Decommissioning Cost Reduction by Effective Planning of Decommissioning Projects Using Facility Removal Date as a Reference Point

This paper reviews the existing planning process for decommissioning projects on the United Kingdom Continental Shelf (UKCS) and explores an alternative approach of planning decommissioning activities with reference to ‘Facility Removal Date’ rather than with reference to ‘Cessation of Production Date’.

This alternative approach aims to enable a more effective planning of decommissioning activities in a high oil price and limited supply chain capacity environment to achieve cost reduction by:

1. Improve Supply Chain Impact on Decommissioning Projects

2. Provide Better Opportunities for Aggregation of Scope

3. Promote Development of the Supply Chain

This alternative planning approach offers a way for project engineers to plan decommissioning activities by using a new point of reference which offers a clearer distinction that separates well plugging and abandonment and facility’s removal operations in decommissioning projects. This alternative approach involves putting ‘Facility Removal Date’ as the main starting point of reference when planning decommissioning activities. This is an emergent insight from research investigating development of stakeholder-oriented critical paths, which was carried out using a mixed-method methodology incorporating

1. Case Studies on Decommissioning Projects in the UKCS

2. Semi-structured Interviews with Industry Representatives in the UKCS

This alternative approach demonstrates the importance of the supply chain as a stakeholder in the UKCS decommissioning landscape. This paper will discuss the anticipated increase in demand and decommissioning activities in the UKCS and how it will correspond to an increasing supply chain influence and subsequent impacts on decommissioning projects. It will also show the effect of changing well plugging and abandonment strategies over the years on the change in significance of the ‘Cessation of Production Date’ and ‘Facility Removal Date’.

This paper will discuss the emergent insights discovered when using ‘Facility Removal Date’ during the development of the critical paths. It will then further discuss how using ‘facility removal date’ in decommissioning planning can enable a more effective scheduling of activities, reduce uncertainty for the supply chain, and promote aggregation of scope, leading to cost reduction in decommissioning. The discussions will be further supported by qualitative data obtained from semi-structured interviews used for the development of the stakeholder-oriented critical paths.