yards
suitable for decommissioning projects is estimated
at over 950 hectares[3], [7], [19], [21], [22], [23]. This would
increase the overall footprint by ten times, compared
to current capacity.
Experienced Yards
Greenhead Base
- Peterson UK & Veolia
Environmental Services
Bremerhaven
Delfzijl
Stord Kvaerner
Esbjerg
Great Yarmouth
Vlissingen
Hoondert Services &
Decommissioning
Hull
Wallsend Peterson UK
& Veolia Environmental
Services
Dales Voe
Humber Port
Kishorn
Lutelandet
Mandal
Nigg
Port of Tyne
Smith Embankment
Sunderland
Thyboron
Vest Adger
Wilhelmshaven
69
Decommissioning Yards.
70
Decommissioning Yards in
the North Sea
30
Draught (m)
25
20
15
10
500
1000
1500
2000
Potential
Experienced
Source: Mackay Consultants[3], NCPA[7]
200
Typical Footprint of a
4,000 tonne topside
150
100
50
Denmark
Germany
Potential
Netherlands
Norway
UK
Experienced
Source: Mackay Consultants[3], NCPA[7]
71
72
73
Able UK Ltd
Arup
74
8.0 People
75
5,000
4,000
3,000
2,000
Analysis undertaken on the Brent Decommissioning Programme concludes that there is approximately 450,000 of
expenditure per man year of employment[3]. Using this figure in conjunction with the predicted expenditure profile in
the North Sea to 2022, results in an annual average employment of approximately 4,250 people.
Annual average decommissioning activity is predicted to double over the next decade, indicating a need to
substantially grow the workforce capability. The most likely source of these resources is the North Sea E&P
Sector. There are an estimated 271,000 directly employed within the O&G industry across the UK, Norway and
Denmark[28], [29], [30]. These countries all estimate a workforce that will grow at a faster rate than the UK average[28],
[29], [30]
. A significant proportion of these individuals could have directly applicable or transferrable skills to support
decommissioning. Decommissioning employment estimates represents less than 2% of the North Sea E&P
resource. Considered in isolation it is unlikely that resources to support the decommissioning market will be a
constraint.
However, the O&G market and engineering market as a whole are suffering from resource constraints. According
to statistics from the Royal Academy for Engineering, the UK only produces enough science, engineering
and technology graduates to meet two thirds of the required 110,000 new entrants required annually by UK
businesses[31]. Analysis by OPTIO finds that 33% of businesses in the upstream O&G Sector have hard-to-fill roles
including design engineers, marine crew, and mechanical engineers[28]. Skills shortages also exist within the current
workforce, with 24% of businesses with engineering and technical staff citing skills shortages as a particular issue[28].
Arup consultation suggested there is an anecdotal perceived image problem associated with the decommissioning
market, which is not considered as interesting or as financially rewarding as the E&P market. As a result, the
decommissioning market is likely to be vulnerable to competition from the North Sea and global E&P markets.
Research highlights that the age profile of employees in the industry is a key issue[32]. An aging workforce creates a
concern in terms of future reduction in available workforce as older staff retire without the pipeline of new staff filling
their roles. This is particularly critical for the decommissioning market as the first tranche of projects will be older
assets, many of which have suffered from poor record keeping. It is important that the expertise and knowledge held
by older workers is retained within the industry and transferred to new recruits. Other markets such as the nuclear
decommissioning and offshore wind sector may provide resources with transferrable skills that can support the
market. However, these markets are already resource constrained and are unlikely to offer significant potential to
alleviate resource constraints.
76
People
[3]
Health Check
Capability = Medium
As a nascent market it is inevitable that there is currently not sufficient experienced resources to meet future demand. Building
capacity will involve attracting skilled resources from analogous industries and training new capability.
Annual average decommissioning activity is predicted to double over the next decade, indicating a need to substantially grow the
workforce capability. Capturing and disseminating experiences from a transient workforce will be a challenge[1].
77
Jan Berghuis
78
79
Decommissioning
80
81
82
83
84
Appendix A: References
85
Sources of Information
The following sources of information were integrated
into this analysis:
1. Oil and Gas UK (2013), Decommissioning Insight
2013, Available via; http://www.oilandgasuk.
co.uk/cmsfiles/modules/publications/pdfs/
OP082.pdf (Accessed 25th September 2014)
2. Prof. Kemp, A. (2014), Prospective
Decommissioning Activity and Infrastructure
Availability in the UKCS (updated figures),
University of Aberdeen. Not publically available
3. Mackay Consultants (2013), Draft Report for
Decom North Sea, Not publically available
4. OSPAR (2013), Inventory of Offshore
Installations, Available via; http://www.
ospar.org/content/content.asp?me
nu=01511400000000_000000_000000
(Accessed 25th September 2014)
5. Scottish Enterprise, Decom North Sea
& Accenture (2013), Decommissioning
in the UKCS, Available via; http://www.
scottish-enterprise.com/~/media/
SE_2013/Knowledge%20Hub/Publication/
Decommission%20ing%20UKCS%20study.PDF
(Accessed 25th September 2014)
6. Oil & Gas UK (2014), Activity Survey, Available via
http://www.oilandgasuk.co.uk/cmsfiles/modules/
publications/pdfs/EC040.pdf (Accessed 25th
September 2014)
7. Norwegian Climate and Pollution Agency
(NCPA) (2010), Decommissioning of Offshore
Installations, Available via; http://www.npd.no/
Global/Engelsk/3%20-%20Publications/Reports/
endelig%20avvikling%20rapport%20engelsk.pdf
(Accessed 25th September 2014)
8. Norwegian Oil & Gas Association (NOGA) (2013),
Activity Still High In a Still Uncertain World,
Available via; http://www.norskoljeoggass.no/
Global/2013%20Dokumenter/Publikasjoner/
NOROG%20konjunktur_2013_ENG%20(08).pdf
(Accessed 25th September 2014)
9. Oil & Gas UK (2009), North Sea Well
Abandonment Study, Not publically available
86
Appendix A: References
23. Achilles Database (2014), Scandinavia MetalInformation Register, Available via; http://
www.scanmet.no/files/Achillesdocument.pdf
(Accessed 26th September 2014)
24. DECC (2014), Strategy for the Management of
NORM Waste in the UK, Available via; https://
www.gov.uk/government/uploads/system/
uploads/attachment_data/file/335821/Final_
strategy_NORM.pdf (Accessed 25th September
2014)
Appendix A: References
87
88
89
Capability
Capability refers to the competence of the market to
support the decommissioning market. It is distinct
from capacity as it does not relate to the volume of
capable resources to meet the predicted demand.
The classification of capability is derived from
the assessment carried out by Accenture,
Decommissioning in the UKCS, May 2013. In
this report the industry and supply chain was
consulted on their perceived capability to provide
decommissioning services as per the O&GUK WBS.
90
Score
Rational
Low
Very Limited
Low / Medium
Medium
Established / Proven
Medium / High
High
Best in Class
Score
Rational
Low
Low / Medium
Medium
Medium / High
High
Investment Commitment
Score
Rational
Low
Low / Medium
Medium
Medium / High
High
Score
Rational
Low
Low / Medium
Medium
Medium / High
High
91
92
Appendix C: Resources
93
Skills
Corporate Services
Decommissioning
Programme Preparation,
Reporting and Close Out
Survey Vessels
Geotechnical data
collection
Supply Chain
Engineering Consultancies
Project Management
Consultancies
Survey Vessels
Geophysical data collection
Integrated Professional
Services
Survey Vessels
Environmental
Legal Advisors
Navigational Aids
Accountants
Engineering Concept
Appraisal
(to support DP)
Survey Contractors
Environmental
Consultancies
Environmental Assessment
(to support DP)
Tier 1 Contractors
Navigation Consultants
Stakeholder Engagement
Commercial Fisheries
Interface
(Fish Safe, Admiralty
Charts, Legacy Trust)
Navigation Interface
Legal Support
94
Infrastructure and
Equipment
Appendix C: Resources
Decom
Decom
North
North
Sea
Sea
Review
Review
of of
Decommissioning
Decommissioning
Capacity
Capacity
| October
| September
2014 2014
Well Abandonment
Skills
Engineering (P&A)
Operations Support
Infrastructure and
Equipment
Supply Chain
Rigs
Drilling Contractors
Rigless Solution
Vessel Operators
Transport Vessels
Rig/Rigless Contractors
Waste Management
Abandonment Materials,
Expanding Cement,
Resins, Silicone Rubber
Appendix C: Resources
95
Skills
96
Infrastructure and
Equipment
Supply Chain
Offshore Operations
Standby Vessels
Vessel Operators
Deck Crew
Engineering consultancies
HV and LV Power
Engineering
Specialist Contractors
Conventional Cutting
Technologies
Survey Contractors
Tier 1 Contractors
Platform Services
Integrity Management
(structural)
Engineering Down
Engineering Up
Survey Vessels
Detailed Engineering
Waste Management
Services
Contaminant Disposal
Routes
Specialist Sampling
Services
Appendix C: Resources
Decom
Decom
North
North
Sea
Sea
Review
Review
of of
Decommissioning
Decommissioning
Capacity
Capacity
| October
| September
2014 2014
Skills
Infrastructure and
Equipment
Detailed Engineering
(Topsides and
Substructures)
Removal Vessel
Transportation Barges
Naval Architecture
Offshore Operations
Transportation
Construction Support
Vessels (CSV)
Survey Vessels
Supply Chain
Heavy-Lift Vessel
Contractors
Engineering Consultancies
Specialist Consultancies
Appendix C: Resources
97
Skills
98
Infrastructure and
Equipment
Supply Chain
Vessel Crew
Suction Dredging
Engineering consultants
Survey Contractors
Offshore Operations
Vessel Contractors
Geotechnical engineering
Environmental Consultants
Specialist Contractors
Appendix C: Resources
Decom
Decom
North
North
Sea
Sea
Review
Review
of of
Decommissioning
Decommissioning
Capacity
Capacity
| October
| September
2014 2014
Skills
Waste Material
Characterisation
Onshore Dismantling
Onshore Environmental
Waste Management
Hazardous Material
Management and Disposal
Infrastructure and
Equipment
Supply Chain
Onshore Cranage
Engineering Consultants
Cutting Equipment
Handling Equipment
Civil Contractors
Demolition Contractors
Dry Dock
Appendix C: Resources
99
Clare Lavelle
Arup
Scotstoun House
South Queensferry
Edinburgh
EH30 9SE
t +44 (0) 131 331 1999
e clare-m.lavelle@arup.com
Nigel Jenkins
Decom North Sea
33 Albyn Place
Aberdeen
AB10 1YL
t +44 (0) 1224 452170
e njenkins@decomnorthsea.com
Scottish Enterprise
Atrium Court
50 Waterloo Street
Glasgow
G2 6HQ
t +44 (0) 845 607 8787
e enquiries@scotent.co.uk
www.scottish-enterprise.com
www.decomnorthsea.com
www.arup.com
Cover Image: The Thialf, Heerema Crane Vessel Jan Berghuis