Updated: Jul 11, 2018
Having attended the Finding Petroleum seminar, Decommissioning- the D Word in June, and having just attended SPE Offshore Europe with colleague Greg Coleman, there is clearly growing interest in decommissioning in the North Sea. The challenges are growing as the scale of the well and platform deconstruction issues are unearthed.
Risk assessment and risk management are the keys to getting the most cost effective solution for all stakeholders. Investor returns are usually the primary consideration in oil and gas developments. In decommissioning, the UK Treasury will pay a substantial cost of decommissioning due to Petroleum Revenue Tax rebates and offsetting Special Tax and Corporation Tax, so is should be interested finding the best solution. Employment opportunities and developing expertise for international deployment also feature highly in stakeholder interests.
In our view, maximising economic recovery of oil and natural gas resources in mature assets is where the majority of financial value is realised. The alignment with the Oil and Gas Authority agenda is welcome. Delaying the date of Cessation of Production and commencement of deconstruction allows for better and more detailed planning as well as maximising revenue from production. This will require hands on operational and well management expertise, managed risk taking and careful cost control.
Integrating aspects of creative financing, late life production management and well operations to efficient deconstruction with novel solutions is important for all the stakeholders. Email info@PetroMall.org and ask us about how we can help you structure your next asset deal.