OTC: Aging UK wells have structural integrity problems

Sam Fletcher
Senior Writer

HOUSTON, May 4 -- Some 83% of the operators of more than 6,000 offshore wells on the UK continental shelf (UKCS) are experiencing structural integrity problems with aging wells, said officials of UWG Ltd., a unit of Acteon Group Ltd., Norwich, UK, at a press conference at the Offshore Technology Conference. The UWG officials said 87% of the operators expect problems to increase due to sales of offshore properties, extension of well design lives, and general lack of attention to system design and maintenance in the past.

A recent study of that problem by Douglas-Westwood Ltd., under commission from UWG, found that 10% of UK wells have been shut in at some point during the last 5 years. Although the North Sea is a harsh environment, the structural integrity problems encountered there "have wider implications for the global oil and gas industry," UWG reported.

"It has confirmed our belief that, as an industry, more emphasis needs to be given to insuring the structural integrity of wells during construction and to overcoming any problems that present themselves later in a well's life cycle," said Ken Burton, UWG's managing director and vice-president of Acteon's conductor systems division. Another part of the Acteon group is WellCut Decommissioning Services, a well-abandonment contractor.

According to the report, "Concerns surrounding the structural integrity of the facilities above the waterline—in many cases now operating beyond their design lives—are generally being addressed. But what about the subsea infrastructure, in particular the conductors and the wells?"

Findings by the Douglas-Westwood study are based on interviews with representatives from 18 operators of 6,137 wells out of the 9,196 wells in the UK North Sea. Additional data from the UK Department of Trade and Industry showed that 960 wells were suspended at the time of the report and that 32% of the wells in those waters are more than 20 years old, some more than 38 years old.

Although many oil and gas fields off the UK are in decline, strong prospects remain for sustained activity in the area, the report said. Supported by government initiatives to sustain production and maximize economic recovery, the industry is focused on reevaluating and extending the operational lives of existing wells and facilities.

"However, as the region's operational infrastructure moves beyond its intended productive life, concerns are growing over safety, productivity, and environmental standards," the report said. "Issues of structural integrity have therefore become increasingly pertinent concerns for industry as exploration and production activity is likely to be sustained into the next decade and beyond. As UKCS decommissioning activity continues to be delayed, and the movement toward extending the life of mature assets and developing previously untapped reserves continues to gather momentum, an increasing reliance on existing, aging infrastructure is developing."

The report said, "However, there seems to be no real knowledge of the implications of operating wells beyond their design lives, and particular concern surrounds safety, environmental and economic standards associated with the structural integrity of these offshore wells."

Wells suspended
Current safety and environmental regulations have led to a growing number of UKCS wells being suspended, shut in for maintenance, or prematurely plugged and abandoned in recent times.

"The most frequently reported structural integrity problems have been found to be centralization and corrosion within the well conductor system, tubing leaks, and valve failures. Other common issues include annulus pressure, connector failure, scale, conductor wear, wellhead growth, and christmas tree leaks," the report said. "However, it must be remembered that these are the areas that operators are able to or chose to test, and there are other factors (such as the internals of a conductor) which they cannot or do not test. In any case, such problems will rarely cause a well to be shut in long term, especially given current oil and gas prices, unless there is nothing left to produce."

Age is the primary cause of structural integrity problems with UKCS wells. "The combination of erosion, corrosion, and general fatigue failures associated with prolonged field life, particularly within wells exceeding their design lives, together with the poor design, installation, and integrity-assurance standards associated with the aging well stock, is believed to have led to an increased frequency of problems. These problems can be further exacerbated by increasing levels of water cut, heat treating, and gas lift later in field life," the report said.

However, it said, "Although age is undoubtedly a significant issue, if it is managed correctly it should not be a cause of structural integrity problems which may restrict, or indeed cease, production."

Sales of aging assets to new owners mean the potential loss of asset-specific knowledge and cost-cutting in the mature phase of production. "It remains to be seen how successful the new operators will be in producing the associated wells and facilities beyond their intended design lives," said the report.

"While the current expansion of workover and intervention activity—largely being carried out by independent operators on recently acquired aging assets—may serve to restrict any major increase in the impact of structural integrity problems, the question becomes the coverage achieved by these programs and the standards which operators are currently working to meet," the report said. Furthermore, it said, the "proliferation of subsea technology has created particular concerns over operational efficiency, as the high cost of subsea well intervention has restricted remedial activity should problems arise, with the value of production gained often deemed insufficient to justify the costs of intervention."

Historically, maintenance, intervention, and workover operations on UKCS wells have been severely restricted by the substantial costs involved. Operator feedback suggests that while current technologies deployed within the inspection and remediation of structural integrity problems are comprehensive, high costs generally restrict their use.

"For while decisions on potential intervention are multidisciplinary, once all risks to safety and the environment have been addressed, decisions on whether to intervene are predominantly financial," the report said. "Operators therefore place an emphasis on the prevention of problems rather than curing them, which in turn precipitates a requirement for a greater focus to be placed upon a well's design, installation, and integrity assurance."

Effects on independents
The anticipated increase in structural integrity problems will potentially affect independent operators buying offshore properties from the majors. "There would seem to be a growing need for services in preventing such issues arising and identifying and counteracting them should they occur," the report said.

"If intervention is required, replacement rather than remediation is generally preferred, in keeping with problems created by aging assets and reduced budgets. A general requirement for easier-to-run and more cost-effective solutions which avoid the need to incur production downtime has been identified," it said. "One technique which is expected to have a key role in providing such solutions and challenging the prevailing attitude that intervention operations are a last resort is rigless intervention."

Of the operators interviewed, 79% believe rigless intervention techniques will increase if the required cost reductions can be realized.

Contact Sam Fletcher at samf@ogjonline.com

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