A.P. Moller – Maersk’s new oil rig decommissioning unit had its name unveiled last week along with confirmation that its senior management team is now in place.
The new company, named Maersk Decom, was established in April 2018 as a 50-50 joint venture between Maersk units Maersk Drilling and Maersk Supply Service.
The joint venture will initially offer bundled decommissioning solutions to operators in the global oil and gas industry. It will initially cover up to 80% of the decommissioning process, including project management, well plug and abandonment, towage of floating units and removal of subsea infrastructure. In the long-term, the company plans to provide the full end-to-end process of decommissioning.
After decades of production, an increasing amount of offshore oil and gas fields are approaching the end of their economic life.
According to Maersk, in the North Sea alone, more than 400 fields are expected to cease production by 2026 at an estimated cost of USD 56 billion. Globally, over 700 fields are expected to require decommissioning.
Despite the recent uptick in oil price, decommissioning projects are still scheduled to move forward due to drivers such as infrastructure integrity, class approval and recertification, and limited export infrastructure, according to Maersk.
“Operators in the North Sea can see the value that Maersk Decom brings to the table. By offering bundled solutions and project management covering, to start out with, up to 80% of the decommissioning value chain, they can entrust the majority of the work scope to one dedicated and experienced point of contact. Simplifying the delivery model in this way enables us to lower the risk and overall cost for our customers,” says Jens Klit Thomsen, CCO of Maersk Decom.
Maersk Decom is headquartered at the Maersk Drilling and Maersk Supply Service joint headquarters in Lyngby, Denmark.
Maersk’s Decom’s senior management team consists of CEO Lars Banke, previously from Total, CCO Jens Klit Thomsen, previously from Maersk Supply Service, and CTO Carsten Sander Jacobsen, previously from INEOS Denmark, all of whom are now in place, Maersk says.
Maersk Drilling and Maersk Supply Service have both done decommissioning work for various clients. Since 2016, Maersk Supply Service has been project managing and executing the full scope of decommissioning services for the Janice, James and Leadon subsea fields in the UK North Sea for the operator Total after it acquiring Maersk Oil.
While Maersk Drilling did the plug and abandonment (P&A) for the James and Leadon wells, Maersk Supply Service provided the marine asset coverage on all three subsea fields and took on the responsibility for the engineering, subcontractor management, offshore planning, interface management and associated logistics, as well as the disposal of recovered facilities from the seabed through management of waste disposal contractors.
Under the terms of the deal, both Maersk Drilling and Maersk Supply Service will provide an investment of USD $20 million covering the first years of Maersk Decom’s operations, in addition to providing assets through standard commercial conditions.
“With the leadership team established, we have now turned our attention to finding the right resources and collaboration partners to build an organization that is able to meet the needs of the company’s project portfolio,” says CTO Carsten Sander Jacobsen.
Recruitment for the remaining positions within the company is ongoing.