Decommissioning

Most companies have at least two ways in which to defer the decommissioning of a field or installation  

In some cases, where production is subject to high taxation, tax concessions may be negotiated, but generally host governments will expect all other means to have been investigated first  

Maintenance and operating costs represent the major expenditure late in field life. These costs will be closely related to the number of staff required to run a facility and the amount of hardware they operate to keep production going. The specifications for product quality and plant up-time can also have a significant impact on running costs. 

As decommissioning approaches, enhanced recovery e.g. chemical flooding processes are often considered as a means of recovering a proportion of the hydrocarbons that remain after primary production. The economic viability of such techniques is very sensitive to the oil price, and whilst some are used in onshore developments they can rarely be justified offshore at current oil prices. 

Usually a company will have a portfolio of assets which are at different stages of the described life cycle. Proper management of the asset base will allow optimisation of financial, technical and human resources. 

The design and implementation of inherently safer chemical processes includes consideration not only of the people operating and maintaining the plant while it is in operation, but also the safety of those who may later use the plant for other purposes. This includes dismantling 

Attention must be given to the long term protection of people or the environment from hazards from abandoned equipment. Equipment that meets the criteria for disposal in a landfill—that is, it has been properly cleaned—may not be suitable for other uses. Problems such as the one related in the following example can be avoided by making the abandoned equipment unusable if it cannot be cleaned adequately. 

Reactors equipped with heavy agitators used for tetraethyl lead manufacture during World War II were disinterred from bomb rubble and were found by the people who dug them up to be ideal for processing fish paste for human consumption. The reactors were washed, but this did not prevent poisoning a number of people. 

Heavy-walled drums once used for lead antiknock chemicals have been used for water storage or as barbecue pits, with subsequent risk to the user from residual toxic material. Equipment from the industry cited has for many years been cleaned, cut up, and sent under supervision to steel mills for recycle to eliminate the possible misuse of scrapped containers. 

Techniques mentioned here are applicable throughout the installation s operational lifetime, 

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This Hydrocarbon Exploration and Production is going to take you through all of the major stages In the life of an oil or gas field from exploration, through appraisal, development planning, production, and finally to decommissioning. 

In high permeability reservoirs, wells may produce dry oil for a limited time following a shut-in period, during which gravity forces have segregated oil and water near the wellbore. In fields with more production potential than production capacity, wells can be alternately produced and shut in (intermittentproduction) to reduce the field water cut. This may still be an attractive option at reduced rates very late in field life, if redundant facilities can be decommissioned to reduce operating costs. 

Initially, if operating costs can be divided based on production throughput, the satellite development project may look attractive. However, the unit costs of the declining host field will eventually exceed income and the satellite development may not be able to support the cost of maintaining the old facilities. If the old facilities can be partly decommissioned, and provision made for part of the abandonment cost, then the satellite development may still look attractive. The satellite development option should always be compared to options for independent development. 

Introduction and Commercial Application Eventually every field development will reach the end of its economic lifetime. If options for extending the field life have been exhausted, then decommissioning will be necessary. Decommissioning is the process which the operator of an oil or natural gas installations will plan, gain approval and implement the removal, disposal or re-use of an installation when it is no longer needed for its current purpose. 

The cost of decommissioning may be considerable, and comes of course at the point when the project is no longer generating funds. Some source of funding will therefore be required, and this may be available from the profit of other projects, from a decommissioning fund set up during the field life or through tax relief rolled back over the late field production period. 

Decommissioning is often a complex and risky operation. The five key considerations are the potential impact on the environment, potential impact on human health and safety, technical feasibility, costs of the plan, and public acceptability. 

Decommissioning may be achieved in different ways, depending on the facilities type and the location. This section will also briefly look at the ways in which decommissioning can be deferred by extending the field life, and then at the main methods of well abandonment and facilities decommissioning. 

National governments play an extensive role in assessing and licensing decommissioning options. Most countries which have offshore oil and natural gas installations have laws governing decommissioning. 

The planning of decommissioning activities involves extensive periods of consultations with the relevant authorities and interested parties, such as fishing and environmental groups. 

The economic lifetime was introduced in Section 13.3, and was defined as the point at which the annual cashflow turned permanently negative. This is the time at which income from production no longer exceeds the costs of production, and marks the point when decommissioning should occur, since it does not make economic sense to continue to run a loss-making venture. Technically, the production of hydrocarbons could continue beyond this point but only by accepting financial losses. There are two ways to defer decommissioning ... 

If a company has a number of projects at various stages of development, it has the option to pay for decommissioning with cash generated from younger fields. A company with only one project will not have this option and may choose to build up a... 

The basic aim of a decommissioning programme is to render all wells permanently safe and remove most, if not all, surface (or seabed) signs of production activity. How completely a site should be returned to its green field state, is a subject for discussion between government, operator and the public. 

Each of the main facility types, e.g. steel jacket, gravity structure, tension leg and floating platform, have different options for decommissioning. The main factors which need to be considered and which will impact on costs are type of construction, size, distance from shore, weather conditions and the complexity of the removal, including all safety aspects. The following options are available ... 

Subsea facilities are easily decommissioned as they are relatively small and easy to lift. However, subsea manifolds and templates can weigh in excess of 1,000 tons and will require heavy lift barges for removal. 

It is no longer acceptable in most countries to treat decommissioning as an issue that can be ignored until the end of a project. Increasingly operators are being required to return industrial sites to their original condition after use. Many operators now perform a base line survey before they build on an area so that the impact of operations can be quantified, and in some cases so that they are not held responsible for the pollution of previous site owners. 

The International Offshore Oil and Natural Gas Exploration and Production Industry (1996), Decommissioning Offshore Oil and Gas Installations Finding the Right Balance ... 

Other wastes are expected to arise from the decontarnination and decommissioning of existing nuclear faciHties. These include reactors at the time of life extension or at the end of their operating life. Whereas technologies are available for waste disposal, as of this writing (ca 1995) there is much pubHc resistance to the estabHshment of disposal faciHties. 

The recycle weapons fuel cycle rehes on the reservoir of SWUs and yellow cake equivalents represented by the fissile materials in decommissioned nuclear weapons. This variation impacts the prereactor portion of the fuel cycle. The post-reactor portion can be either classical or throwaway. Because the avadabihty of weapons-grade fissile material for use as an energy source is a relatively recent phenomenon, it has not been fully implemented. As of early 1995 the United States had purchased highly enriched uranium from Russia, and France had initiated a modification and expansion of the breeder program to use plutonium as the primary fuel (3). AH U.S. reactor manufacturers were working on designs to use weapons-grade plutonium as fuel. 

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