Reducing the bill for well abandonment

The world’s portfolio of wells is ageing. Some operators are postponing plugging and abandonment activity, awaiting a change to regulations, and for new technology to enter the market. When a company does decide to permanently plug and abandon existing wells, high expenditures are involved.

It can take several weeks of expensive rig time to permanently plug and abandon a well by setting zonal-isolation cement plugs and, where required, removing parts of wellhead/casing systems.[1]

Plugging and abandonment (P&A) could account for USD150 billion (bn) of forecast decommissioning spend on the UK and Norwegian Continental Shelves (UKCS and NCS) from 2014 to 2050.

The highest portion of the overall decommissioning cost is devoted to well P&A, which is estimated to be 44% of the cost of the total,” said Per Jahre-Nilsen, senior principal engineer with DNV GL - Oil & Gas.

Almost 5,000 offshore wells will require P&A on the UKCS, while the equivalent number offshore Norway is currently 2,350, with 3,000 new wells planned for drilling in the future, he added.

To illustrate the challenge facing one major operator, Norway’s Statoil has around 1,200 wells due for P&A on the NCS by 2040, according to Steinar Strøm, lead advisor P&A for Statoil’s drilling and well engineering improvement projects. Statoil drills 100 new wells, more or less, each year, some of which may also need to be plugged and abandoned in the future.

“Our main task in the short term is to transfer experience between our different assets planning and executing P&A, and to implement more cost-effective methods,” Strøm said. “Our slightly longer-term view includes introducing new and even more efficient approaches and technologies.”

Tackling costs

The quest for greater efficiency may be a greater challenge than is currently thought: forecasts may underestimate cost. “We have heard of plugging and abandonment programmes taking double the time planned, and of significant cost overruns,” said Jahre-Nilsen.

Uncertainty over downhole conditions is a major driver of such scope creep. “Lack of information on wells is one root of uncertainty,” Jahre-Nilsen explained. “A well may have been drilled decades ago, before widespread digital documentation and archiving. Paperwork may be lost or misplaced. Ownership may change without all data being passed on.”

Industry suggestions to improve P&A include the idea that operators should share information on well locations, construction and planning data, lessons from abandonment, and on what specialized tooling was required. Collaborative, multi-year, multi-well P&A campaigns between rival operators could cut costs, and have been discussed with contractors.[2]

Regulations vary in detail between countries, and even between states in the US. However, there is a consensus across the industry that strict compliance with the prescriptive regulations found in many US states will not, in the event of a later leak, eliminate the liability of operators who originally plugged and abandoned a well. Indeed, some wells have leaked post-abandonment.

“I believe a risk-based approach to P&A will increase efficiency while still maintaining acceptable safety levels,” Strøm said. “Plugging and abandonment is generally in the starting phase on the NCS. When P&A becomes more mature, a risk-based approach will be an integrated part of our day-to-day operations, just as it is for our other activities. We see indications that this change in attitude is happening.”