Industry tackles offshore decommissioning

Guntis Moritis
Production Editor

ABOUT THIS REPORT ...

This report describes some unresolved issues as well as the lessons learned by the industry in decommissioning offshore oil and gas facilities. As abandonment of depleted fields proceeds in various countries, much fiscal legislation regarding abandonment remains to be written and tested in practice. Also, the industry, as well as governments, continues to seek better and less-costly ways to resolve the often sensitive issues surrounding the abandonment process.

A number of issues still remain unresolved concerning the oil and gas industry's plans for decommissioning offshore production equipment, especially in deeper waters. Some options prefered by the industry are:

Deepwater disposal
Creation of artificial reefs
Partial removal to more than 85 ft of water depth and leaving the remaining structure in place.

The complicating factor for these scenarios is that regulation agencies may not approve them. And even if approved, such as in the 1995 case of Shell U.K. Exploration & Production Co.'s plan for the Brent spar, plans may have to be changed.

Fig. 1 [58,826 bytes] shows the locations of the world's offshore oil and gas platforms. The numbers are approximate.

Terminology change

To give platform abandonment a better association, speakers at several industry/government forums have suggested that such terms as "abandonment" and "disposal" should no longer be used.

To some, "abandonment" suggests discarding junk in unauthorized places, and "disposal" means the same as dumping.

Prefered use now seems to be the term "decommissioning" instead of "abandonment."

Allan Pulsipher, of the Louisiana State University Center for Energy Studies, chaired the International Workshop on Offshore Lease Abandonment and Platform Disposal: Technology, Regulation, and Environmental Effects (New Orleans, Apr. 16-17, 1996). He suggests in the introduction to the workshop proceedings that in retrospect the workshop's name should have been different.

A more appropriate name, he says, would have been Offshore Platform and Pipeline Removal and Recycling, Sea Bottom Cleanup, and Marine Habitat Preservation.

Gulf of Mexico

Removing offshore facilities from the U.S. Outer Continental Shelf (OCS) of the Gulf of Mexico has been ongoing since 1973. To June 30, 1997, the U.S. Minerals Management Service (MMS) lists 1,503 structures as having been removed out of the 5,375 structures installed in the OCS area. Net remaining are 3,872 structures (Fig. 2 [38,239 bytes]).

MMS statistics do not include shallow, state-controlled waters. About 900-1,000 structures are in place.

Not including future new platforms, one estimate is that decommissioning existing structures in the OCS might cost the industry between $1.4 and $3.3 billion, depending on the approaches used and permitted (OGJ, May 6, 1996, p. 65).

Since 1988, yearly rate of decommissioning in the OCS area has been slightly more than 100 oil and gas platforms/year. In 1993, the number of platforms decommissioned jumped to 181, but in the last 3 years the rate again has been about 100/year. Through mid-1997, 35 structures were removed (Fig. 3 [30,755 bytes]).

Besides conventional piled platforms, OCS producing structures include simple shallow-water caissons, tension-legged platform (TLP), and a spar tower.

Gulf of Mexico deepwater production records to date include:

Shell Offshore Inc.'s Bullwinkle conventional fixed platform in 1,350 ft of water.
Shell's Ram Powell TLP in 3,210 ft of water. Shell's Ursa TLP, currently under construction, is scheduled to be moored in 3,950 ft of water.
Shell's subsea Mensa gas development in 5,300 ft of water.

Protecting the habitat

Because OCS regulations require the severing of most offshore structures at 15 ft below the mudline, explosives are a standard tool in platform decommissioning.

One problem with explosives is that they kill fish. But from a human aspect, explosives are safer than mechanical methods especially when severing is required below the mudline.

A recent estimate is that about two-thirds of all platforms abandoned are removed with explosives (OGJ, May 6, 1996, p. 59). For platforms in more than 150 ft of water, this number jumps to 90-95%.

To determine the extent of fish killed, the National Oceanic and Atmospheric Administration's (NOAA) National Marine Fisheries Service in Galveston is conducting a study on the impact of explosives on Gulf of Mexico fishery resources.

Field sampling began in 1993, and the Fisheries Service expects to complete the study in 1998.

Study objectives include:

Estimating fish kill resulting from underwater explosives at selected platform removals
Extrapolating these data to provide an annual estimate of fish kill at all explosive removals in the Gulf of Mexico
Comparing this explosive-related mortality with other sources of mortality such as natural mortality, directed fishing mortality, and indirect mortality such as bycatch from trawlers.

The Fisheries Service says that through early November 1997, it has obtained data for six platform removals from offshore Cameron to Grand Isle. Water depths ranged from 45 to 92 ft.

Its results are preliminary and may be revised as new data are collected. It has found, from the preliminary results, that four species of fish account for about 88% of the estimated mortality caused by explosives. These include Atlantic spadefish, bluerunner, red snapper, and sheepshead.

It estimates total fish mortality at the first six platforms ranged from 1,700 to 4,700. And estimated mortality for red snapper, the most valuable commercial and recreational species found at offshore platforms, ranged from 0-1,200/structure. Many of these are larger-sized fish.

Fisheries Service statistics, adding some perspective, estimate about 30-40 million red snapper/year, 0-1 year old, are killed as trawler bycatch. But many of these would die naturally, even without trawlers.

For 2-year and older red snapper, fishermen catch about 3 million fish each year from the Gulf of Mexico.

Swars program

Besides platforms, the oil and gas industry also has to remove subsea well-completion equipment.

In California state waters from Point Conception to the border of Ventura county, a program is ongoing to abandon 23 subsea oil and completions (Fig. 4 [102,502 bytes]).

Five companies, Unocal Corp., Texaco Inc., Arco, Chevron Corp., AERA Energy LLC, and Phillips Petroleum Co., are participating in the joint effort called subsea well abandonment rig sharing program (Swars). Estimated cost for the program is $75 million.

Swars indicates its current expenditures with the Adriatic IV jack up are about $100,000/day.

The coordinated program was initiated in 1991 at the request of the California State Lands Commission. One main reason for the effort was that one rig for abandoning all the wells would have less environment impact than several rigs working at the same time.

Also, the program will save the companies money because only one rig has to be mobilized to the area. Likewise, having to follow only one rig's activities saves the federal, state, and local agencies oversight expenses.

Drilling of these subsea wells started in the 1960s. Some wells produced until the late 1980s. Also, some of the Unocal wells were never tied into production facilities.

Unocal planned to install an offshore platform but due to changing economics for operating offshore California, Unocal did not install it and did not put these wells on production.

Most of the wells that did produce flowed mainly gas. Swars estimates that the cumulative production from these wells was 4 million bbl of oil and 140 bcf of gas.

Swars is plugging the wells in accordance to the California Division of Oil, Gas, and Geothermal Resources standards and lease agreements with the California State Lands Commission. This involves clearing the site around the wells, placing cement and steel plugs in the wells, and cutting off the well heads to about 5 ft below the mudline.

Prior to the rig moving in, in late July, the site around each well head was cleared and flow lines were disconnected. The flow lines were flushed, capped, and the ends jetted into the seafloor.

Along the shore line, the flow lines will be removed within the surf zone that is defined as less than 15 ft of water. Phillips removed its flow lines prior to the rig moving in. But to meet air-quality requirements, other operators will pick up flow lines from the surf zone once the rig leaves the area.

At the beginning of November, Swars indicated that the rig was 2 weeks ahead in the 9-month work schedule. Swars credits the calm offshore weather as helping to stay ahead of schedule. The weather has also been unusually calm because El Ni?o has been creating a high-pressure area over California.

Because of detailed planning over several years, Swars says that so far it has encountered very few surprises that could have slowed the work.

The fourth Unocal well near Point Conception was being finished at the beginning of November. The rig had previously plugged the five Phillips wells. From Point Conception, the rig will move east along the coast to plug the remaining wells.

Swars indicates that when finished, all of the subsea producing and exploration wells in state waters between Point Conception and the Ventura county line will have been plugged.

But remaining will be some geological test and exploration wells in the Outer Continental Shelf that it believes will have to be reabandoned according to present standards.

Artificial reefs

Once a fixed structure is severed, it can be taken ashore for scrapping or refurbishment. But with appropriate permits and economics, the structure also can be toppled in place or taken to another location to form an artificial reef.

Unlike the controversial ocean disposal of Shell's Brent spar in the North Sea, Gulf of Mexico structures have not been used for oil storage and, therefore, can be regarded as clean. Most environmentalists, government agencies, and fisherman support artificial reefs.

Although supported widely, the program has involved only a small percentage of Gulf of Mexico decommissioned platforms. But many in the industry expect that this will change as larger structures are removed.

To date, most of the structures removed in the Gulf of Mexico have been smaller and not as appropriate for reefs.

The most active programs are offshore Texas and Louisiana.

In these states, the departments handling the artificial reef program are the Louisiana Department of Wildlife and Fisheries and the Texas Parks and Wildlife Department. These departments want to preserve the beneficial environment created by offshore platforms for both recreational and commercial fishermen. Total removal of all platforms would detrimentally affect the Gulf Coast fishing industry.

Since the first platform offshore Texas was converted to an artificial reef in 1990, 39 structures through November 1997 have been converted to reefs. Texas has also received a maintenance contribution of $4.2 million from the industry.

As platforms from deeper water are decommissioned, one attractive alternative for saving costs is partial removal. The industry hopes that the MMS will continue to support this type of decommissioning.

A 1996 National Research Council Marine Board report indicated that as platforms are abandoned in deeper water, the flexibility of only partially removing the structure can significantly reduce abandonment costs.

The report does point out that shrimpers are the primary opponents of partial removals in water shallower than 300 ft. Shrimpers fear a decrease in trawlable waters.

Offshore Texas, three platforms have been partially removed. Union Pacific Resources Co.'s North Padre Island A-58 four-pile jacket, in 252 ft of water was the first. The top was cut at -86 ft and placed vertically next to the remaining structure.

In the case of Oxy USA Inc.'s High Island A-355 eight-pile jacket, in 305 ft of water, the structure was severed at -91 ft and the top hauled ashore for refurbishment and reuse.

The most recently topped platform was Kerr-McGee Corp.'s High Island A-532, in 191 ft of water. The top was cut off at -85 ft and set vertically next to the platform.

Cutting off the top of the structures eliminated the need for explosives. In each of these cases in Texas, the companies used mechanical cutting to sever the tops from the remaining structure.

In shallower 125-ft water, one recent platform converted to a reef was Samedan Oil Corp.'s North Padre Island 967. It was split in half to provide adequate clearance.

Louisiana has nine main sites for reef disposal. From the program's beginning in 1986 until November 1997, Louisiana has allowed 64 structures to be disposed of in its rigs-to-reef program.

About $8 million have been contributed to the maintenance program, in which the operator donates to the state 50% of the costs saved by converting the platform structure to a reef.

The states uses the money for long-term reef maintenance such as expenses for marker buoys and monitoring. The state assumes all liabilities for the reef.

Louisiana is also allowing partial platform removals.

The Amoco platform in 300 ft of water in block Eugene Island 367 had its top cut of at -85 ft.

Also, the Freeport-McMoran offshore sulfur mine facility, with its 11/2-miles of bridges, now forms the largest artificial reef. The structures, in 60-ft water, had the tops cut at -30 ft.

Offshore California

Some of the largest platforms scheduled for removal are Chevron's OCS facilities offshore California (Fig. 5 [124,959 bytes]). The five platforms, Gail, Harvest, Hermosa, Hidalgo, and Grace, are in water depths ranging from 318 to 740 ft.

Grace was installed in 1980 and Gail in 1988. Hidalgo, Harvest, and Hermosa followed in 1991. The wells on Grace were shut-in last February, and Chevron plans to plug and abandon them in the first quarter of 1998.

Grace now serves only as a production facility for the wells producing on Gail.

The engineering and planning for the decommissioning is continuing, although Chevron says the actual removal will start in 2001 instead of the previously planned 2000. Recent work on the platforms has added 1 year to their lives.

Besides the platforms, two onshore processing facilities, at Gaviota and Carpinteria, will also be decommissioned.

Chevron presented four possible decommissioning alternatives to the County of Santa Barbara Planning and Development Department.

Its preferred alternative was that after removing the topsides, the top 85-100 ft of jacket would be cut off. The rest would be left in place and serve as a reef habitat.

The severed section would be placed in a vertical position next to the remaining jacket, transported to another location for placement as a seabed reef habitat, or taken ashore for scrap, recycling, or landfill.

In its second alternative, the topsides would be taken ashore for scrap, recycling, or landfill, and the jacket in one piece would be hauled to another permitted seabed site.

In the third alternative, multiple parts of the platforms would be transported to different seabed sites.

Its last alternative was to haul all sections ashore for scrap, recycling, or landfill.

Artificial reefs are not new to offshore California. Over the last 30 years, more than 30 have been placed. Most are made on concrete rubble and quarry rock, but some, like a four-story missile gantry, are very similar to the steel used in platforms, according to Chevron.