Guidelines on Decommissioning

Cost Estimation

Issue 2

April 2011

Whilst every effort has been made to ensure the accuracy of the information contained in this
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Copyright  2010 The United Kingdom Offshore Oil and Gas Industry Association Limited trading
as Oil & Gas UK
Prepared by the following Oil and Gas UK Workgroup members:-

Issue 1 - 2006 Edition

Kevin Boyne (Total)
Alan Chesterman (Apache)
Alan Davies (Turner & Townsend)
Sue Dunlop (BP)
Chris Gray (ConocoPhillips)
Bob Hemmings (Shell)
Ian Knox (DTI)
Catherine Morgan (Talisman)
Graham White (DTI)

Issue 2 - 2010 Revision

Sue Dunlop (BP)
John Felton (ConocoPhillips)
Iain Riach (Wood Group)
Alan Stokes (PSN)

ISBN: 1 903 003 64 4

PUBLISHED BY OIL & GAS UK

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Website: www.oilandgasuk.co.uk
 Guidelines on Decommissioning
Cost Estimation

Contents

1. Introduction 1
2. Objective of the Guideline 3
3. Application of the Guideline 5
4. Offshore Decommissioning Cost Estimation 7
4.1 Check List 7
4.2 Cost Estimate Evolution 8
4.3 Field Development Plan (FDP) stage 8
4.4 During Field Operation 8
4.5 Asset Sale or Transfer 9
4.6 End of Development Life 9
5. Offshore Decommissioning Cost Estimate Checklist 11
5.1 Stages 11
5.2 Cost Estimating Checklist Structure 11
Appendix 1: Abbreviations 13
Appendix 2: Definitions of Terms Used in this Guideline 15
Appendix 3: Overall Decommissioning Schematic 17
Appendix 4: Cost Estimating Guidelines 19
Appendix 5: Supplementary Notes to Checklist 29
Appendix 6: Regulatory Regime 33

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1. Introduction
Oil & Gas UK have recognised that decommissioning in the UKCS is becoming
a major part of the industry and needs coordination in order to provide timely
advice to the Government and provide a consistent voice from the Industry on
decommissioning matters. In 2005, a Steering Committee and
Decommissioning Workgroups were set up to coordinate future work.
The first issue of the Decommissioning Cost Estimating Guidelines was issued
by the Efficiency and Effectiveness Workgroup WG4 in 2006. It was based on
typical work breakdown structures from the represented companies and their
collective experience. Development of the Guidelines was facilitated by Turner
& Townsend.
Four years after the first issue, a subgroup to WG4 (now entitled Infrastructure)
has been formed to review the Decommissioning Cost Estimation Guidelines.
This revision is based on project experience in UK and Norway, reflects
changes in legislation and government and industry bodies and feedback
based on four years of use. The intention is to capture lessons learned,
provide clarification and to make the Guidelines more user friendly.
Guidelines on the methodology for the cost estimating of well abandonment
work have been developed by Work Group 5 (WG5). Their document provides
guidance on the preparation of a cost estimate to plug and abandon the
different types of wells in the UKCS. Guidance on estimating costs for the
abandonment of the wells is not included in the WG4 document. Reference
must be made to the WG5 document (Guideline on Well abandonment cost
Estimation).

Introduction
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2. Objective of the Guideline

This guideline is advisory not prescriptive; it is intended to outline best practice
based on industry experience to date and provide:

a template or common framework against which operators can refer their
decommissioning cost estimates.

a checklist of activities in order that an estimate can be built that is both
consistent and complete.

assistance in establishing a greater level of confidence in determining
decommissioning costs for asset acquisition or disposal (Security
Agreements, etc.).

a means of both comparing estimates from different sources (third
parties e.g. partners, contractors, etc.) and capturing operator’s
experience.

a potential framework for future benchmarking.
It is anticipated that operators in the UKCS will provide estimates in
accordance with the principles and practices described in this guideline, so that
benchmarking databases can be created. All decommissioning estimates
should be prepared using the check lists in this guideline to assist in the
preparation of a comprehensive estimate.

Objective of the Guideline

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3. Application of the Guideline

This guideline is intended for application to offshore oil & gas facilities in the
UKCS. It is based on larger developments, but the principles can be adopted
for those of a smaller scale, differing mainly in the level of detail applied.
Decommissioning cost estimates are required throughout the development life-
cycle for:-
• initial field economics,
• calculation of the decommissioning provision / asset retirement
obligation (ARO) during the field life,
• decommissioning security agreements towards the end of field life,
• planning the cessation of production and the preparation of the
decommissioning plan,
• comprehensive decommissioning cost estimation for the
decommissioning project.
The level of detail and the number of line items may be considerably less at the
initial field economics stage. The level of detail shown would typically increase
3 – 5 years prior to Cessation of Production (CoP) when detailed project
planning commences. The level of detail will also vary based on the
Contracting Strategy.
The guideline is not intended to provide the methodology for the estimation of
either future market rates or activity durations, although these items must be
clearly stated for a cost estimate to be properly understood.

Application of the Guideline

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4. Offshore Decommissioning Cost Estimation

4.1 Check List
This guideline provides a comprehensive checklist (included as Appendix 4)
which can be used to develop a work breakdown structure (WBS) which should
be read in conjunction with the notes provided in this guide. The primary
purpose is to provide a checklist of activities that should be considered when
building a decommissioning estimate.
For an estimate to be regarded as representative of good practice the following
features should be included:-

High level Method Statement – A description of the overall
methodology adopted for the Decommissioning Project.

Scope of the Estimate – The intended coverage and accuracy of the
Estimate. Which facilities are included and which are excluded, including
additions, upgrades and modifications to the facilities, and any relevant
onshore facilities.

Ownership – The estimate may need to be split to allow for different
equity ownership of parts of the development.

Physical Assumptions – all assumptions made in building the estimate
should be clearly stated e.g. :-
i. regulatory (e.g. derogation) assumptions, pipelines left in place,
treatment of drill cuttings etc.
ii. facilities included (and excluded) from the estimate e.g. number of
platform & subsea wells, wells expected to have been
decommissioned during earlier campaigns, etc.
iii. key market rate and escalation assumptions (rig rates, HLV rates,
exchange rates etc).
iv. key activity duration assumptions (rig days, marine spread
durations, etc) including allowances for waiting on weather (WoW)
and non-productive time (NPT).

Risk Assessment - key assumptions regarding the level of risk
assessment undertaken should be clearly identified

Unallocated Provision (Contingency) - the UAP should be clearly
identified. The UAP will be representative of the level of definition of the
work and will be based on Industry experience and good practice. The
UAP will reduce as the cost estimate matures.

Technology Assumptions – equipment and practice assumptions
behind the estimate. (e.g. rig or workover vessel selection, lifting and
removal techniques).

Documentation – as a dynamic, evolving document, it is recommended
that the Cost Estimate, together with its key background documents and
software, is maintained securely within the relevant corporate system for
future update, review, feedback into other cost models and compliance
with the appropriate Regulatory Regime (Appendix 6).

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4.2 Cost Estimate Evolution

There are four key phases of offshore decommissioning cost estimate
evolution:-

at field development

during field operations

for asset sale or transfer

nearing the end of field life (including preparation of the
Decommissioning Programme).
For the above phases, it is expected that Risk Assessment analysis would be
used to both identify the key risks pertaining to the Decommissioning Cost
Estimate and allow calculation of contingency/UAP.

4.3 Field Development Plan (FDP) stage

Decommissioning is an integral component of the Life Cycle Costs of the Field
or Asset. It is therefore good practice to consider decommissioning costs
during the design of the development, taking into account both regulatory
requirements and respective Oil & Gas UK Guidelines and Company
requirements.
At this stage in the field life cycle, the estimate would typically be defined at the
Element level and it may be necessary to make simplified assumptions and use
estimating factors which reflect the lack of available detail of a
decommissioning project to be carried out at the projected end of field life.
It is therefore essential that the assumptions, factors, etc. are clearly stated
together with their basis.
There will also be a correspondingly higher contingency applied, reflecting this
lack of definition of the estimate and consequent higher perceived risks at this
stage.

4.4 During Field Operation

An annual check is usually made to update well numbers and status and major
modifications to facilities. If significant changes are made to the asset a re-
estimation may be appropriate. Other issues that may trigger a revision are
changes to regulatory requirements, industry expectations or significant
changes to decommissioning technology.
Too frequent revisions to the estimate due to changes in market rates (e.g.
HLV, rig rates) are not normally recommended as rates are subject to cyclic
fluctuations and will vary. However, in the last 5 years of field life, it is important
that market conditions are more carefully considered.

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4.5 Asset Sale or Transfer

The level of cost estimate expected depends upon when, in the life cycle, the
sale or transfer is taking place and the terms and conditions of the financial
transactions.
This guideline can be used to provide a common understanding and structured
enquiry into the Owners’ decommissioning estimate and the assumptions made
in its creation. Use of the checklist and guideline can assist if the current
estimate is deemed not to be at the appropriate level of detail for the asset life,
or the last update is not recent.

4.6 End of Development Life

Clearly, in the last 5 years of Development life, a much more detailed cost
estimate becomes necessary for budget and planning purposes, based on
analysis of the decommissioning requirements for the specific facility. In
particular, the phasing of the expenditure becomes more significant leading
ultimately to a comprehensive cost estimate (relevant to the size of the
decommissioning project) which properly incorporates schedule and project
phasing, contract strategy, project engineering requirements and the project
approval process.
Typically, discussion of the decommissioning proposals may commence with
the Department of Energy & Climate Change (DECC) 2-3 years in advance of
anticipated Cessation of Production (CoP), leading to submission of the
Decommissioning Programme.
It should be noted that wells and facilities could be abandoned prior to the main
CoP approval but would still be classified as decommissioning spend. Advice
needs to be sought as to which costs are eligible, under the accounting
standards, to be charged to decommissioning.

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5. Offshore Decommissioning Cost Estimate

Checklist
5.1 Stages (See definitions in Appendix 2)
The Checklist has been compiled on the basis of a typical large offshore
decommissioning project. It is built up for each stage from a high level facility
through increasing levels of detail through key elements and then to individual
activities. In this way the Checklist can be used to select the scope
appropriate for a specific project. The Checklist has been formulated to cover
the following major stages of decommissioning:-

Preparation (for Cessation of Production - CoP)

Suspension (Live)

Well Abandonment

Cleaning

Disconnection

Suspension (Cold)

Removal

Disposal

Continuing Liability
These stages are shown in an overall schematic form in Appendix 3.
It should be noted that these stages may not be part of a continuous process
and some may be concurrent. All stages may not be required e.g. there may be
no “Suspension (Live)” phase. Furthermore the stages may be treated
differently for project execution when the execution and contract strategy are
known.

5.2 Cost Estimating Checklist Structure

The four proposed checklist levels are described as follows:-
Level 1 - Stage: The high level steps in the
Decommissioning process e.g. Preparation
(for CoP), Well Abandonment, Cleaning,
Disconnection, Removal, etc.
Level 2 - Facility: Physical part of the development, e.g.
Platform, Pipeline, etc.
Level 3 - Element: Main component of a Facility of the
Development e.g. Jacket, Topsides,
Template, etc.
Level 4 - Activity Level 1: Key Cost ‘Building Blocks’ for developing
estimate.
Additional Activity Levels will be required to build up the Activity Level 1 costs
e.g. discipline, package of work, indirects/directs providing flexibility to suit
individual contract strategies.

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The proposed Checklist is shown in spreadsheet form in Appendix 4.

In order to reduce the length of the Checklist the first 3 levels are shown as a
full hierarchy where items are repeated under each stage and facility type.
However, all of the Activity Level 1 items apply to all Elements of the
corresponding section. The following extract from the spreadsheet illustrates
this point:-
Stage Facility Element Activity Level 1
Removal Pipeline
Pipelines Surveys
Flowlines Engineering
Umbilicals DSV Support Vessel
Cable Reel / SJ Lift Vessel
Transport to Shore
Trench & Backfill
Rock dumping
Debris Clearance
Post Removal Survey & Trawl
Logistics

In the above extract from the removal of a pipeline, each of the Activity Level 1
items (Surveys, Engineering, DSV Support Vessel, etc.) is applied to each
Element (Pipelines, Flowlines, Umbilicals & Cables) i.e. all 10 activities are
carried out for each of the 4 elements.
This form of abbreviation of the hierarchy may occasionally result in some
redundancy, but this is judged to be worth the benefit in brevity.
Supplementary notes providing further explanation of the activities detailed in
the Check List are provided in Appendix 5.

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Appendix 1
Abbreviations

ARO Asset Retirement Obligation

CoP Cessation of Production
DECC Department of Energy and Climate Change
DSV Diving Support Vessel
EIA Environmental Impact Assessment
FDP Field Development Plan
FPSO Floating Production Storage and Offtake
GBS Gravity Based Structure
GVI General Visual Inspection
HLV Heavy Lift Crane Vessel
LSA Low Specific Activity Radioactivity
MMI Minimum Manned Installation
NPT Non Productive Time
NUI Normally Unmanned Installation
OSPAR Oslo Paris Conventions for the Protection of the
Marine Environment of the North-East Atlantic
P&A Wells Plug and Abandon
PCB’s Polychlorinated biphenyls
PM Project Management
PPOS Post Production Operations Support
UAP Unallocated Provision
UKCS United Kingdom Continental Shelf
WBS Work Breakdown Structure
WoW Waiting on Weather

Appendix 1
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Appendix 2
Definitions of Terms Used in this Guideline

Development: Designation for a geographical area which

contains recoverable hydrocarbon reserves
(Field).
Decommissioning: The generic description from Preparation
through to Continuing Liabilities.
PPOS: Post Production Operations Support costs
should be included as the costs for running
and maintaining the platform are purely in
support of decommissioning after CoP.
These include items such as facilities
crewing, supply and maintenance activities
and onshore warehousing and procurement.

STAGES - LEVEL 1
Preparation (for CoP): The initial stage of decommissioning including
Cessation of Production, DECC approval,
Decommissioning Programme DECC
approval and internal and JV co-venturer
Sanction prior to Cessation of Production.
Wells will often be abandoned after CoP has
been granted. However some wells may be
abandoned earlier prior to CoP approval.
Suspension (Live): This stage can occur immediately after
ceasing production but prior to well plug and
abandonment (P&A) and disconnection and
cleaning. Live Suspension occurs when there
is a delay in the commencement of
decommissioning whilst the facilities are still
live i.e. they have hydrocarbons present. The
facility will still require maintaining as a live
installation.
Well Abandonment: All activities comprising plugging and
abandoning the wells including platform rig
upgrade, mobile rig mob / demob, well scale
and decontamination treatment and
conductor removal.
Cleaning: All activities including shut-down,
depressurisation, making hydrocarbon-free,
disposal of hazardous wastes, flooding of
pipelines, etc.

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Disconnection: All activities including disconnection of

pipework & cabling crossing module
boundaries, preparation for any NUI / MMI,
etc. leading to suspension or removal.
Suspension (Cold) : This stage is sometimes referred to as Cold
NUI / MMI Phase or Lighthouse Mode and can occur
after disconnection and cleaning
(hydrocarbon free). Typical activities are
maintenance of navigational aids, structural
integrity and ongoing monitoring. It is
terminated by recommencement of offshore
activities for removal.
Removal: Final preparation and removal of facilities
from offshore and subsea to inshore or the
reuse/ recycling/ disposal site.
Disposal: Onshore or Inshore, dismantling, cleaning
and reuse/ recycling/ disposal of facilities.
Continuing Liabilities: The obligation exists to monitor the site(s)
and any facilities that remain. An appropriate
monitoring programme needs to be
established with a provision for ongoing
liabilities.

Appendix 2
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Appendix 3
Overall Decommissioning Schematic

Decommissioning
WBS Structure

(1) (2) (3) (4) (5) (6) (7) (8) (9)

STAGE Preparation Suspension Well Abandonment Cleaning and Disconnection Suspension Cold Removal Disposal Continuing Liability
for CoP Live Decommissioning (NUI/MMI)

• Decommissioning • Care and • All activities related to • Depressurization • Closing down of all • Cold Phase or • Make-safe activities. • Offloading. • Establish and carry
method studies for maintenance of a P&A of the wells. hydrocarbon freeing utility and safety Lighthouse Mode, out a monitoring
FOCUS wells and each facility facility that has isolation, purging and systems after well awaiting removal. • Major hookdown • Cleaning and program for the
element. ceased production • Includes platform rig cleaning of the P&A if applicable. activities including handling of site(s) and any
but has yet to be upgrades, well scale process systems. • Typical activities are module separation, hazardous waste. facilities that remain.
• Reservoir studies to decommissioned. and decontamination • Disconnection of maintenance of removal of obstruct-
justify CoP. treatment, conductor • Cleaning and treating process and utility navigational aids, ions in way of rigging, • Deconstruction.
• The facility will still removal, etc. pipelines. pipework, cabling structural integrity refurbishing of
• Preparation of a contain hydro- crossing module and ongoing padeyes etc. • Recycle and/or
Cessation or carbons and is thus • Also includes rig • Early disposal of boundaries, etc. monitoring. disposal.
Decommissioning considered live. contracting activities hazardous waste, etc. • Removal of facility
Plan. as applicable. • Prep. for normal elements and
• Waste accounting unmanned installation transport to disposal
• Internal and • Rigless options. system. (NUI) or minimum site.
stakeholder manned installation
approvals. • Post Production • Post Production (MMI). • Sea bed clean up.
Operations Support. Operations Support.
• Regulatory approval. • Removal of loose
items.
• Cessation of
Production. • Post Production
Operations Support.
• Topside/ Jacket
Surveys.

• Environmental
Impact.

Appendix 3
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Appendix 4
Cost Estimating Guidelines

The Oil and Gas UK Cost Estimating Work Book consists of three work sheets
• Basis of Estimate to define the salient facts of the estimate (Appendix
4.1)
• Check list to assist in preparation of the estimate (Appendix 4.2)
• Check list with notes to clarify activities (Appendix 4.3)

Appendix 4
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Appendix 4.1

BASIS OF ESTIMATE: KEY DATA AND ASSUMPTIONS

Facility Information
Asset name:
No. Of Wells ea.
Water Depth m
Topside Weight Mt
No. Of Modules ea.
No. Of Lifts ea.
Jacket Weight Mt
Template weight Mt

Include picture and / or layout drawing

Key Schedule Dates

CoP
Plug and abandonment of wells
Hydrocarbon free/ start Suspension (Cold)
Remove deck
Remove Jacket

Items excluded / limits of estimate

Specify limits of facilities included in estimate and list item which are included or excluded
e.g. base of riser for import line owned by others
new module about to be installed

Delayed removal
List any items that will not be removed at the same tiem as main facility
e.g. pipeline crossings or subsea tie-in

Ownership
Company %
Details of ownership and % interest
Include details were ownership is different for part of the facilities

Key Unit Rates

Rig rate $/day
HLV rate
DSV rate
Exchange rate $/£
Exchange rate euro/£
etc

Key Assumptions
e.g.
Derogation
Pipelines removed or left in situ
Type of rig Jack-up, Semi, platform, workover
Flotel

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Appendix 4.2 Check List

Decommissioning Cost Estimating - Checklist

Stage Facility Element Activity Level 1

Preparation (for CoP)
Field Methodology Studies
Platform Engineering
Floater Surveys
Subsea CoP Plan Preparation
Pipelines Decomm Plan Preparation
Offshore Loading Commercial/Contractual Considerations
Platform wells
Sub-sea Wells

Owner (PM) Approval

Client
Suspension (Live)
Field
Field Method Studies
Field Monitoring

PPOS Onshore Support

Offshore Support & Maintenance

PM Approval
Client
Well Abandonment
Wells (Final Well Decommissioning)
Platform Wells Engineering
Platform Rig Upgrade
Surveys
Mob-Demob Mobile Rig
Rig Hire
Well Inspection / Survey
Plug & Abandon (Rig or Rigless)
Conductor Cut/Removal (Rig or Rigless)
Transport to Shore
Logistics
LSA Scale treatment & Decontamination
Reuse/Recycle/Disposal

Subsea Wells as Platform Wells plus :

Surveys
Site Preparation
Wellhead & Equipment Removal
Post Removal Survey & Trawl

PPOS
Cleaning
Field
Method Studies Engineering

Platform
Topsides Engineering
Jackets Surveys
Hazardous Waste Management
Shutdown & Depressurisation
Isolation
Flushing & Cleaning
Accommodation
Support Vessels
Logistics

GBS As above plus -

Cell Cleaning

Floater
Vessel As for platform
Risers

Subsea
Subsea Structure As for platform
DSV / Vessel

Pipeline
Pipelines Engineering
Flowline Surveys
Umbilical DSV / Vessel
Cable Flushing & Cleaning
Isolation
Logistics
Offshore Loading
Risers Engineering
Offtake Systems Surveys
Mooring Systems Flushing, Cleaning & Flooding
Isolation
Accommodation
Logistics

PPOS Standby Boat

Offshore Operations Support
Onshore Support
Maintenance
Fuel

PM Approval
Client

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Disconnection
Field
Method Studies Engineering

Platform
Topsides Engineering
Jackets Surveys
GBS Offshore Deconstruction
NUI/MMI Preparation Accommodation
Support Vessels
Modifications
Logistics

Floater
Vessel Engineering
Mooring Systems Surveys
Risers Disconnection
Accommodation
Support Vessels
Logistics

Subsea
Subsea Structure Surveys
Engineering
Logistics

Pipeline
Pipelines Engineering
Flowline Surveys
Umbilical DSV / Vessel
Cable Cut & Recover Spools & Assoc Eqpt
Logistics

Offshore Loading
Risers Engineering
Offtake Systems Surveys
Mooring Systems Disconnection
Accommodation
Logistics

PPOS Standby Boat

Offshore Operations Support
Onshore Support
Maintenance
Fuel

PM Approval
Client
Suspension (Cold)
(NUI / MMI) Field
Field Field Monitoring

PPOS Onshore Support

Offshore Support & Maintenance
Maintenance

PM Approval
Client

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Removal
Field
Method Studies Engineering
New Technology eg. Removal Studies
Platform
Topsides Surveys
Jackets Engineering
Lifting Preparation
Offshore Deconstruction
Lift Vessel
Transportation Barges
Support Vessels
Accommodation
Debris Clearance
Jacket Post Removal Survey & Trawl
Drill Cuttings
Conductor, Riser, Caisson Removal
Template Removal
Logistics

GBS As above plus -

Cell Cleaning
Reinstate Deballasting systems for Refloating

Floater
Vessel Surveys
Mooring Systems Engineering
Risers Offshore Deconstruction
Anchor Handling
Lift Vessel
Towing Spread
Transportation Barges
Support Vessels
Accommodation
Transport to Shore
Logistics
Debris Clearance
Post Removal Survey & Trawl

Subsea
Subsea Structures Surveys
Engineering
DSV Support
Lift vessel
Transport to Shore
Drill Cuttings
Debris Clearance
Post Removal Survey & Trawl
Logistics

Pipeline
Pipelines Surveys
Flowlines Engineering
Umbilicals DSV Support Vessel
Cable Reel / SJ Lift Vessel
Transport to Shore
Trench & Backfill
Rockdumping
Debris Clearance
Post Removal Survey & Trawl
Logistics

Offshore Loading
Risers Surveys
Offtake Systems Engineering
Mooring Systems Offshore Deconstruction
Lift Vessel
Transportation Barges
Support Vessels
Upending Operations
Transport to Shore
Debris Clearance
Post Removal Survey & Trawl
Logistics

PPOS Standby Boat

Offshore Crew
Onshore Support

PM Approval
Client

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Disposal
Field
Method Studies Engineering

Platform
Topsides Inshore Deconstruction
Jacket Offloading
GBS Onshore Deconstruction
Drill Cuttings Reuse/Recycle/Disposal
Hazardous Waste Handling
Resale Value
Scrap Value

Floater
Vessel Inshore Deconstruction
Mooring Systems Offloading
Risers Onshore Deconstruction
Drill Cuttings Reuse/Recycle/Disposal
Hazardous Waste Handling
Resale Value
Scrap Value

Subsea
Subsea Structure Inshore Deconstruction
Wells Offloading
Drill Cuttings Onshore Deconstruction
Reuse/Recycle/Disposal
Hazardous Waste Handling
Resale Value
Scrap Value

Pipeline
Pipelines Offloading
Flowline Onshore Deconstruction
Cable Reuse/Recycle/Disposal
Umbilical Hazardous Waste Handling
Resale Value
Scrap Value

Offshore Loading
Risers Inshore Deconstruction
Offtake Systems Offloading
Mooring Systems Onshore Deconstruction
Reuse/Recycle/Disposal
Hazardous Waste Handling
Resale Value
Scrap Value

PM Approval
Client
Continuing Liability
Field
Field Method Studies
Field Monitoring & Maintenance

PM Commercial Setup Costs

Client
Legacy Costs

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Appendix 4.3 Check List with Notes

Decommissioning Cost Estimating - Checklist

Stage Facility Element Activity Level 1

Preparation (for CoP) Could include Derogation
Field Methodology Studies Assessment
Platform Engineering
Typically as-builts are not up to date.
Floater Surveys Construction drawings may be difficult to locate.
Subsea CoP Plan Preparation
Pipelines Decomm Plan Preparation Typically including :- Studies, Comparative assessment,
External Reviews, Public Consultation, Planning &
Offshore Loading Commercial/Contractual Considerations
Communications.
Platform wells Reference - DTI Guidelines, UKOOA Stakeholder Guidelines
Sub-sea Wells etc.

Owner (PM) Approval Agreements for Access, Pipeline crossings, etc.

Client Contract Strategy

Suspension (Live)
Including Insurance
Field
Post Cessation of
Production
Field Method Studies
Field Monitoring

PPOS Onshore Support

Offshore Support & Maintenance
Including Insurance
PM Approval
Client
Well Abandonment
Wells (Final Well Decommissioning) Includes Contractor Project Management, Review of well
files, Review of well categorisation (both platform and
Platform Wells Engineering
sub-sea wells).
Platform Rig Upgrade
Surveys
Mob-Demob Mobile Rig Seabed survey for Jack Up
Rig Hire
Well Inspection / Survey
Plug & Abandon (Rig or Rigless)
Conductor Cut/Removal (Rig or Rigless)
Transport to Shore Helicopters, Supply Boats,
Onshore Supply Base
Logistics
LSA Scale treatment & Decontamination
Reuse/Recycle/Disposal
Seabed, Anchor Pattern or GVI.
Other Surveys may be included in Contractor's Scope under
Subsea Wells as Platform Wells plus : headings below
Surveys
Site Preparation
Net Removal, Leak Check, Tree Prep, Protective Structure
Wellhead & Equipment Removal Check.
Post Removal Survey & Trawl

PPOS
Cleaning
Field
Method Studies Engineering
Includes Contractor Project Management
Platform
Topsides Engineering Other Surveys may be included in Contractor's
Jackets Surveys Scope under headings below
Hazardous Waste Management
including Radioactive Sources, PCB's, Mercury, LSA and any
Shutdown & Depressurisation Trans-Frontier shipment of Waste.
Isolation
Flushing & Cleaning
Accommodation
Support Vessels Helicopters, Supply Boats,
Onshore Supply Base
Logistics

GBS As above plus -

Cell Cleaning

Floater
Vessel As for platform
Risers

Subsea
Subsea Structure As for platform
DSV / Vessel
Includes Contractor Project Management

Pipeline
Pipelines Engineering
Other Surveys may be included in Contractor's
Flowline Surveys Scope under headings below
Umbilical DSV / Vessel
Cable Flushing & Cleaning
Helicopters, Supply Boats,
Isolation
Onshore Supply Base
Logistics
Offshore Loading Includes Contractor Project Management
Risers Engineering
Offtake Systems Surveys Other Surveys may be included in Contractor's
Mooring Systems Flushing, Cleaning & Flooding Scope under headings below
Isolation
Accommodation
Logistics Helicopters, Supply Boats,
Onshore Supply Base
PPOS Standby Boat
Offshore Operations Support
Includes Offshore Crew
Onshore Support
Maintenance
Fuel

PM Approval Including Insurance

Client

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Cost Estimation

Disconnection Includes preparation of Safety Case etc. for NUI

Field
Method Studies Engineering Includes Contractor Project Management

Other Surveys may be included in Contractor's Scope

Platform under headings below
Topsides Engineering
Jackets Surveys Module Separation and Structure Disconnection from
GBS Offshore Deconstruction Production Systems. Includes hire of temporary equipment.
NUI/MMI Preparation Accommodation
Reinstatement of Ballast Systems if re-floating
Support Vessels
Modifications
Logistics
Helicopters, Supply Boats,
Onshore Supply Base
Floater
Vessel Engineering Includes Contractor Project Management
Mooring Systems Surveys
Risers Disconnection Other Surveys may be included in Contractor's Scope
under headings below
Accommodation
Support Vessels Helicopters, Supply Boats,
Logistics Onshore Supply Base

Subsea
Subsea Structure Surveys Includes Contractor Project Management
Engineering
Helicopters, Supply Boats,
Logistics
Onshore Supply Base

Pipeline Includes Contractor Project Management

Pipelines Engineering
Flowline Surveys Other Surveys may be included in Contractor's Scope
under headings below
Umbilical DSV / Vessel
Cable Cut & Recover Spools & Assoc Eqpt Helicopters, Supply Boats,
Logistics Onshore Supply Base

Offshore Loading Includes Contractor Project Management

Risers Engineering
Offtake Systems Surveys Other Surveys may be included in Contractor's Scope
Mooring Systems Disconnection under headings below
Accommodation
Helicopters, Supply Boats,
Logistics
Onshore Supply Base

PPOS Standby Boat

Includes offshore crew
Offshore Operations Support
Onshore Support
Maintenance
Fuel

PM Approval Including Insurance

Client
Suspension (Cold)
(NUI / MMI) Field
Field Field Monitoring
Post Cleaning and
Hydrocarbon
PPOS Onshore Support
Freeing Includes maintenance and preservation of facilities &
Offshore Support & Maintenance
equipment for future use: Cranes, accomodation,
Maintenance walkways, safety equipment, etc.

PM Approval Including Insurance

Client

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Removal
Field
Method Studies Engineering Other Surveys may be included in Contractor's
Scope under headings below
New Technology eg. Removal Studies
Platform Including Cutting & Lifting Schemes & Contractor Project
Topsides Surveys Management
Jackets Engineering Spreader Beams, Reinforcement, Pad Eyes, Rigging.
Lifting Preparation
Offshore Deconstruction Topsides - Module Separation
Jackets - Cutting & Pile Cuttting
Lift Vessel
GBS - External Metalwork Removal,
Transportation Barges
Support Vessels May include transportation to shore if applicable.
Accommodation Could include Heavy lift, buoyancy techniques, or other
Debris Clearance new emerging technologies
Jacket Post Removal Survey & Trawl
Includes preparation and grillage
Drill Cuttings
Conductor, Riser, Caisson Removal Surveys, Relocation, Removal
Template Removal
Logistics Helicopters, Supply Boats,
Onshore Supply Base
GBS As above plus -
Cell Cleaning
Possible Derogation Reinstate Deballasting systems for Refloating

Floater Other Surveys may be included in Contractor's

Vessel Surveys Scope under headings below
Mooring Systems Engineering
Risers Offshore Deconstruction Including Cutting & Lifting Schemes & Contractor Project
Management
Anchor Handling
Lift Vessel
Towing Spread Including Barge Rental, clean up, mob/demob, Grillage,
Transportation Barges Sea Fastening, etc
Support Vessels
Accommodation
Transport to Shore Helicopters, Supply Boats,
Logistics Onshore Supply Base
Debris Clearance
Post Removal Survey & Trawl

Subsea Other Surveys may be included in Contractor's

Scope under headings below
Subsea Structures Surveys
Engineering
Including Cutting & Lifting Schemes &
DSV Support Contractor Project Management
Lift vessel
Transport to Shore Cutting including piles, templates, suction release, etc
Drill Cuttings
Debris Clearance
Post Removal Survey & Trawl Helicopters, Supply Boats,
Logistics Onshore Supply Base

Pipeline
Other Surveys may be included in Contractor's
Pipelines Surveys Scope under headings below
Consider phasing and scope of Flowlines Engineering
pipeline crossings Umbilicals DSV Support Vessel Includes Contractor Project Management
Cable Reel / SJ Lift Vessel
Transport to Shore Cut & Recover Spool Pieces & Equipment. Mattress
Trench & Backfill Removal.
End protection
Rockdumping
Debris Clearance
Post Removal Survey & Trawl
Helicopters, Supply Boats,
Logistics Onshore Supply Base

Offshore Loading
Other Surveys may be included in Contractor's
Risers Surveys Scope under headings below
Offtake Systems Engineering
Mooring Systems Offshore Deconstruction Includes Contractor Project Management
Lift Vessel
Could include Heavy lift, buoyancy techniques, or other
Transportation Barges
new emerging technologies
Support Vessels
Upending Operations Including Barge Rental, clean up, mob/demob,
Transport to Shore Grillage, Sea Fastening, etc
Debris Clearance
Post Removal Survey & Trawl Helicopters, Supply Boats,
Logistics Onshore Supply Base

PPOS Standby Boat

Including Warehousing, Procurement, etc.
Offshore Crew
Onshore Support

PM Approval Including Insurance

Client

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Cost Estimation

Disposal
Field Includes Contractor Project Management
Method Studies Engineering

Platform Includes partial Deconstruction in sheltered waters prior

Topsides Inshore Deconstruction to Onshore Disposal
Jacket Offloading
GBS Onshore Deconstruction Includes Craneage & Transportation to Yard.
Drill Cuttings Reuse/Recycle/Disposal
Includes Transportation Costs
Hazardous Waste Handling
Resale Value
Includes Transportation Costs
Scrap Value

Floater Includes partial Deconstruction in sheltered waters prior

Vessel Inshore Deconstruction to Onshore Disposal
Mooring Systems Offloading
Includes Craneage & Transportation to Yard.
Risers Onshore Deconstruction
Drill Cuttings Reuse/Recycle/Disposal Includes Transportation Costs
Hazardous Waste Handling
Resale Value Includes Transportation Costs
Scrap Value

Subsea Includes partial Deconstruction in sheltered waters prior

Subsea Structure Inshore Deconstruction to Onshore Disposal
Wells Offloading
Includes Craneage & Transportation to Yard.
Drill Cuttings Onshore Deconstruction
Reuse/Recycle/Disposal Includes Transportation Costs
Hazardous Waste Handling
Resale Value Includes Transportation Costs
Scrap Value

Pipeline Includes Craneage & Transportation to Yard.

Pipelines Offloading
Flowline Onshore Deconstruction Includes Transportation Costs
Cable Reuse/Recycle/Disposal
Umbilical Hazardous Waste Handling Includes Transportation Costs
Resale Value
Scrap Value
Includes partial Deconstruction in sheltered waters prior
Offshore Loading to Onshore Disposal
Risers Inshore Deconstruction
Offtake Systems Offloading Includes Craneage & Transportation to Yard.

Mooring Systems Onshore Deconstruction Includes Transportation Costs

Reuse/Recycle/Disposal
Hazardous Waste Handling Includes Transportation Costs
Resale Value
Scrap Value
Including Insurance

PM Approval
Client
Continuing Liability
Field
Field Method Studies Includes Inspection, Provision of Navaids & Repairs
Field Monitoring & Maintenance
Including Insurance
PM Commercial Setup Costs
Client
Legacy Costs

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Cost Estimation

Appendix 5
Supplementary Notes to Checklist

These notes are listed under the relevant Stage and they are intended to clarify
Checklist item contents. It is expected that they will be used as a supplement to
the Checklist which can be added to in order to reflect the up to date
experience of users.

General (applies to all Stages)

1. Insurance for the project is included in the PM cost for each stage
2. Engineering at all stages includes the Project Management team of the
Contractors.
3. Surveys will be required for all areas e.g. wells, pipelines, subsea
structures, platforms, FPSO moorings, Environmental Impact Assessment
etc. Consideration should be given to undertaking as many surveys as
possible whilst access is easily available using the existing operational
infrastructure.
4. Surveys may be listed under the heading “Surveys” in the Checklist or
may be included in Contractor's Scope at any stage.
5. PPOS Offshore Operations Support includes the offshore crew to provide
catering, deck crew and platform management and maintenance of Safety
Critical elements.

Preparation for CoP

1. Engineering could include Derogation Assessment.
2. Surveys are required as typically “as-builts” are often not up to date and
construction drawings may be difficult to locate.
3. Preparation of Decommissioning Plan typically includes Studies,
Comparative Assessment, External Reviews, Public Consultation,
Planning & Communications. Reference - DECC Guidelines, UK Oil & Gas
Stakeholder Guidelines etc.
4. Commercial/Contractual Considerations are the agreements for Access,
Pipeline crossings, etc. and the Decommissioning Project Contract
Strategy.

Suspension (Live)
1. PPOS activities will include maintenance and preservation of facilities &
equipment for future use: Cranes, accommodation, walkways, safety
equipment, etc.

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Well Abandonment
1. Well Engineering includes Contractor Project Management, review of well
files, review of well categorisation (both platform and sub-sea wells).
2. In general, where a workover vessel / rig is necessary for
decommissioning, wells are generally treated, plugged and abandoned
and, where relevant, conductor removed in one mob/demob.
3. Work on wells during the Preparation stage (Rig or Rigless) is included in
case the option to decommission some wells before Cessation of
Production is exercised.
4. Site Preparation for subsea wells includes net removal, leak check, tree
preparation and protective structure check.

Cleaning
1. Disposal routes for the cleaning medium for topsides and pipelines need
to be considered early in the process to identify optimum efficiency and to
maximise use of existing equipment.
2. Hazardous Waste Management should include Radioactive Sources,
PCB's, Mercury, Isocyanates (paint), LSA (Low Specific Activity
radioactivity) and any Trans-Frontier shipment of Waste.

Disconnection
1. Topsides Offshore disconnection includes disconnection from production
systems and module separation. Where single lift is possible scope will
be limited.
2. Gravity Base Structures - Offshore deconstruction includes the
reinstatement of de-ballasting systems if re-floating.
3. In addition to manpower, hire of temporary equipment may be required to
support disconnection activity.

Suspension (Cold)
1. The scope that applies to the suspension of activities with no
hydrocarbons present. PPOS Maintenance includes maintenance and
preservation of facilities & equipment for future use: Cranes,
accommodation, walkways, safety equipment, etc.

Removal
1. Engineering includes cutting and lifting schemes and contractor project
management.
2. Lifting preparation includes supply and installation of spreader beams,
reinforcement, pad eyes and rigging.

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30 Issue 2, December 2010
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3. Offshore Deconstruction for Topsides is the final module separation work

by the removal contractor. For Jackets it includes the cutting of tubular
members and piles and for the GBS the removal of external steelwork
(risers, conductor guides).
4. Grillage and sea fastenings are included in the transportation barge costs.
Mob / demob, clean up and tugs also need to be included.
5. Floater Vessel Transportation includes Towing Spread to tow Floater to
inshore or port for dismantling.
6. Subsea Structures removal includes cutting of piles, templates, and
release of suction piles, etc.
7. Pipelines, Flowlines, Umbilicals and Cables removal should consider
scope and phasing of removing crossings. These may be delayed until
the line being crossed is no longer in use and it should be clear in the
estimate assumptions whether the later work scope is included.
8. DSV Support Vessel will cut and recover spool pieces and equipment,
remove mattresses and install end protection.
9. Lift vessel could include a Heavy Lift vessel, buoyancy tanks or other new
emerging technologies.
10. Piece small deconstruction is an option for topsides removal. It would
normally require a support vessel to provide accommodation and
craneage.
11. Derogation can be considered for the footings of large steel jackets and
concrete structures. For the concrete structures it may be applied to all or
part of the structure.
12. The Post Removal Survey & Trawl applies to platforms and pipelines.

Disposal
1. Inshore Deconstruction is the partial deconstruction in sheltered waters
prior to onshore disposal of the components.
2. Offloading includes craneage and cost of mobilisation of trailers to the
yard.
3. Reuse / recycle / disposal and Hazardous waste handling should include
the transportation costs.

Continuing Liability
1. Field Monitoring and Maintenance includes provision, inspection and
repairs of navaids (buoys and lights) and inspection of any remaining
pipelines.
2. Client costs include insurance and commercial set up costs (e.g.
redefining Joint Operating Agreements post removal).

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32 Issue 2, December 2010
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Appendix 6
Regulatory Regime

Regulatory items and bodies of relevance to decommissioning costs include:-

UN Convention on Law of the Sea 1982, in particular Article 60(3).

International Maritime Organisation IMO – Guidelines & Standards.

Marine Act England & Wales – separate for Scotland

OSPAR, in particular 98/3 - UK, Norway and the EU.

UK Petroleum Act 1998 Part IV, section 29 in particular.

Energy Act 2008

UK DECC takes particular interest in the financial security aspects of a
development from the Field Development Plan (FDP) stage.

International Accounting Standards Board (IASB, independent private
sector body).

UK Oil Industry Accounting Committee (OIAC), in particular FRS12.

Oil & Gas UK Standard Oil Industry Accounting Procedures (SOAP).

UK Accounting Standards Board (ASB).

US Securities & Exchange Commission (SEC).

US Financial Accounting Standards Board (FASB) in particular FSA 69 &
143.

US Sarbanes-Oxley (SOX) compliance (sections 302 & 404 in
particular).
In addition to the above regulations the DECC Decommissioning Guidance
notes and Oil & Gas UK Guidelines for the Suspension and Abandonment of
Wells provide guidance on how to meet the above regulations.

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