Using the ALARP principle to significantly reduce offshore decommissioning costs
Max J. Goodwin A B , Lucy D. Muir A and Francesco Piasentin AA S2V Consulting Level 7, 197 St Georges Terrace, Perth, WA 6000, Australia.
B Corresponding author. Email: max.goodwin@s2vconsulting.com
The APPEA Journal 57(2) 455-458 https://doi.org/10.1071/AJ16146
Accepted: 17 March 2017 Published: 29 May 2017
Abstract
Lurking on the balance sheet of all offshore operators is a line item typically referred to as ‘abandonment costs’. Such costs are usually estimates made using assumptions of total removal and can run into the tens or hundreds of millions of dollars. In the next 25 years, it is estimated that 100 offshore oil-production installations will need to be decommissioned in Australia, with an anticipated cost in excess of AU$1.2 billion.
Most jurisdictions around the world ostensibly require total removal of all facilities post-production. In Australia and elsewhere, including the Gulf of Mexico and North Sea, there is an opportunity to propose deviations from total removal if there are good grounds for doing otherwise. The main alternative to removal, that is, in situ decommissioning, can offer many advantages including reduced cost, environmental impact and worker exposure to safety hazards.
Furthermore, the application of a stage-gate project approach – more traditionally used in oil and gas development stages (appraise, select, define, execute) – enables the effective integration of the inputs from the wide variety of stakeholders involved in a decommissioning project, as well as efficiently handling the potentially large volume of information and analysis that is involved.
Drawing on recent project experience, this paper describes the practical approaches needed to ensure a robust assessment and determination of ALARP.
Keywords: abandonment, DMP, environment, facilities, NEBA, NOPSEMA, pipelines, safety, subsea.
Max Goodwin is an environmental specialist with more than 20 years of worldwide industry experience, primarily in oil and gas exploration and production. He is General Manager with S2V Consulting in Perth. His skills and experience include environmental and safety engineering and management at all stages of asset life cycle from exploration and conceptual studies through to decommissioning, environmental approvals and regulatory compliance, including Australian Commonwealth and state, EHS management-system implementation and assessment/auditing. |
Lucy Muir is Manager of S2V Consulting Environment team and is a degree-qualified marine biologist and oceanographer who has worked after her degree in tropical regions on coral-reef conservation and restoration, including producing publications on the subject; she has an in-depth knowledge of the marine environment. She is an experienced diver and has conducted many field studies and training and research programs. Lucy’s recent work has been focused on environmental engineering and impact assessment in the oil and gas industry, both offshore and onshore. |
Francesco Piasentin is a Facilities consultant with S2V Consulting, with a diverse international career focussed on upstream field development and project execution throughout the project life-cycle. He has worked as a consultant on onshore and offshore developments from acquisition/pre-exploration to FID, and as an operator on EPCIC execution in technical and contract manager roles. His main skills include field development planning and framing, feasibility assessment and concept screening/selection, floating systems, offshore installation technologies and strategy, project economics and value opportunity identification. |
References
Barrymore, S., and Butler, A. (2015). Decommissioning facilities in Australia’s offshore areas: whose responsibility? In ‘Proceedings from the AMPLA Conference’, Perth, 21–23 October 2015.IMO (1989). ‘Guidelines and Standards for the Removal of Offshore Installations and Structures on the Continental Shelf and in the Exclusive Economic Zone (IMO Resolution A. 672 (16), adopted on 19 October 1989).’ (International Marine Organization)
NOPSEMA (2015). Subsea, environment and decommissioning: a regulatory context. Presentation by Carissa Aitken to Society of Underwater Technology, 2015. Available at http://www.sut.org/wp-content/uploads/2014/09/Carissa-Aitken-Presentation-Society-for-Underwater-Technology-October-2015-WEB-APPROVED.pdf [Verified 21 March 2017].
DMP (2016). ‘Petroleum Decommissioning Guidelines, Exposure Draft 1.’ (Department of Mines and Petroleum)
