Will Speck is the President of TSB Offshore, the recognized oil and gas energy industry leader in providing worldwide abandonment consulting and project management services. Will has over 21 years of oilfield experience in field operations and operations management, and more than 19 years of project management experience. His experience spans several geographies - the Gulf of Mexico, China, Malaysia, Vietnam, Central Asia, the Middle East and United Kingdom. Prior to TSB, Will worked with Schlumberger (US and International) and GE Oil & Gas (US and international).
What are the services that TSB provides in general, and more specifically, can be of interest to Indian companies?
TSB provides a wide gamut of decommissioning services, most of which are likely to be of keen interest to Indian oil and gas exploration, and production companies. They consist of consulting services, ARO estimates (PAES), regulatory assistance to governments, oil and gas operators, bonding assistance, integrated project management services, benchmarking services, and asset life cycle management consulting.
One of the most unique tools that TSB has developed for use in the industry, is a comprehensive computer-based Platform Abandonment Estimating System ( PAES™), which takes advantage of the company's substantial hands- on experience in the decommissioning market. This software was developed by TSB and accesses a resource data base of actual worldwide decommissioning project costs and algorithms to develop decommissioning cost estimates.
The PAES™ system contains thousands of decommissioning cost estimates and historical data for the Gulf of Mexico, North Sea, Middle East, and Asia Pacific / India / Australia regions, spanning over 20 years. This includes a complete set of offshore daily spread costs (updated for each region of the world on a yearly basis) for all aspects of decommissioning operations, including site preparation, well plug and abandonment, pipeline abandonment, platform removal and final site survey. These costs are applied to the standard decommissioning methodologies / estimated durations for each work segment to arrive at robust decommissioning estimates.
This program, along with the decommissioning methodologies and costs (updated continuously by TSB) are unique in the decommissioning industry.
For our non-oil and gas and non- technical readers, can you explain to us what is generally meant by 'Decommissioning of Offshore and Onshore Structures' and why it has such serious implications in the oil and gas scenario?
Decommissioning is the process of plugging and abandoning oil and gas wells and removing or repurposing infrastructure at the end of its useful life. This includes offshore facilities/ structures, pipelines, onshore storage and production sites and other related support facilities. Where allowed by government regulation, this also includes abandoning ‘clean’ pipelines in place and the reefing of non-carbon affected substructures/jackets in designated reef areas for the purpose of producing new marine habitats. Decommissioning is normally mandated by oil and gas company policies and a range of national regulations, which sometimes vary substantially from country to country. In all cases, however, decommissioning should be carried out in a safe and environmentally and socially responsible manner.
In general, what are the major processes used in decommissioning of offshore oil and gas facilities worldwide and how do they relate to upcoming work in India.
The general processes followed for decommissioning of offshore facilities, which is a major part of TSB’s consulting work in India, are outlined below. These processes generally follow the same framework as those used worldwide, especially in the US Gulf of Mexico and other parts of the Asia Pacific Region.
Phase 1 | Project Planning, Site Survey, Facility Prep and Related Up- Front Activities | |||||
Phase 2 | Well Plug and Abandonment | |||||
Phase 3 | Pipeline Abandonment | |||||
Phase 4 | Platform / Facility Remova | |||||
Phase 5 | Debris Removal and Final Site Acceptance | |||||
Phase 6 | Project Closeout |
The same processes are currently serving as a basis for the methodologies used by TSB for offshore decommissioning in India.
What are the ESG (Environmental, Social & Governance) issues, based on your worldwide experience, that will need to be invariably addressed on decommissioning projects?
The major challenge in decommissioning of oil and gas facilities with respect to ESG issues lies with offshore facilities. There is little disagreement about what should be done with onshore facilities and how it should be done to comply with industry best practices. The challenge with onshore is simply a matter of enforcement, i.e., getting the responsible parties to spend the money that is needed to do the job properly.
The situation with offshore decommissioning is much more complicated. A major portion of international regulations for offshore decommissioning have been developed in the United States (US), starting in the 1960’s, and then in the North Sea in the early 1970’s. Unfortunately, during this period there were some prominent pollution incidences (the Santa Barbara oil spill in 1969 and the Ixtoc, Mexico oil spill in 1979) which soured the general public against the oil and gas industry and had a major impact on how the international decommissioning regulations have been written. These basically required that everything be removed to shore and disposed of at specialty facilities as the base case. However, we now recognise that the best ESG decommissioning response is far more complicated than just removing everything to shore for disposal. When personnel safety and air quality are considered, it often is better to leave some of the hardware in place in the ocean, in many parts of the world, with robust reefing processes in place. The bottom line is that every offshore decommissioning situation must be evaluated on its own to determine the best ESG solution. There is no single solution that fits all circumstances.
What have been TSB’s more recent involvements in the Indian decommissioning market and their overall contribution to the industry.
TSB has most recently completed work for the Oil & Natural Gas Corporation (ONGC) and Cairn Energy, and with Shell / BG in the past. This work has centered around developing Asset Retirement Obligation (ARO) budget estimates for their onshore and offshore facilities. The work also included follow- up studies covering yearly cost basis updates, changes in current regulations and facilities added or deleted to their portfolios. Decommissioning methodologies were completed for each client based upon current Indian regulations and resources available for decommissioning in the region.
TSB was also involved in the very early development of the Indian Decommissioning Market. Through a request by the Indian Directorate General for Hydrocarbons, TSB completed a comprehensive study to develop the first draft rules for onshore and offshore oil and gas facility decommissioning in India. This work was completed in 2016.
The scope of this study included:
- Provide a summary of all major international decommissioning regulations.
- Identify the time requirements for facility decommissioning and how this is impacted by the regulations.
- Identify financial issues such as liability bonding or escrow accounts and how these are handled in other countries.
- Develop draft regulatory guidelines for oil and gas facility decommissioning.
- Provide a workshop on the recommended guidelines.
This was a major first step in India’s quest to develop robust decommissioning regulations similar to those used elsewhere in the world, incorporating key international best practices.
Does TSB have any long-term plans for India considering the virtually untapped Indian market for onshore and offshore decommissioning projects?
TSB has been working on Indian projects since 2002, initially with ONGC and later with other operators. To continue this growth and establish a more indigenous presence in India, TSB has a ‘Teaming Agreement’ with Arya Offshore Services Pvt Ltd. (The oil and gas flagship company of the J M Baxi group).
How do you see the future as far as decommissioning projects are concerned? With the increasing global trend towards phasing out some conventional oil and gas exploration and production activities, and with the advent of environmentally friendly fuel and energy applications, do you foresee a huge amount of decommissioning projects to emerge worldwide in the immediate future as governments scramble to replace traditional oil and gas extraction with alternative sources such as solar, nuclear and wind energy?
The transition to non-carbon energy sources will not have an immediate impact on most upcoming decommissioning projects. There currently exists a very large stock of existing oil and gas facilities onshore and offshore. These facilities are likely to serve out their economic lives and then be decommissioned as appropriate. We would expect that the transition in energy sources will eventually cut off the supply of hydrocarbon related facilities to decommission, but by then we’ll be decommissioning something else, wind turbines or nuclear power plants. There will always be something that needs to be shut down and disposed of in a safe and properly executed manner.
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