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.
From declared asset retirement obligations to a decommissioning cost estimate for onshore crude oil fields in Nigeria.
As in most mature crude oil producing regions, asset divestment has commenced in Nigeria. Decommissioning and associated environmental liabilities are expected to become important problems requiring attention. Public and government engagement on decommissioning will be ineffective without information on cost of decommissioning liabilities, which are held confidential by oil companies. This study demonstrates a method to determine generic aggregate cost of decommissioning liabilities for Nigeria onshore fields, using non-proprietary data from annual financial reports of operating companies in Nigeria. The results can be used as basis for negotiation with operators and to help government in preparation for decommissioning risk.
Two Recent Conversions Of Semisubmersible Drilling Units To Floating Production Facilities
Two recent conversions of semisubmersible drilling units to floating production facilities were governed by a different set of design requirements and operator philosophies. This paper compares them and illustrates how fabrication philosophies were chosen to produce a cost-effective project for each.