Decommissioning Insight 2017

3.3 Planning for Decommissioning The decommissioning process across the North Sea involves rigorous planning and consultation with regulators several years before production ceases. Decommissioning regulations, physical interdependencies of other fields, asset and equipment integrity, safety and environmental considerations, available technologies and market conditions are some of the factors that will determine the approach. Over time, the scope of each project is refined as engineering studies and comparative assessments are carried out to determine the optimum approach. Forecasting the precise schedule of each activity and the associated expenditure at the outset of a project is therefore challenging. In addition to the complexities involved in planning each decommissioning project, there is also a great deal of uncertainty around the date that production will cease. CoP is not solely driven by oil price and the economics of the field. On older assets, CoP may be driven by asset integrity challenges, or it may be dependent on the economics of other interlinked fields or third-party tie-backs. In some cases, operators may continue production on sub-economic infrastructure because it acts as a host to other fields. On the UKCS, operators must gain regulatory approval from the OGA to cease production and often need to demonstrate that they have looked at different scenarios for maximising economic recovery of reserves and possible reuse of infrastructure. Infill drilling, subsea systems restructuring, near-field exploration and transfers in asset ownership are ways that operators can extend field life. Oil & Gas UK has analysed 23 UK asset transfers since 2011, which reveal that deals have extended field life by 4.8 years on average, with some fields producing for up to an additional 14 years.



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