As shallow-water fields around the world are reaching the end of their production lives, particularly in the Gulf of Mexico and the North Sea, the need for the plugging and abandonment (P&A) of those wells is massive. This push to permanently seal these non-productive wells via cement plugs, vice “turning the spigot off” is being driven by regulatory and governmental bodies as a means to remove the threat of an environmental incident.
Keppel FELS notes that between the Gulf of Mexico and the North Sea, there are over 18,000 wells that would fall into this category.
Considering the market for vessels specifically-built to accomplish the task of P&A, Keppel FELS and Workfox B.V – a subsidiary of Seafox Group, are working together to come up with a purpose-built accommodation jackup rig with well intervention and P&A features based on Keppel’s J-Class harsh environment design.
This new rig will be called Seafox 8 and will have accommodations for 282 persons while accomplishing the P&A tasks at day rates 25 to 30 percent lower than existing jack-up rigs. The rig will be able to work in waters up to 112 meters in depth.
Keppel notes this rig “will be the first accommodation and service jackup unit that is specifically suited to support rigless activities for P&A and well services at a competitive cost.”
It is expected that upon completion of the initial study for this project, Keppel O&M and Seafox will enter into a joint venture to place an order for the Seafox 8 in the second half of 2014.
Mr Keesjan Cordia, CEO of Seafox, commented on the proposed design noting, “it is a real workhorse and unlike drilling rigs which are often used to do P&A currently, Seafox 8 has the crane capacity to assist with maintenance and well services activities. It has NORSOK-specified accommodation for crew and client personnel, and a lower operating cost than existing equipment with a single role purpose.”
This isn’t the first time Keppel O&M and Seafox have worked together. The two companies currently have a 49/51 joint venture in the 2012-built Seafox 5, an offshore wind turbine installation vessel which was built to Keppel’s proprietary MPSEP design. Since delivery, Seafox 5 has successfully installed 80 monopiles for offshore wind turbines in the German Sector of the North Sea and is currently deployed for Maersk Oil and Gas for accommodation and maintenance work.
After its contract with Maersk, Seafox 5 will be chartered to DONG Energy E&P to service their operation at the Hejre field, in the Central North Sea, off the coast of Denmark.
The Plug and Abandonment Market – via Keppel
Industry estimates put as many as 12,000 wells in the Gulf of Mexico which qualify as P&A candidates. In the UK sector of the North Sea alone, it is estimated that more than 500 structures with about 3,000 wells are slated for permanent abandonment in the near future. In the Norwegian sector of the North Sea, more than 350 platforms and more than 3,700 wells eventually must be permanently abandoned. Nearly 70 per cent of the forecast wells P&A expenditure is in the Central and Northern North Sea, equating to £3.1 billion. Almost 480 wells are scheduled for decommissioning in these regions, of which nearly 60 per cent are platform wells.
There are currently two methods of P&A. The first is using the available equipment on a fixed platform to execute the P&A without the support of a rig. This method is almost always faced with constrains on deck and bed space limitations, multiple logistics challenges and the downside of high man-hours. Another method is using drilling rigs with the use of third party equipment. However, drilling rigs’ dayrates are rather expensive for such applications.