In the last 10 years the Oil & Gas Industries have begun tackling the complex issues related to the end-of-life of Upstream Assets Decommissioning. Theses are especially relevant for offshore activities due to their environmental impact and the elevated costs.

The introduction of the SFAS 143 principle in the United States, which defines the criteria for Decommissioning and Abandonment costs of production assets allocation and establishment, for companies listed on the New York Stock Exchange, requires such companies to report Abandonment funds.

In Eni E&P a tool for decommissioning cost estimating (property of Eni E&P Division) was required in order to evaluate the abandonment fund quickly and with a good accuracy.

The work to be performed was: to inspect all the techniques for topside total removal, abandonment and removal of substructure and sealines, taking into account local and international legal constraints, then to evaluate cost–estimate key drivers. A unique cost breakdown structure has been defined for all methodologies in order to guarantee the congruity of the estimate: vessel, personnel and equipment are the three cost parameters used to evaluate the main cost elements such as Mobilization/Demobilization, Survey Pre/Post Removal, Flushing and Clean Up, Equipment and Personnel for Removal, Engineering & Management and Onshore Final Disposal.

Information about techniques, field of operation, advantages/disadvantages and unit costs have been gathered by analyzing Eni’s experiences, through a benchmarking of the most important international competitors, and through experts’ opinion.

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