Decommissioning in Aker Solutions Experience and challenges

Presentation on theme: "Decommissioning in Aker Solutions Experience and challenges"— Presentation transcript:

1 Decommissioning in Aker Solutions Experience and challenges
INSTOK & SDI Technology Partnership Event, Aberdeen Torleif Gram, Senior Vice President, Aker Solutions MMO

2 Content Industry context Our history Our business 25 April, 2019

3 Overall market in North Sea
42 platforms removed since 1996 Assuming 90% of the installations to be removed coming 30 years 25 April, 2019

4 Split between UK / Norway
25 April, 2019

5 Cessation cost distribution - UK
Resource breakdown structure average UKCS expenditure ( ) Kilde: Oil & Gas UK 25 April, 2019

6 Typical timeline for a cessation project
-5 -4 -3 -2 -1 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Management anticipation CoP (5-10 years in advance) Basic engineering Basic Engineering (removal) Establish strategies and goals Retrieve & organise platform data Carry out inspections Studies/Method Statements Risk Assessments Input to decisions and plans Cessation plan / decommissioning programme to Authorities Sourcing Cessation of production P&A (incl. conductors) Facility / pipeline making safe and topsides preparation Removal Recycling CoP 25 April 2019

7 Traditional Model - Tier 1 Contractors in UK
O&M contract Disposal Decommissioning service contract De-energise platform Clean and remove oils and fuels Install temporary systems Prepare platform for NUI mode Technical Authority Removal contract E&C contract P&A contract Subsea contract Time 25 April, 2019

8 DSC part of O&M O&M contract Disposal Removal contract E&C contract
Decommissioning service contract De-energise platform Clean and remove oils and fuels Install temporary systems Prepare platform for NUI mode Technical Authority Removal contract E&C contract P&A contract Subsea contract Time 25 April, 2019

9 DSC part of E&C contract
O&M contract Disposal Decommissioning service contract De-energise platform Clean and remove oils and fuels Install temporary systems Prepare platform for NUI mode Technical Authority Removal contract E&C contract P&A contract Subsea contract Time 25 April, 2019

10 Content Industry context Our history Our business 25 April, 2019

11 Decommissioning – Our reference list
Esso Odin EPRD Phillips Maureen A EPRD TOTAL Frigg & MCP01 EPRD BP Old Valhall DSC TENAS Yme DSC CNRI Murchison DSC ExxonMobil Jotun B DSC Continuous business for 20 years Partnership with Saipem for 15 years to 2011 25 April, 2019

12 Maureen A Substructure prior to installation 25 April, 2019

13 The BTA method is proven through Frigg DP2 jacket removal
tonnes Decommissioning in Aker – Our perspective

14 Positive experiences Continuous HSE focus works – last eight years without LTI (three million man-hours) Well-defined platforms were a success All major marine and heavy lift campaigns on all projects successfully performed offshore and onshore Maureen A: High focus (technical and commercial) on re-floating the platform from seabed – worked as planned Innovative solutions - BTA and FlexSeaFast® solved challenges We are prepared for the known risks – How to be sufficiently prepared for the unknown risks? 25 April, 2019

15 Unknown risks in our decommissioning projects
Odin ( ) Cutting of piles Maureen (1998 – 2002) Lack of HSE culture by tug supplier (2 fatalities) Cleaning of wax in tanks prior to reuse MCP01 & CDP1 (2004 – 2009) Platform deterioration caused by low maintenance for more than ten years More hazardous materials than declared Was not hydrocarbon free (planned with cold work) QP Asbestos in ceiling preventing use to use as planned General Frigg Consequence costs for more complex preparation work offshore (flotel, revised lifting schedule and more man-hours) Busy market (high oil price) Preparation for removal (lifting) is the challenge 25 April, 2019

16 Contract models EPRD E+P+R+D Suitable for Suitable for
Small/medium sized module based topsides Cost Removal > Cost Eng/Prep Reverse installation or single lift Typical HL Contractor E+P+R+D Suitable for Large complex integrated topsides Cost Removal < Cost Preparations Various removal methods 25 April, 2019

17 Content Industry context Our history Our business 25 April, 2019

18 Decommissioning of North Sea
Our decom mission is to create value to our Clients by solving their decom obligations in the North Sea. 25 April, 2019

19 Service offering today – balanced risk
Products Description 1) Cessation obligations assessment High level study to reveal regulations and estimate decom costs Typical utilisations: Corporate balance sheets, valuation of assets at sales or acquisitions 2) Decom engineering services Consulting services Engineering studies, all levels as appreciation, concept, FEED and detail 3) Decom service contracts (DSC) Engineering down inclusive cleaning, hydrocarbon free and energy free Material management Modifications and preparations for removal 4) New: project execution assistance Services to Company or removal contractor Project execution systems Project execution management and engineering services 5) New: removal service contracts Services to a removal contractor Preparations for removal 25 April, 2019

20 DSC as part of decommissioning process
Production CoP Eng down Prepare for removal NUI Removal DRILLING Drilling Well operations P&A Cleaning Conductors FACILITY OPERATIONS Logistics Safety Catering Logistics Safety (cases) Catering PRODUCTION Maintain & upgrade systems Maximise throughput Engineering down Modifications Shutdown REMOVAL Temporary systems Preparations Removal Decommissioning service contract 25 April 2019

21 Copyright and disclaimer
Copyright Copyright of all published material including photographs, drawings and images in this document remains vested in Aker Solutions and third party contributors as appropriate. Accordingly, neither the whole nor any part of this document shall be reproduced in any form nor used in any manner without express prior permission and applicable acknowledgements. No trademark, copyright or other notice shall be altered or removed from any reproduction. Disclaimer This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Aker Solutions ASA and Aker Solutions ASA’s (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as “expects”, “believes”, “estimates” or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for Aker Solutions’ businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although Aker Solutions ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. Aker Solutions ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither Aker Solutions ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use. Aker Solutions consists of many legally independent entities, constituting their own separate identities. Aker Solutions is used as the common brand or trade mark for most of these entities. In this presentation we may sometimes use “Aker Solutions”, “we” or “us” when we refer to Aker Solutions companies in general or where no useful purpose is served by identifying any particular Aker Solutions company. 25 April, 2019