In the previous article, we looked at 6 Key Well Abandonment and Decommissioning Challenges and I promised to share with you some of the latest decommissioning technologies and strategies which are in use or being developed and tested today in the Oil & Gas sector.
But first, I think it is important to explain the importance of the need for innovation to tackle the enormous challenges we face with decommissioning in the coming years. Let's do that by looking at a case study of the UK Continental Shelf (UKCS)..
Case Study - UKCS Decommissioning Challenge
The UKCS Decommissioning 2017 Cost Estimate Report provided a cost estimate for offshore oil and gas decommissioning in the UK Continental Shelf (UKCS) of £59.7 billion in 2016 prices. The Oil & Gas Authority (OGA) has set an ambitious target to reduce these costs by at least 35%.
“The two biggest things that will get the North Sea through the next five years are genuine collaboration and the development and application of technology ... that strategy can halve the cost of well plugging and abandonment” Sir Ian Wood
In a recent interview with Energy Voice, Sir Ian Wood summarised the way forward for decommissioning very well, highlighting a need for improvements in technology and also improved collaborations to reduce costs. In this article I will discuss both the latest decommissioning technologies and decommissioning strategies..
LATEST DECOMMISSIONING TECHNOLOGIES
1. Melting the Cap Rock
Melting the cap rock is a method of decommissioning which uses a thermite plug to seal off the well by melting both the well components and the rock formation around them to recreate the cap rock, i.e. Caprock barrier
The low-cost method of rigless well P&A was trialed onshore by Centrica in Canada in 2016, the trial results demonstrated that this technology could potentially reduce well P&A costs by more than 50%.
2. Resin Plugs
Resin has the ability to formulate completely free of solids, allowing it to penetrate microchannels and effectively seal leaks which may not be possible to seal with cement due to it’s particle size.
Resin Application in P&A includes squeezing for annular fluid flow; shut-off gas source and squeezing a previously leaking plug.
Oceaneering recently conducted the Gulf of Mexico’s first permitted lower abandonment using resin. Because there was a downhole obstruction, the operator of this particular field determined that it could not reliably carry out a lower temporary abandonment with cement.
3. Underwater Drones to Monitor Abandoned (P&A) Wells for Potential Hydrocarbon Leaks
Praxis Energy Partners have proposed an innovative cost-saving solution for postoperative surveillance to ensure a leak-free subsea well abandonment over time.
The project proposes to build an underwater drone, using passive acoustics (to "listen" for leaks), and/or sonar (to "ping" for leaks), and/or a camera (take pictures of “bubbles”).
4. Well Barrier Monitoring System
The Stuart Wright Right Time Barrier Condition (RTBC) proprietary wellbore monitoring software can be used in both the well P&A planning and execution phases to accurately capture the condition of the well prior to and during the well abandonment.
During the planning phase, RTBC can be used to create accurate as built wellbore diagrams with critical barrier integrity validation information captured through the generation of Daily Integrity Reports (DIR) performed retrospectively. The DIRs will incorporate key information from the drilling, completions, production and intervention phases to accurately capture the condition of the well and any potential barrier risks that require consideration prior to commencing the well P&A.
During the well execution phase, RTBC will create accurate as built wellbore diagrams with critical barrier integrity validation information captured through the generation of Daily Integrity Reports during the actual wells abandonment. The Daily Integrity Reports will be captured in a secured cloud database that tracks the progression of the abandonment from the perspective of ensuring the abandonment of well barriers are conducted in accordance to corporate or good abandonment practices.
(Disclaimer: I am a consultant employed by Stuart Wright)
5. Suspended Well Abandonment Tool (SWAT)
Claxton have developed a Suspended Well Abandonment Tool (SWAT) which is deployed through the moonpool, landed on the wellhead and then used to conduct casing perforation and placement of the required cement barriers in the well. It can be deployed from a vessel, removing the need for a drilling rig.
6. Gator Perforator
Lee Energy Systems have created this "REPEATABLE HYDRO MECHANICAL MULTI-USE PERFORATING SYSTEM" which can be used to perforate casing without the need for explosives. The video above demonstrates really well how the tool operates, please watch it at your convenience to find out more about this technology.7. Latest P&A Technology
Archer and Hydrawell both offer systems which can offer significant time savings, compared to a typical well P&A, by eliminating the need to perform a milling section and performing the perforation and cementing in a single trip.
"HydraWell’s technology enables plugging of each well in 2-3 days instead of 10-14 days with conventional section milling methods. This means that the operator could save up to 200 rig days on a 20-well field,” says Mark Sørheim, CEO of HydraWell.
Archer Stronghold™ Systems
Archer's Stronghold™ Barricade™ is designed to perforate selected casing or liner sections; wash and clean the perforated zone completely; then enable permanent rock-to-rock cement plugging—all during a single trip.
The HydraHemera™ system was developed to enable plugging a well across multiple annuli without performing a section milling operation.
The system consists of two components, a HydraHemera™ Jetting Tool and a HydraHemera™ Cementing Tool. The HydraHemera™ Jetting Tool is used to wash and clean out debris in the annuli behind perforated casings. It features jet nozzles which are positioned at irregular angles and engineered for optimum configuration and exit velocity. The jets penetrate and clean thoroughly behind multiple perforated casings.
The HydraHemera™ Jetting Tool ensures optimum conditions in the casing annuli prior to placing the plugging material in the cross section. Debris, old mud, barite and old cuttings are replaced by clean mud.
Using a ball drop mechanism after jetting, the HydraHemera™ Cementing Tool is activated, and combined with the HydraArchimedes™ tool enable placing plugging material in the entire cross section of multiple annuli, and hence, establishing a proper barrier in the well for P&A or sidetrack purposes.
You can view a video of the HydraHemera™ system here.
LATEST DECOMMISSIONING STRATEGIES
Historically, the oil and gas industry has not been particularly strong in collaborating and cross-sharing information. In today's low oil price environment, especially in the area of decommissioning where cost saving is paramount, there is now an increased impetus towards collaboration. Below are some examples of collaborations focused around decommissioning and well abandonment.
1. OGA Well Plug and Abandonment (P&A) Optimisation Programme
In February 2017, the Oil and Gas Authority (OGA) launched a search for operators to voluntarily participate in a multi-operator, well P&A optimisation programme.
The objective of the pilot programme is to demonstrate the cost savings which can be achieved through collaborative working, stimulate work-sharing campaigns and adopt improved execution and contracting models.
It will be interesting to see how successful this initiative is and how many Operators opt to sign up for the programme.
2. Integrated Consortiums
In answer to Operator's desire to have a single point solution for decommissioning, a number of consortiums have formed to provide such an offering. One such example is the Bureau Veritas - Stuart Wright consortium which was recently formed to support clients in the North Sea, Asia-Pacific and beyond.
Tackling the enormous challenge of decommissioning will require not only advances in technology but also smarter strategies on how to collaborate to improve efficiency, knowledge sharing and reduce costs.
I have highlighted a few examples of the latest decommissioning technologies and strategies in this article as a starting point for discussion, it would be great to use this platform to hear from you on other technologies and strategies which you have knowledge of or experience with - PLEASE COMMENT BELOW..
Something interesting to share?
Join NrgEdge and create your own NrgBuzz today
Headline crude prices for the week beginning 11 February 2019 – Brent: US$61/b; WTI: US$52/b
Headlines of the week
Midstream & Downstream
Global liquid fuels
Electricity, coal, renewables, and emissions
2018 was a year that started with crude prices at US$62/b and ended at US$46/b. In between those two points, prices had gently risen up to peak of US$80/b as the oil world worried about the impact of new American sanctions on Iran in September before crashing down in the last two months on a rising tide of American production. What did that mean for the financial health of the industry over the last quarter and last year?
Nothing negative, it appears. With the last of the financial results from supermajors released, the world’s largest oil firms reported strong profits for Q418 and blockbuster profits for the full year 2018. Despite the blip in prices, the efforts of the supermajors – along with the rest of the industry – to keep costs in check after being burnt by the 2015 crash has paid off.
ExxonMobil, for example, may have missed analyst expectations for 4Q18 revenue at US$71.9 billion, but reported a better-than-expected net profit of US$6 billion. The latter was down 28% y-o-y, but the Q417 figure included a one-off benefit related to then-implemented US tax reform. Full year net profit was even better – up 5.7% to US$20.8 billion as upstream production rose to 4.01 mmboe/d – allowing ExxonMobil to come close to reclaiming its title of the world’s most profitable oil company.
But for now, that title is still held by Shell, which managed to eclipse ExxonMobil with full year net profits of US$21.4 billion. That’s the best annual results for the Anglo-Dutch firm since 2014; product of the deep and painful cost-cutting measures implemented after. Shell’s gamble in purchasing the BG Group for US$53 billion – which sparked a spat of asset sales to pare down debt – has paid off, with contributions from LNG trading named as a strong contributor to financial performance. Shell’s upstream output for 2018 came in at 3.78 mmb/d and the company is also looking to follow in the footsteps of ExxonMobil, Chevron and BP in the Permian, where it admits its footprint is currently ‘a bit small’.
Shell’s fellow British firm BP also reported its highest profits since 2014, doubling its net profits for the full year 2018 on a 65% jump in 4Q18 profits. It completes a long recovery for the firm, which has struggled since the Deepwater Horizon disaster in 2010, allowing it to focus on the future – specifically US shale through the recent US$10.5 billion purchase of BHP’s Permian assets. Chevron, too, is focusing on onshore shale, as surging Permian output drove full year net profit up by 60.8% and 4Q18 net profit up by 19.9%. Chevron is also increasingly focusing on vertical integration again – to capture the full value of surging Texas crude by expanding its refining facilities in Texas, just as ExxonMobil is doing in Beaumont. French major Total’s figures may have been less impressive in percentage terms – but that it is coming from a higher 2017 base, when it outperformed its bigger supermajor cousins.
So, despite the year ending with crude prices in the doldrums, 2018 seems to be proof of Big Oil’s ability to better weather price downturns after years of discipline. Some of the control is loosening – major upstream investments have either been sanctioned or planned since 2018 – but there is still enough restraint left over to keep the oil industry in the black when trends turn sour.
Supermajor Net Profits for 4Q18 and 2018
- 4Q18 – Net profit US$6 billion (-28%);
- 2018 – Net profit US$20.8 (+5.7%)
- 4Q18 – Net profit US$5.69 billion (+32.3%);
- 2018 – Net profit US$21.4 billion (+36%)
- 4Q18 – Net profit US$3.73 billion (+19.9%);
- 2018 – Net profit US$14.8 billion (+60.8%)
- 4Q18 – Net profit US$3.48 billion (+65%);
- 2018 - Net profit US$12.7 billion (+105%)
- 4Q18 – Net profit US$3.88 billion (+16%);
- 2018 - Net profit US$13.6 billion (+28%)