CoP & Decommissioning
What is Decommissioning?
Decommissioning represents the conclusive phase in an asset’s lifecycle. This involves isolating reservoirs, dismantling associated infrastructure, and establishing an environmentally secure production area with minimal safety risks. This intricate and potentially costly process necessitates the cooperation of key stakeholders to effectively manage various technical, operational, social, economic, and environmental factors.
Decommissioning is set to be a key issue that the oil and gas industry must tackle, as more than 70% of the world’s oil and gas is produced from mature wells and flows through ageing infrastructure. As oil and gas basins reach their economic limits, and operating them is no longer economically viable, operators will have to look into ceasing operations and decommissioning their facilities.
While more than 95 nations have operational oil and gas facilities, there is very limited experience in the decommissioning of oil and gas fields. There are various challenges associated with decommissioning and limited experience in dealing with these challenges.
Estimating decommissioning costs, which can amount to billions of dollars, involves making assumptions about the Cessation of Production (CoP) and other factors such as the timing of operations, methods employed, and accounting for cost inflation. Decommissioning liabilities are intricate and uncertain, influenced by factors like contracts, legal obligations, regulations, and societal expectations.
There are also various safety and environmental risks, and securing ample funding is crucial for effectively executing decommissioning tasks through to completion, despite operators expecting minimal revenue generated from the process, if at all.
Our global experience has shown various contract/ownership legacy issues and poorly defined processes, and improper behaviour can lead to unforeseen cashflow challenges during decommissioning. The increasing emphasis on environmental protection may also raise costs, invalidating initial low-cost assumptions.
What Makes AIE Unique?
AIE oversees a substantial asset inventory, equivalent to almost 10% of the daily oil production in the Middle East through our Veracity suite of software. Our specialised software and engineering services are dedicated to ageing infrastructure, and we have effectively completed decommissioning projects across various scales, from advisory assistance to comprehensive project management for onshore and offshore facilities. We possess a unique understanding of the regional and international decommissioning landscape and have developed a world-class team to support a wide range of initiatives. Our recent acquisition of significant strategic decommissioning contracts serves as a testament to our expertise and unwavering commitment to helping operators tackle this key challenge.
Ensuring A Seamless Decommissioning Process: What Services Does AIE Offer?