Cost functions estimate offshore liabilities

DECOMMISSION OBLIGATIONS— ConclusionCost functions provide an estimate of offshore decommissioning liability from which one can establish a fair market value for platform decommissioning in the Gulf of Mexico.This concluding article in a two-part series discusses cost functions for the three primary stages of decommissioning: plugging and abandoning the wells, structure removal, and site clearance and verification.Although it is not possible to identify all of the characteristics that affect decommissioning, a finite set of descriptors usually is sufficient to quantify each stage of the process.Part 1 of this series (OGJ, Mar. 14, 2005, p. 43) described the factors affecting the tim...

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