A New Approach to Decommissioning Cost Estimation Using Settled Liability Data
Cost data in the oil and gas industry are proprietary and obtaining them is challenging; in addition, unless collected across a large and diverse sample, summary statistics are unlikely to be representative of the activity or process it is trying to inform. The purpose of this article is to apply settled liability data to infer private information on the cost of decommissioning in the Gulf of Mexico. The procedure avoids most of the traditional problems associated with cost studies but requires careful normalization and a clear understanding of the limitations of analysis. Using settled liability data from 17 public companies with operations primarily in the Gulf of Mexico, decommissioning cost is evaluated on a regional basis and by operator from 2008 to 2012. The average cost to decommission a structure between 2008 and 2012 is estimated to be $6.4 million in water depth less than 200 ft and $15.6 million in water depth greater than 200 ft. Average cost statistics are suggested as a market index for Gulf of Mexico decommissioning activity.
A review of multi-attributes decision-making models for offshore oil and gas facilities decommissioning
Abstract With the development of the offshore fossil energy industry, the designing life of many offshore oil and gas facilities will end. The decommissioning of these facilities has become an urgent task due to unpredictable costs, high risks, and environmental protection issues of public concern. Decision-making, as the core in the pre-decommissioning stage, plays a decisive role in the cost, risk, and impact of the entire decommissioning. Therefore, the multi-attribute decision-making model has attracted much attention from industry and academia. An efficient, accurate, and simply using multi-attribute decision-making model can enable governments, energy companies, other marine users, and environmental protection organizations to reasonably fulfill their concerns. It is of great significance to all parties. This review mainly studies the multi-attribute decision-making models that have been used in the decommissioning of offshore oil and gas facilities, and conducts a more detailed interpretation of them, including the relevant regulations, frameworks, methodology, preferences and advantages and disadvantages of different models. In addition, a more comprehensive review of the cost assessment model, an important part of the decision-making model, is carried out, including the general framework and methodology of the cost assessment model, and the accuracy of the models is explored. And then the current evaluation method of accuracy of the cost assessment model raises the author's personal doubts. At the end of the article, this paper names two core problems of the current decision-making model, that is, the lack of basic data and the incomplete MCDA (Multi-criteria Decision Analysis) method. This review can provide a comprehensive reference and feasible research directions for future scholars who aims to study the decommissioning of offshore oil and gas facilities especially in the North Sea in the UK and point out the direction for the industry to improve its current multi-attribute decision-making models.
Analysis: The Agenda 2007 Proposals: Evolution or Revolution?
On 10 February 2004 the Commission published its proposal for the financial perspective 2007-2013. A week later it adopted the third report on economic and social cohesion. These two documents form the basis of the so-called ‘Agenda 2007 reforms’. They will be the greatest challenge for the enlarged EU after the intergovernmental conference, since they will determine the financial basis for EU policy-making until the middle of the next decade. The Agenda 2007 proposals certainly hint at courageous reforms, because they place a previously unheard-of emphasis on performance and quality. Under the proposals, structural operations should generate value for money, and the funds should focus on projects which generate added value at a European level. Overall the Commission’s proposals point in the right direction, because they balance, on the one hand, solidarity for the new Member States and weak regions in the old Member States with, on the other hand, investments in future tasks. Moreover, they constitute a paradigm shift. For the first time, the Common Agricultural Policy will not be the dominant expenditure category. Now it is up to the Member States to examine the proposals politically and find a compromise between sometimes very divergent interests. It is to be hoped that, during the debate over expenditure limits and division of funds, national interests do not outweigh European interests.