Lloyd’s Register introduces decommissioning support service

Lloyd’s Register, a global engineering, technical and business services organization, has launched a new decommissioning service, with the timing coinciding with the Offshore Decommissioning Conference 2016 held this week in the UK.

Lloyd’s Register said on Wednesday that the new service would help operators, equity holders, investors and regulators navigate through regulatory and technical complexities of late-life operations and decommissioning.

The organization claims that this service will provide significant cost savings, improve project efficiency, reduce risk, and safely decommission assets and facilities.

Alasdair Buchanan, Energy Director at Lloyd’s Register, said: “Operators are faced with a huge challenge and conflict between maximizing economic recovery, a low oil price and decommissioning on the horizon.

“We understand decommissioning requires an investment with little to no return for operators. The onus is on operators to execute decommissioning in the most cost-effective manner, especially in jurisdictions such as the UKCS where tax relief is available on decommissioning activities.”

The organization said it was offering an integrated portfolio of late-life and decommissioning services to support operators, equity holders and regulators in key territories including the UKCS, Gulf of Mexico and across Asia in how to best manage their operations productivity in the run up to Cessation of Production (CoP) and decommissioning.

Buchanan added: “Following several years of acquisition, we have the in-house capability to support industry across late-life operations and decommissioning. It is a unique offering from CoP preparation, planning, surveys, to plug and abandonment, waste management, and monitoring post removal – all from one independent provider.”

Lloyd’s said that industry estimates suggest the tax certainty created by the UK Government’s policy for oil and gas decommissioning will drive at least an additional £13 billion of capital investment in the North Sea. With that in mind, the company claims it can provide operators with a “one-stop-shop” for the technical expertise and experience needed to run decommissioning projects.

“Determining the nature, timing and sequence of ending the life of a field or facility, in the most cost effective way, requires specialist knowledge of the reservoir, well design, production properties and the process equipment.”

Decom now more relevant

Buchanan stated that before any operator embarks on decommissioning, experienced subsurface teams are needed that use specialists in geology, geophysics, petrophysics, reservoir and petroleum engineering and field development to conduct a range of technical studies.

“The oil price drop has made decommissioning more relevant for many operators, and we believe that as those costs are so big at the end of field life, cost estimates for decommissioning should be subject to careful scrutiny.

“Our process at Lloyd’s Register is also about understanding the minimum that needs to done to achieve a safe and robust decommissioning process. It is also important that solutions are not over-engineered or over compensated for in a costly, remedial activity that has little to do with compliance to certain standards or processes”, added Buchanan.

Lloyd’s said that the service could also be used by non-operated partners or M&A organizations which need to understand decommissioning liabilities and where they are exposed to cost escalation in case of asset acquisition.