The key to limiting decommissioning costs and saving millions
In light of the fall in oil prices and Covid-19, offshore owners are weighing the economic viability of their assets ever more closely. For many operators, this means planning and starting the decommissioning process earlier than previously expected.
Weighing costs in uncertain times
Asset owners are being confronted with several difficult choices over cost and asset management. Is it worth keeping an asset producing, given the current oil price? Will it be more beneficial in the long-term to continue production or to decommission assets? Where will funds for decommissioning – usually covered in part by revenue from existing assets – come from during a period of economic flux?
For owners looking to develop decommissioning plans, or those whose decommissioning plans will begin in the next 1-5 years, the specter of cost is inescapable. Even for assets with 10+ years of remaining operational lifecycle, volatile oil demand and society’s push for renewable energies are forcing questions of early decommissioning and energy transition.
Turning to technology for decommissioning
The Covid-19 crisis has shown owners the value of technology in preserving business continuity. The offshore industry has been trending towards increased digitalization for some time, with the ultimate goal of conducting remote operations for minimally manned installations.
This will allow owners to improve operational, environmental and cost efficiency. One of the key innovations helping owners reach that point is digital twin technology, which offers enormous cost reduction opportunities for decommissioning.
Bureau Veritas’ Veristar AIM3D digital twin and asset management technology, developed in partnership with Dassault Systèmes, provides clients with an interactive, up-to-date operational view of assets and their condition. With Veristar AIM3D, users can develop digital decommissioning scenarios and calculate cost savings using asset-specific data. Recent data shared with the UK's Oil and Gas Authority has shown the distinct decommissioning cost savings clients can achieve through Veristar AIM3D.
Operators could save between 9% and 15% on total decommissioning project costs. This equals more than £2 million on project costs for assets with topsides of 10,000 tons, increasing to more than £8.5 million for assets with topsides over 30,000 tons.
Owners can achieve savings from 9% to over 30% via a range of decommissioning activities, including topside, jacket and subsea infrastructure removal, facilities de-energizing, onshore recycling and site remediation.
Justified costs for the future
Owners and operators that treat 3D models of their assets as simple visual aids miss out on the real power and potential of digital twin technology. Veristar AIM3D offers a true to life, four-dimensional picture of an asset’s condition instantly, for any platform on any device worldwide, at any time.
This allows asset managers to scenario plan various decommissioning options and decide on the optimum approach, improving work scope definition, proposal quality and execution efficiency while lowering costs. Managers can thereby accurately determine cost savings, and justify their spending, accounting for every cent of their decommissioning decisions.