OGV Energy Magazine - Decommissioning - Issue 79

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A WORD FROM OUR EDITOR

Welcome to the April edition of ‘OGV Energy Magazine’ where this month we will be exploring the theme of Decommissioning.

A big thank you to our front cover partner Exceed Energy and you can read all about how they are helping their clients mitigate the challenges of the ‘Decom learning curve’ on pages 4-5 inside.

We also have contributions from Boskalis, Elemental Energy, Decom Mission, Claxton Engineering Services, Flare, Safelift, Impulse Group and the ECITB.

The rest of this month’s magazine as always provides you with a review of the Energy sector in the North Sea, Europe, Middle East and the US, along with industry analysis and project updates from Westwood Global Energy Group, the EIC and Renewables UK.

Warm regards

Dan Hyland - Director

Mitigating the challenges of the decom learning curve

The challenges operators face with the well decommissioning learning curve are mitigated by the well management and decommissioning expertise of EXCEED.

50% of EXCEED’s activity during the past 12 months can be attributed to energy transition operations, and much of that has been focused upon the decommissioning sector. Having honed our well abandonment capability since 2014 through the support of 150+ Rig-Based well abandonments and 12 Vessel-Based well abandonments, EXCEED owns the most diverse decommissioning track record within the North Sea.

Our diverse team of over 30 late life and decommissioning experts totals 300+ years’ experience and we bring our detailed knowledge and understanding of regulations and requirements to each well abandonment campaign, providing the specialist services which control costs and time. Our decommissioning portfolio includes operations on slickline masts, LWIVs, HWUs, platform rig packages, jack-ups, semi-submersibles and CSVs for Vessel-Based Abandonment workscopes.

Innovative Solutions, Globally Scalable

As an independent solutions provider, EXCEED has worked with the North Sea’s pioneering operators in the decommissioning space and we’ve answered some of the biggest well abandonment challenges through the design and build of innovative solutions. A case in point was a recent world first, in which we solved complex issues around the integrity of ageing subsea wellheads ahead of readiness and execution phases.

Every well P&A project will bring unique challenges. The learnings for future activity are invaluable and the solutions we evolve are designed to be scaled and deployed on similar P&A challenges, globally.

Case Study: Solving a historic challenge, fast-tracking a solution

Risk and uncertainty are inherent in decommissioning. Faced with the variety of challenges associated with re-entering old wells, these projects are often characterised by significant problem solving and research, if workscopes are to be achieved efficiently, safely, in line with cost reduction targets and with minimum environmental impact.

Our significant experience has taught us that when dealing with historic wells, a collaborative approach can often provide the optimum solution.

Led by EXCEED, the plugging and abandonment of two NNS subsea E&A wells is an example of collaboration and innovation at its most effective, through solving complex decommissioning

challenges by de-risking the unknowns. This driven and collaborative alliance answered the long-held uncertainty over the model and specification of two 1970s vintage wellheads prior to P&A activity, whilst addressing a loss of industry experience and knowhow, reducing costs and lowering the carbon footprint.

A Scalable Solution

Requiring tenacity, the motivation to trace back over 50+ years’ data, and trust in our industry colleagues’ expertise, EXCEED brought eleven companies together to ultimately mitigate a potential $30 million wasted cost in rig mobilisation with incorrect equipment unable to carry out the required workscope. Mitigating the cost, personnel exposure and environmental impact of a nonproductive rig mobilisation, this approach also fast-tracked a solution which has the potential to be scaled and deployed on similar P&A challenges globally.

Collaboration = Cost, Efficiency & Decreased Environmental Impact

Collaboration moved this project from total uncertainty regarding wellhead type, to full wellhead specification identification and subsequently having equipment ready for P&A in just over a year at a cost of $500,000.

Our insistence on a collaborative problemsolving methodology, and enlistment of our industry colleagues’ help in sourcing and refurbishing existing equipment not only mitigated a fruitless mobilisation, but also the need for an additional two years+ lead time and approx. $2 million for design and manufacture of new equipment.

Under those circumstances, the NSTA’s request for these wells to be abandoned by the end of 2025 would have been challenging to meet, with rig mobilisation likely pushed into 2025/26. Based on current rig market forecasts, this had the potential to add $5 –$10 million to total cost of abandonment.

Case Study : A World First technology –solving cased well challenges

EXCEED was approached to provide Phase 3 Subsea Well Abandonment operations across four NNS E&A wells, at Well Abandonment AB2 status. This led to the development of a new compact model of the Suspended Well Abandonment Tool (SWAT), designed to meet the specific requirements of the project.

All wells were clear candidates for VesselBased Abandonment subsea operations, thus drawing upon on our history and experience in delivering this method and final phase of well P&A services to the industry.

The wells were identified as a mix of CAT 1.1, CAT 2.1 and one CAT 2.2, some of which required the emplacement of a cement plug environmental barrier due to having OBM in the well casing annuli, prior to conducting wellhead severance and recovery.

To further complicate matters, the CAT 2.2 well had five casing strings, the innermost of which was a 7” casing, hung off from the wellhead to well total depth.

Due to the limitation in diameter of the 7” casing, it was unable to take a suitably sized charge to allow severance of the five well casing strings by explosive cutting. This drove the engineering of the severance of this well towards Abrasive Water Jet Cutting technology, as a more optimal severance solution in this instance.

This combination of circumstances required a bespoke tool solution to enable entry into the well and conduct casing perforation and cementing, in order to emplace the required cement plug environmental barrier.

A World First

To answer this challenge, EXCEED approached the key vendors on the market to identify whether such tooling was available. To deploy the most effective and efficient approach to execute the required P&A works, EXCEED utilised lessons learned from previous experience on similar workscopes and utilisation of specific vendors equipment and personnel.

Our decommissioning team decided that the best option, considering the time and other constraints, was to resurrect a tool already in development.

Consequently, the Claxton 7” Suspended Well Abandonment Tool (SWAT) was chosen for the perforating and cementing operations on the CAT 2.2 well. Aligning this perforating and cementing operation with two additional CAT 2.1 wells, on which the multiple field proven Claxton 9 5/8” SWAT would be utilised, resulted in retaining operations within delivery from one key vendor, providing operational efficiencies across common equipment and personnel.

Increasing Commercial Value

The rigless approach achieved significant cost savings compared to a typical rig-based abandonment. The 7” SWAT was developed with the same functionality as the larger diameter 9 5/8” SWAT, to enable common interface with the pre-existing topsides power and control units and subsea reeler umbilical and deployment system, to minimise the footprint of the equipment spread on the vessel.

Minimised Environmental Impact

Abandoning wells from a vessel enabled a significant reduction in carbon emission and cost as compared to the use of a rig.

Beneficially, SWAT was inherently designed to provide a platform to deliver safe clean up of the wells and recover well fluids, such as oil-based mud back to the surface, whilst minimising the impact on the environment, and furthermore the Abrasive Water Jet Cutting, multi-string severance tooling utilised a naturally occurring abrasive that does not pollute or cause damage to the environment.

COMMUNITY news

New Group Management Team

OEG establishes new management team structure to reflect its ambitious growth and diversification strategy.

OEG Energy Group Limited (“OEG”, the “Group”), a leading offshore energy solutions business, is pleased to announce that it has appointed several new management positions to continue to drive the strategic growth of the Group and its complementary business divisions: OEG Offshore and OEG Renewables.

The implementation of this new structure strengthens OEG’s leadership team and its ability to accelerate its ambitious growth plans. Within the group management team are senior appointments within finance, corporate development, health and safety and sustainability as the Group continues to progress its inorganic growth strategy and sustainability initiatives.

Boyden, the global leadership and talent advisory firm, announces the acquisition of FWB's Energy Practice in Scotland, United Kingdom, effective March 1st, 2024.

With this acquisition, Boyden in the United Kingdom will be operating from new offices in Aberdeen, adding to its UK presence in London. The acquisition further strengthens Boyden's industrial practice and enhances its ability to serve clients globally in the oil, gas, mining, and renewables industries.

Nick Robeson, Managing Partner for Boyden in the UK & Ireland, expressed his appreciation to the FWB team involved in the acquisition and stated, "We are delighted to have come to an agreement with FWB to acquire their Aberdeen based Oil, Gas and Energy practice."

The Energy-tech company SeaTwirl announces today on March 25, that an MoU (Memorandum of Understanding) has been signed between SeaTwirl and UK-based offshore intelligent energy management and energy storage specialist firm Verlume, to collaborate around electrification of offshore assets and decarbonization of the oil and gas industry.

SeaTwirl AB and Verlume Ltd. have entered an MoU with the purpose of identifying and pursuing potential opportunities to work together on the decarbonization of offshore oil and gas and other associated offshore electrification opportunities, using renewable power and seabed based energy storage and intelligent energy management. The aim is to enable commercial sales of bespoke systems using the companies' combined technologies as a solution.

Sentinel Subsea triumphs at 2024 Offshore Achievement Awards

Sentinel Subsea, the passive well integrity monitoring specialist, was crowned a winner at the prestigious 2024 Offshore Achievement Awards (OAAs) last night [March 14th 2024]. Celebrating the pinnacle of industry innovation, Sentinel’s WellSentinel™ technology has been recognised alongside six other finalists in the Post-Commercial Deployment category.

Having been shortlisted earlier in the year, the company was chosen by a judging panel of 30 industry experts for its outstanding commitment to lowering risk, reducing costs, and protecting the environment with its advanced passive integrity monitoring solutions.

OPITO, the global safety and skills organisation for the energy industry, has launched a new training standard to ensure increased awareness, competency and reduce incidents in the safety zones around offshore installations.

The Safe Offshore Marine Operations (SOMO) –Offshore Installations & Energy Structures Safety Zone standard has been created to mitigate avoidable collisions within these exclusion areas globally.

The product has been developed in response to a recommendation from the Marine Safety Forum (MSF) and following consultation with the MSF, the Health and Safety Executive (HSE) and other industry stakeholders, to provide best practice to those operating in and around safety zones across energy sectors.

acquires GSES Ltd to enhance their international footprint in hydrocarbon accounting and production management

Cegal acquires GSES Ltd, a UK and Netherlandsbased production data management solutions provider, with an established international client base in the oil and gas industry, to complement their EnergyX offering and broaden their global reach.

Dagfinn Ringaas, CEO of Cegal, says: “The acquisition of GSES represents another important step forward in our mission to become the leading global tech company for the energy sector and contribute to the green shift. GSES’s expertise in hydrocarbon accounting is a perfect complement to our existing EnergyX product portfolio.”

Boyden Expands Presence in Energy Sector with Acquisition of FWB's Energy Practice in Scotland

OPITO launch New Global Standard to address Offshore Safety Zone Incidents

SeaTwirl signs MoU with Verlume

Cegal

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UK

North Sea Energy Review

By Tsvetana Paraskova

expected – maintaining investment in our energy security,” the Chancellor added.

The extension of the windfall tax on oil and gas profits by a year, the outlook on UK North Sea activity this year, and various project updates were the highlights in the UK oil and gas industry in February an early March.

The UK Government is extending the Energy Profits Levy, otherwise known as the windfall tax on oil and gas profits on operators in the UK North Sea, by one year until March 2029.

“As the oil and gas sector’s windfall profits from higher prices are expected to last longer, the sunset clause on the Energy Profits Levy will be extended by a year to March 2029, raising £1.5 billion while encouraging investment in the UK’s energy security by promising to legislate for its abolition should market prices fall to their historic norm sooner than expected,” Chancellor of the Exchequer Jeremy Hunt said in a speech to unveil his Spring Budget 2024.

“The Energy Profits Levy sunset clause will be extended from March 2028 to March 2029 to raise £1.5 billion a year, but legislation in the Finance Bill will abolish the Levy if market prices fall to their historic norm sooner than

The industry criticised the extension of the windfall tax, with the biggest industry body, Offshore Energies UK, slamming the move as “a disappointing blow to the industry which risks jobs, investment and economic growth.”

“The industry is being taxed on windfall profits which no longer exist and facing a fourth round of fiscal change and turmoil in less than two years, making it impossible to plan investment for the energy transition and the path to net zero,” said David Whitehouse, chief executive of Offshore Energies UK.

“We are extremely disappointed that the government continues to ignore clear evidence that we need investment in offshore energy production to grow the economy and achieve net zero,” Whitehouse added.

“We have identified £200 billion of investment in oil and gas and the UK’s wider energy transition awaiting the green light which will not happen with such globally uncompetitive taxation in place.”

According to the offshore industry body, thousands of jobs and billions of pounds in national revenue are at risk because of the destabilising impact of these tax decisions.

Serica Energy also criticized the extension of the EPL, with chief executive Mitch Flegg saying that “It would be remiss not to express considerable disappointment with the extension of the EPL announced in the Budget.”

“Current oil and gas prices do not represent windfall conditions for UK producers and increasing the tax burden on domestic oil and gas production again will be damaging for UK jobs and the economy,” Flegg added.

“The kind of approach exhibited in the Budget will lead to more imports and reduce the ability of our industry to enhance the UK’s resilience to potential energy shocks in the future.”

The extension of the EPL is a “surprising choice” as it would not generate any income for the government for at least four years, said Graham Kellas, SVP, Global Fiscal Research at Wood Mackenzie.

“And a tax that is now expected to have a seven-year lifespan under stable prices does not abide by most definitions of a ‘windfall’ tax,” Kellas added.

On its own, the extension is unlikely to impact investment decisions, according to Kellas. “However, the cumulative fiscal instability has really unsettled North Sea investors. And, in an election year, the opposition Labour party’s tax plan has added significantly to the fiscal uncertainty”.

Labour’s new windfall tax plan will lead to 42,000 jobs and £26 billion of economic value wiped out from the UK economy, OEUK warned in early February. Labour has said it would also raise the current 75 percent windfall tax to 78 percent until 2029.

“The impact of no new investment will be felt across the whole economy – today we estimate the UK will lose £26 billion of economic value,” OEUK’s Whitehouse said.

“It will undermine the very industry which can and must play a critical role in delivering a homegrown energy transition.”

The North Sea Transition Authority’s (NSTA) new all-digital system will make production and flaring and venting consents applications easier to make and volumes easier to monitor, the regulator said.

NSTA has also launched an expanded digital data dashboard, which will provide vital information about upcoming work to potential suppliers and potentially boost cost-efficient decommissioning. The Decommissioning Data Visibility Dashboard now includes fieldspecific information from 15 operators.

Exploration and appraisal (E&A) in the UK had a successful year in 2023, with activity expected to be maintained this year, too, Westwood Global Energy Group said in February in an outlook on the UK and Norway exploration and production for 2024.

Last year, there were five potentially commercial discoveries from nine exploration well programme completions, with combined resources of around 140 mmboe. Over half of the discovered resource was from the largest discovery of the year, at Pensacola in the Southern North Sea (SNS), Westwood noted.

Drilling was spread across all basins with a return to drilling in the SNS and West of Shetland, which had seen no activity since 2019. Shell was the most active explorer, participating in three wells and was operator of two of the five commercial discoveries of the year, including Pensacola.

This year, E&A activity is expected to be maintained. Currently, Westwood’s list of 2024 includes seven exploration wells with pre-drill resources of around 325 mmboe, and a further three appraisal wells. All wells are infrastructure-led exploration (ILX), with one well also considered high impact at Skerryvore, targeting pre-drill resources of 155 mmboe.

In company news, Ithaca Energy said that its net capital spend on the Rosebank oil project last year was $97 million, in line with guidance, and reflecting the meaningful activity in 2023 as project activity ramps up to support a targeted first oil date in 2026/27.

EthosEnergy, which specialises in services and solutions for rotating equipment in the energy and industrial sectors, has signed a five-year master service agreement (MSA) with Harbour Energy. The deal, with an option to extend, sees EthosEnergy become Harbour Energy’s primary service provider for the maintenance and support of a fleet of light industrial gas turbines, across three production assets in the UK North Sea.

For its part, Harbour Energy, the biggest oil and gas producer in the UK North Sea, confirmed in its 2023 results release in early March its previously announced production guidance of 150-165,000 boepd for 2024. Production in 2023 averaged 186,000 boepd, split 52 between percent natural gas and 48 percent liquids and within guidance.

further two-year extension marks the continuation of a long-standing partnership that has existed for over a decade.

Kistos has entered into an agreement to buy EDF Energy (Gas Storage) Limited, from EDF Energy (Thermal Generation) Limited, which owns two gas storage facilities onshore UK – Hill Top Farm and Hole House Farm. The total consideration for the Transaction is £25 million. Kistos’ entry into the gas storage sector provides business diversity to its upstream portfolio within a stable marketplace that offers significant growth potential, the company said.

Serica Energy has completed the acquisition of 30-percent non-operated interests in the P2498 and P2170 licences in the Greater Buchan Area from Jersey Oil & Gas. The partners in the GBA are now Serica Energy with 30 percent, NEO Energy with 50 percent as the operator, and Jersey Oil & Gas with 20 percent.

bp has awarded integrated energy services company Kent a five-year global commissioning framework agreement, under which Kent’s specialists will be fully integrated within bp’s commissioning and completions management team, ensuring a standardised approach across all projects and business units globally.

“It will undermine the very industry which can and must play a critical role in delivering a homegrown energy transition.”

Harbour also said it is currently assessing the potential impact of the government’s extension of the EPL.

Energy services provider Expro has entered into a definitive agreement, subject to customary closing conditions and working capital adjustments, to buy Coretrax, which is specialised in performance drilling tools and wellbore cleanup, well integrity and production optimization solutions, from an investment group led by Buckthorn Partners. The consideration to be paid at closing is around $210 million, including at least $75 million of cash and up to 6.75 million newly issued Expro common shares.

Centrica said in its preliminary 2023 results that it had improved security of supply through doubling the capacity of the Rough gas storage facility, through extending the life of the Morecambe Bay gas field into the 2030s.

Bilfinger has secured a major contract from INEOS to support the ongoing maintenance of the Forties Pipeline System in Scotland. Under the agreement, Bilfinger will provide access, insulation, coating, and fireproofing services for projects, as well as maintenance work for both the onshore and offshore facilities of the 169-kilometre pipeline system. The three-year contract with an option of a

Gazprom International Limited ILLC launched in early March a competitive process to sell its North Sea assets. Gazprom plans to sell its 50-percent share of Wintershall Noordzee B.V., a joint venture with its European partner Wintershall Dea, and 100 percent shares of Gazprom International UK Limited, a subsidiary holding an interest in the consortium participating in the Sillimanite gas field development.

Viaro Energy, an independent British energy company operating in the UK North Sea and the Netherlands, has received regulatory approval from the NSTA for the assignment in the Bressay oil field licence, following the recently completed acquisition agreement with EnQuest. Viaro’s wholly owned subsidiary, RockRose Energy, acquired a 15-percent interest in the Bressay field and the EnQuest Producer FPSO for £46 million.

Viaro Energy has built an extensive portfolio in the North Sea, with mostly non-operated interests in more than 30 assets across the UK Central and Southern North Sea, the West of Shetland, and the Netherlands.

Viaro Energy also announced in early March that it had established a strategic partnership with clean nuclear technology developer newcleo on the future deployment of Advanced Modular Reactors (AMR) to support the decarbonisation of the oil and gas sector. Following the successful completion of feasibility studies, the companies will establish a joint venture to deploy newcleo’s 200MWe lead-cooled fast reactor at Viaro Energy sites to decarbonise its existing and future assets, Viaro Energy said. 

THREE6O ENERGY

A leading life cycle solutions and engineering technology company

David Whitehouse OEUK Chief Executive

Europe Energy Review

By Tsvetana Paraskova

Oil & Gas

Discoveries and oil and gas projects offshore Norway, the future of the UK’s clean energy ambitions and targets, and announcements of offshore wind auctions in several north European countries were the highlights of Europe’s energy sector in late February and early March.

Wintershall Dea's appraisal well 6507/4-4 S on the Adriana discovery has resulted in a minor increase in the resource estimate for a gas/ condensate discovery near the Dvalin field in the Norwegian Sea, the Norwegian Offshore Directorate said at the end of February.

The appraisal well was drilled to confirm the size of the previous discovery Adriana, which was made in 2021. Wintershall Dea and its partners in the production licence – Petoro, Aker BP, and PGNiG – will now consider tying the discovery into existing infrastructure in the area.

Var Energi said that the Balder X project offshore Norway, which aims to extend production to 2045 and consists of four ongoing projects, is making solid progress towards completion. The targeted first oil is now moved to the fourth quarter of 2024, compared to earlier expectations for start-up in the summer.

The high level of exploration and appraisal (E&A) activities offshore Norway in 2023 is expected to continue in 2024 as well, Westwood Global Energy Group said in an insight on the UK and Norwegian exploration and production outlook for this year.

High levels of Norway’s E&A activity is set to continue this year, with 49 planned exploration wells targeting 2.2 billion boe.

Last year saw 15 commercial discoveries from 29 exploration well programme completions, with combined resources of around 440

mmboe. The largest discoveries recorded were Carmen, Øst Frigg Beta/Epsilon, Norma, and Røver Sør, all in the Northern North Sea (NNS), Westwood said.

The Northern North Sea was the most targeted basin with 18 wells and was also the most successful, with around 378 mmboe in discovered resources. Only one well was drilled in the Barents Sea, the lowest since 2010. Equinor continues to be the most active explorer, participating in 21 wells and operating seven of the 15 commercial discoveries of the year, Westwood noted.

Low-Carbon Energy

The UK Government has an opportunity to secure a record number of new offshore wind farms and record amount of new capacity, in this year’s Contracts for Difference auction for contracts to generate clean power, RenewableUK said in a report at the end of February.

RenewableUK’s latest EnergyPulse Insights

Offshore Wind report showed that 14 wind farms are already eligible to bid into this year’s Allocation Round 6, providing nearly 10.3 gigawatts (GW) of new capacity. The previous records were set in 2022 when 8.5 GW was eligible across 7 projects. A further 4.7 GW of new offshore wind capacity could become eligible before applications open for AR6 at the end of March.

The UK Government set in early March in the Budget Notice the parameters that apply to CfD Allocation Round 6, with the budget available for offshore wind at £800 million.

Photo: TRANSOCEAN

Overall, more than £1 billion of funding was made available for this year’s auction for new clean energy projects, including £800 million for new offshore wind farms.

Commenting on the announcement,

RenewableUK said that despite the rise in the clean energy budget for this year’s auctions, the government has missed an opportunity to maximise offshore wind capacity.

“We have more than 10 gigawatts of capacity eligible to bid in this summer. Building this is essential if we’re to make up lost ground from last year’s auction and create the substantial pipeline required to accelerate supply chain investment and growth in the UK. This funding will only secure between 3 to 5 gigawatts,” said RenewableUK’s Chief Executive Dan McGrail.

The UK’s Climate Change Committee urged the government not to loosen future carbon budgets, after the UK met its Third Carbon Budget (2018 to 2022) with a surplus, also due to the economy-shrinking effects ofthe pandemic.

“We congratulate the Government on meeting the latest emissions target – the Climate Change Act is working. But the path ahead is tougher and we risk losing momentum if future legal targets are loosened on a technicality,” Professor Piers Forster, Interim Chair of the Climate Change Committee, said.

“The UK is already substantially off track for 2030 and the Government must resist the temptation to take their foot off the accelerator.”

The UK Government needs to prioritize long-term policy clarity and consistency to create an investable marketplace for energy transition financiers to accelerate the move away from fossil fuels, DNV said in its 2024 UK Energy Transition Outlook (ETO) report.

If it fails to take swift action, the UK would miss its so-called Nationally Determined Contributions (NDCs) target to cut emissions, as well as its legally binding mid-century decarbonization target, DNV’s Energy Transition Outlook 2024 predicts.

The UK’s progress to net zero now seems to be stalling, with the disappointing wind allocation round results in 2023 and uncertainty around decarbonizing home heating and the role of hydrogen, DNV said. The UK government needs to increase policy support to a lowcarbon future, the report noted.

Demand for low carbon hydrogen in the UK’s North West region could support up to 2 GW of hydrogen production by 2030 – a fifth of the Government’s target for the whole of the UK, a new study by the North West Hydrogen Alliance (NWHA) has found.

“The North West is set to become the UK’s home of hydrogen with industrial businesses already signed up to switch to this low carbon fuel and decarbonise their operations,” said Helen Boyle, Head of Regional Development (North West and Midlands) at Cadent on behalf of the NWHA.

The supply chain for floating wind farms in the Celtic Sea could create up to 5,300 jobs and generate £1.4 billion for the UK economy, research commissioned by The Crown Estate showed at the end of February. The independent study, The Celtic Sea Blueprint, was conducted by Lumen Energy & Environment, and looked at the minimum requirements needed to deliver the first three projects outlined by The Crown Estate in December.

Gus Jaspert, Managing Director of Marine at The Crown Estate said,

“If the UK is to make the most of the economic and environmental opportunities from the transition to renewable energy, we must be on the front foot, acting now to develop the supply chain capability, skills and infrastructure needed to establish not just these windfarms but future floating windfarms in the Celtic Sea and elsewhere.”

The North Sea Transition Authority (NSTA) has opened a consultation on proposed regulations for the disclosure of carbon storage information and samples. The consultation, which closes on 12 April 2024, is seeking views on the period of time after which carbon storage information and samples may be disclosed.

wind auction round for Sørlige Nordsjø II, which opens on 18 March. The five groups qualified to take part in the auction are a consortium of Aker Offshore Wind, BP, and Statkraft, another one of Equinor and RWE, Norseman Wind (Energie Baden-Württemberg AG), a consortium of Shell, Lyse and Eviny, and Ventyr (comprising Parkwind and Ingka).

In company news, RWE said it would establish an initial 30-person dedicated Fleet Servicing Team for the UK and Germany to support its growing international offshore wind fleet.

RWE has also secured the highest number of onshore wind projects at the latest French bidding round, which was for a selected capacity of 1 GW at an average price of 87.23 euros/ MWh. RWE has secured contracts for eight projects with a combined capacity of 108.7 MW.

“The UK is already substantially off track for 2030 and the Government must resist the temptation to take their foot off the accelerator.”

Equinor’s H2H Saltend lowcarbon hydrogen production plant has been granted planning permission by the East Riding of Yorkshire Council. H2H Saltend is a 600-MW low-carbon hydrogen production plant with carbon capture, one of the first of its kind and scale to be granted planning permission in the UK, the Norwegian energy firm said.

“Access to this data will enable users to identify potential carbon storage locations and assist decision-making in this growing sector,” said Nic Granger, NSTA Director of Corporate.

The UK government announced at the end of February more than £21 million of government support for seven projects to make green hydrogen. Four of the projects will develop plans for new hydrogen production plants, to supply cleaner fuel to companies across a range of industries, while the remaining projects are set to get spades in the ground in Aberdeen, Tees Valley, and Suffolk, helping to secure the UK’s energy supply by producing more home-grown hydrogen for industry and transport, the government said.

Outside the UK, both Germany and the Netherlands launched offshore wind auctions. In Germany, the network regulator, Bundesnetzagentur, launched on 28 February further auctions for offshore wind farms comprising a total of 5,500 MW at three centrally pre-investigated sites in the North Sea. The regulator will accept bids by 1 August 2024.

In the Netherlands, the regulator launched a tender on 29 February for applications for wind farms in two available permits in the IJmuiden Ver Wind Farm Zone Sites Alpha and Beta, with 2 GW each, which is the largest offshore wind energy tender in Dutch history. The application period will close on 28 March 2024.

Norway, meanwhile, announced that five applicants were approved for the offshore

Green hydrogen producer Lhyfe has unveiled plans for its first UK plant—a proposed facility in the North East of England is receiving support from Shepherd Offshore, a maritime and energy service provider, following the signing of a land deal. If plans are approved, Lhyfe’s plant on the brownfield site of the historic Neptune Bank Power Station in Wallsend, North Tyneside, would have an initial capacity of 20 MW, capable of producing up to eight tonnes of green hydrogen per day.

Energy storage developer Eku Energy has broken ground at two new UK battery storage projects in Basildon, Essex, and Loudwater, Buckinghamshire, with combined 130 MWh of installed capacity. The projects will be built using NHOA Energy’s battery energy storage systems, marking the company’s entry into the UK market, and are expected to be operational by the end of 2024.

Aker Solutions has been awarded a front-end engineering and design (FEED) contract by Hafslund Oslo Celsio (Celsio) to develop the CO2 terminal for intermediate storage and export to ship at the port of Oslo in Norway.

Aker Solutions has also won a contract by Equinor to carry out a feasibility study for its Mongstad Industrial Transformation project in the county of Vestland on the west coast of Norway. The study will aim to identify solutions to significantly reduce CO2 emissions from the existing refinery and transform the site into a new low-carbon industry cluster. 

Energy Review USA

By Tsvetana Paraskova

Mergers and acquisitions activity in the US continued to pick up in early 2024 with more deals announced not only in the Permian shale basin, but also in the Williston Basin in North Dakota and Montana.

The US oil and industry lobby continued to push back against the lowest number of lease sales in history, the Biden Administration’s pause in new LNG export permit approvals, and rules for incentives under the Inflation Reduction Act (IRA).

first two months of 2024.

Diamondback Energy and Endeavor Energy Resources entered in February into a definitive merger agreement, under which the companies will merge in a transaction valued at about $26 billion, inclusive of Endeavor’s net debt. The combination, via stock and cash, will create a premier Permian independent operator.

The combined pro forma scale of the new company would be approximately 838,000 net acres and 816,000 boe/d of net production, with inventory depth and quality with approximately 6,100 pro forma locations with break-evens at below $40 per barrel WTI, the companies said.

“This is a combination of two strong, established companies merging to create a ‘must own’ North American independent oil company. The combined company’s inventory will have industry-leading depth and quality that will be converted into cash flow with the industry’s lowest cost structure, creating a differentiated value proposition for our stockholders,” said Travis Stice, Chairman and Chief Executive Officer of Diamondback.

“With this combination, Diamondback not only gets bigger, it gets better.”

Lance Robertson, president and CEO of Endeavor, said,

is positioned for long-term success as we build the premier Permian-focused company in Midland.”

The merger creates the largest pure play company in the Permian, Wood Mackenzie said in a commentary on the announced deal.

“This deal creates the largest Permian pure play company, and it will trail just ExxonMobil and Chevron in terms of total Permian production,” said Alex Beeker, research director, corporate research for Wood Mackenzie.

“The deal continues a record streak of M&A in the US,” said Beeker.

“After US$130 billion of deals last year, there has already been nearly US$50 billion of deals in the US this year,” Beeker added.

Diamondback’s oil-weighted portfolio affords it some of the best cash margins in the industry, according to Beeker.

“By adding more low-cost Midland oil to its portfolio, the company helps ensure it can protect its strong margins for the next decade.”

Days after the Diamondback-Endeavor deal was announced, Chord Energy and Enerplus said they had agreed to combine in an approximately $11 billion stock and cash transaction, which will create a premier Williston basin-focused exploration and production company.

Photo: Monty Jackson Flickr

The combined firm will have a premier position in the Williston Basin in North Dakota and Montana with deep, low-cost inventory, around 1.3 million net acres, combined Q4 23 production of 287,000 barrels of oil equivalent per day (boepd), and enhanced free cash flow generation to return capital to shareholders.

The recent deals in the US oil and gas industry show how the sector is evolving to succeed in increasingly competitive markets, Ed Crooks Vice-Chair, Americas, at WoodMac, wrote in mid-February.

US shale will be competitive in the long term if operators continue to drive down costs and reduce emissions to compete with the low-cost fields in the Middle East and carbon reduction efforts in Norway.

“The companies making these acquisitions still have to show that they can deliver the prospective benefits in terms of reductions in costs and emissions. But if they can make the progress they are promising, the US onshore oil industry will be in a stronger position to withstand the pressures that it is likely to face in the 2030s and beyond,” Crooks notes.

While a fragmented and dynamic industry was vital for the success of the US shale patch in the earlier years, a consolidated and more stable industry, dominated by the best operators with the lowest costs and emissions, may be better suited to the years of decline in world oil consumption, he added.

benefit from our energy advantage for decades to come.”

Environmental organisations reacted to the API lawsuit, filing a legal challenge of their own to hold the Interior Department accountable for “failing to adequately consider the public health impacts on frontline communities in its final Five-Year Program.”

The lawsuit is seeking stronger protection for the US Gulf of Mexico environment and communities and alleges that “While the program does consider the climate impact of continued oil-and-gas leasing, Interior failed to assess the environmental justice effects of continued offshore fossil fuel development –even after determining that this disparity is a critical issue directly linked to the program.”

Earthjustice attorney Brettny Hardy said, “The oil and gas industry is already sitting on nine million acres of undeveloped leases. They certainly are not entitled to more.”

“Today, we are taking action to challenge this shortsighted program so that future generations of Americans will continue to benefit from our energy advantage for decades to come.”

Kristen Schlemmer, Legal Director & Waterkeeper for Bayou City Waterkeeper in Houston, noted that “It is time for us to transition away from these industries, not enable further drilling in the years to come.”

API Challenges Biden Administration’s Energy Policies

In February, the American Petroleum Institute (API) filed a petition challenging the Biden Administration’s 2024-2029 National Outer Continental Shelf Oil and Gas Leasing Program, which is the smallest in history.

The Department of the Interior’s final fiveyear program outlined a maximum of three potential oil and gas lease sales – the fewest oil and gas lease sales in a five-year program in history – in the Gulf of Mexico Program Area scheduled in 2025, 2027, and 2029. This year will be the first year since 1966 without an offshore lease sale, API noted.

“In issuing a five-year program with the fewest lease sales in history, the administration is limiting access in a region responsible for generating among the lowest carbonintensive barrels in the world, putting American consumers at greater risk of relying on foreign sources for our future energy needs,” API Senior Vice President and General Counsel Ryan Meyers said.

“Today, we are taking action to challenge this shortsighted program so that future generations of Americans will continue to

API has also filed an application for rehearing on the Department of Energy’s (DOE) indefinite pause on new and pending LNG permit approvals for non-FTA countries. In the legal filing submitted to DOE, API argued the pause is unlawful, violating both the Natural Gas Act and the Administrative Procedure Act, and that it erodes America’s energy advantage by threatening US jobs, national security, and environmental progress.

“At a time of geopolitical turmoil around the world, the Department of Energy's arbitrary LNG freeze is not only unlawful – it cedes America’s energy advantage to hostile nations while jeopardizing thousands of American jobs,” API Vice President of Natural Gas Markets Rob Jennings said.

API released at the end of February a new national poll conducted by Ipsos, which showed that two out of three American voters say the country is on the wrong track on energy policy. Following the Biden Administration’s recent pause on LNG export permits, the poll found nine in 10 Americans believe the US should continue to supply natural gas to its allies overseas.

A total of 82 percent of US voters prefer an energy policy that uses an “all-of-the-above strategy” which includes oil and natural gas as well as renewable energy sources, the poll found.

In comments filed on the Section 45V tax credit on clean hydrogen production, API urged the Biden Administration to prioritise production of hydrogen of all types and feedstocks, including blue hydrogen produced from natural gas. The US oil and gas industry association criticised the draft regulation’s focus almost exclusively on hydrogen produced using electricity generated from entirely renewable energy sources. API urged greater emphasis on all solutions that accelerate hydrogen supplies and further reduce greenhouse gas emissions.

API, however, welcomed an announcement in late February from Environmental Protection Agency (EPA) Administrator Michael Regan that existing natural gas power plants would not be included in the administration’s upcoming rule of emissions reductions of power plants.

“API welcomes EPA’s recognition of the critical role natural gas plays in -maintaining electric grid reliability,” said API Senior Vice President of Policy, Economics and Regulatory Affairs Dustin Meyer.

“The reported amendments to the proposed rule come at a time of rapid demand growth, with utilities and grid operators across the country reiterating the urgent need for reliable, dispatchable power supply,” Meyer added.

“Natural gas is the backbone of U.S. electricity generation, complementing renewables and advancing innovations like carbon capture and hydrogen to further reduce greenhouse gas emissions.” 

Photo: Endeavor energy

MIDDLE EAST Energy Review

By Tsvetana Paraskova

Several OPEC+ producers, led by the Middle East’s top crude oil exporters, said in early March they would extend their voluntary cuts of 2.2 million barrels per day (bpd) into the second quarter of the year, in a move widely expected by the market.

In the Middle East, Qatar said it would significantly raise its LNG expansion plans, while Saudi Arabia’s state oil giant Aramco announced billions of US dollars’ worth of procurement deals and announced a jump in the proven natural gas and condensate reserves at its Jafurah unconventional field.

OPEC+ Extends Voluntary Output Cuts into Q2

Led by the world’s largest crude oil exporter Saudi Arabia, several OPEC+ oil producers announced in early March that they would extend their additional voluntary cuts, totalling 2.2 million bpd, into the second quarter of 2024.

Saudi Arabia said on 3 March that the Kingdom would extend its voluntary cut of 1 million barrels per day, which was implemented in July 2023, until the end of the second quarter of 2024 in coordination with some OPEC+ producers.

As a result, Saudi Arabia’s production will be about 9 million barrels per day until the end of June 2024, as it has been for the past nine months, the official Saudi Press Agency reported.

“Afterwards, in order to support market stability, these additional cut volumes will be returned gradually subject to market conditions,” Saudi Arabia said.

The 1-million-bpd voluntary production cut is in addition to the voluntary reduction of 500,000 bpd previously announced by the Kingdom in April 2023, which extends until the end of December 2024. The additional voluntary cut “comes to reinforce the precautionary efforts made by OPEC Plus countries with the aim of supporting the stability and balance of oil markets,” an official source from the Ministry of Energy told the Saudi news agency.

Russia, for its part, also announced on 3 March an extension of its oil supply cuts. But Moscow changed its production/export cut plan and Deputy Prime Minister Alexander Novak said in a statement that in the second quarter of 2024, Russia would reduce supply by 471,000 bpd in the form of cuts to oil production and exports. In April, Russia will reduce production by 350,000 bpd and exports by 121,000 bpd. In May, the 471,000 bpd reduction would be divided into a 400,000-bpd cut to production and 71,000 bpd cut to exports, and in June the Russian supply cut would be 471,000 bpd entirely from production reductions.

Afterwards, these cuts would be gradually reversed, depending on market conditions, Novak said. Russia also reiterated the Saudi and OPEC position that the extension of the extra cuts is aimed at keeping stability and balance on the oil markets.

Oil prices did not move much in either direction following the announcements, as the market had widely expected a rollover of the production reductions into the second quarter. Saudi Arabia will continue to dominate the pledged output reductions with its 1-million-bpd cut, while Russia promised to focus more on oil production cuts rather than exports. A lack of storage capacity and low refinery throughput expected in the second quarter of 2024 may have prompted Moscow to pledge cuts to output instead of export reductions, as has been the case in Q1, analysts say.

OPEC Sees Robust Oil Demand Growth in 2024 and 2025

Following 2.5 million bpd growth in oil demand in 2023, global consumption is set for another healthy 2.2 million bpd growth in 2024, reflecting robust economic growth expected this year, OPEC said in its Monthly Oil Market Report (MOMR) from February.

Total global oil demand is expected to reach 104.4 million bpd in 2024, with 105.47 million bpd in the fourth quarter, OPEC said.

This year, oil demand growth will be driven by China, with expected growth of 600,000 bpd year over year, further supported by the Middle East with an increase of 400,000 bpd compared to 2023.

Looking ahead, global oil demand in 2025 is projected to expand by 1.8 million bpd from 2024, and to reach 106.2 million bpd. Non-OECD oil demand growth, expected at 1.7 million bpd, will drive the total consumption increase next year, according to OPEC’s estimates.

Qatar To Further Boost LNG Export Capacity

Qatar, one of the world’s top three LNG exporters, announced at the end of February that it would add a third major LNG expansion project to its two current projects, all of which would raise its total LNG export capacity by 85 percent from current levels by 2030.

Qatar’s state firm QatarEnergy said it would proceed with a new LNG expansion project, the so-called North Field West project, after drilling appraisal wells at the world’s largest natural gas field, the North Field it shares with Iran.

“Extensive appraisal drilling and testing have confirmed that productive layers of Qatar’s giant North Field extend towards the west, which allows for developing a new LNG production project in Ras Laffan,” QatarEnergy’s president and CEO Saad Sherida Al-Kaabi said.

The North Field West project adds to the ongoing North Field East (NFE) and North Field South (NFS) expansion projects. The three developments are set to significantly raise Qatar’s LNG production capacity to 142 million tons per annum (MTPA) before the end of this decade—a jump of nearly 85 percent from the current production levels of 77 MTPA.

“QatarEnergy has focused its efforts and attention on determining how far west the North Field’s productive layers extend in order to evaluate the production potential from those areas,” said Al-Kaabi, who is also Qatar’s Minister of State for Energy Affairs.

“I am pleased today to announce that, praise be to God, these great efforts have confirmed, through technical tests of the appraisal wells, the extension of the North Field’s productive layers further towards the west, which means the ability to produce significant additional quantities of gas from this new sector.”

Al-Kaabi added, “These are very important results of great dimensions that will take Qatar’s gas industry to new horizons, as they will enable us to begin developing a new LNG project from the North Field’s western sector with a production capacity of about 16 MTPA.”

QatarEnergy will immediately launch the basic engineering works necessary to ensure that the planned progress is achieved according to the approved schedule for the North Field West project, the company said.

Deals and Ventures

Qatar’s Emir, Sheikh Tamim bin Hamad Al Thani, in February laid the foundation stone for the Ras Laffan Petrochemical Complex, which will be one of the largest in the world and which will raise Qatar’s petrochemical production capacity to about 14 million tons per annum by the end of 2026, QatarEnergy said.

The complex, which will cost $6 billion to build, is the largest investment in Qatar’s petrochemicals sector in the history of QatarEnergy. It will have an ethane cracker with a capacity of 2.1 million tons per annum of ethylene, making it the largest in the Middle East and one of the largest in the world, and raising Qatar’s ethylene production capacity by more than 40 percent. The complex will also include two polyethylene trains with a combined annual output of 1.7 million tons of High-Density Polyethylene (HDPE) polymer products, raising Qatar’s overall production by about 50 percent.

to make tangible progress in developing Jafurah, which is one of the company’s growth engines and an important economic resource for the Kingdom,” Aramco president and CEO Amin Nasser said.

“The field represents a key element in our ambitious strategy to increase Aramco’s gas production.”

In the United Arab Emirates, ADNOC announced in mid-February a new gas joint venture with bp in Egypt. The JV, in which bp has 51 percent and

“Together, we will build on the 60 years of safe and efficient operations of bp and its partners in Egypt, and continue to produce and deliver secure, lowercarbon energy in the form of natural gas to the country.”

QatarEnergy holds an equity share of 70 percent in the Ras Laffan Petrochemical Complex, with Chevron Phillips Chemical owning the remaining 30 percent.

Saudi Aramco advanced its strategic localisation program by signing at the end of February 40 corporate procurement agreements worth $6 billion with suppliers in Saudi Arabia.

Aramco has also announced it had added significant volumes to the proven gas and condensate reserves at the Jafurah unconventional field in Saudi Arabia. Proven reserves increase by 15 trillion standard cubic feet (scf) of raw gas and two billion stock tank barrels (STB) of condensate. Aramco now estimates that Jafurah contains a total resource of 229 trillion scf of raw gas, alongside an estimated 75 billion STB of condensate.

“Aramco’s upstream business is deploying state-of-the-art technologies including advanced modelling and artificial intelligence

ADNOC 49 percent, will combine the companies’ deep technical capabilities and proven track records as it aims to grow a highly competitive gas portfolio. As part of the agreement, bp will contribute its interests in three development concessions, as well as exploration agreements, in Egypt to the new JV. ADNOC will make a proportionate cash contribution which can be used for future growth opportunities.

“This dynamic JV offers a platform for international growth that advances our longstanding and strategic partnership with ADNOC that spans over five decades,” said bp’s William Lin, Executive Vice President of Regions, Corporates & Solutions.

“Together, we will build on the 60 years of safe and efficient operations of bp and its partners in Egypt, and continue to produce and deliver secure, lower-carbon energy in the form of natural gas to the country.”

In early March, ADNOC said that it generated $500 million (AED1.84 billion) in value by deploying artificial intelligence (AI) solutions in 2023. The value was generated from the integration of over 30 industry-leading AI tools across ADNOC’s full value chain, from field operations to smarter and quicker corporate decision making, the Abu Dhabi company said. 

BRENT OIL PRICES OVER THE YEARS

Brent

1 YEAR AGO

1 Year Ago - $87.31

Goldman sachs raised price forecasts for Brent crude futures following a surprise announcement from OPEC that the producer alliance would cut oil output further. This saw Brent futures surge to a near-one month high following the OPEC announcement, with Goldman saying the move was surprising.

5 YEARS AGO

5 Years Ago - $74.39

The price of Brent crude opened above $70, sustaining its five-month highs as global oil supply tightens with OPEC cuts, and with sanctions on Iran and Venezuela. Crude prices had been on the rise since the start of 2019 as overall oil supply was tightening around the world.

10 YEARS AGO

10 Years Ago - $109.79

Brent held near the $110 mark as geopolitical tensions over Ukraine worsened, overshadowing U.S. industry data that showed crude stockpiles in the world’s largest oil consumers rose nearly six more times than expected. Unrest in Ukraine wouldn’t directly impact global oil supplies but overall risk was rising as investors worried it could take a turn for the worst.

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1

SURINAME

$1 billion Petronas

BLOCK 52 EXPLORATION DRILLING PROGRAMME

Drilling of the Fusaea-1 oil exploration well has begun with support of the Noble Voyager drillship, and activities are planned to end in April 2024. The present activity will be followed by appraisal work at the Sloanea-2 gas prospect. The drilling of both wells is expected to last until August 2024.

2

QATAR

$1 billion QatarEnergy

IDD AL-SHARGI NORTH DOME (ISND) OFFSHORE OIL FIELD, PHASE 5

Worley has been awarded the contract from COOEC to provide engineering services for COOEC's EPC contract. The work will be led by Ranhill Worley in Malaysia and is expected to be completed in September 2024. The first steel cutting for COOEC's EPC work is scheduled for June 2024.

3

CYPRUS

$500 million Eni

CRONOS GAS DISCOVERY

Drilling and production testing of the Cronos-2 appraisal well has been completed. The Cronos-2 well confirmed the lateral extension of the Cronos-1 discovery drilled in August 2022. Cronos-2 encountered several carbonate reservoir intervals with a net reservoir thickness of 115 metres. The production test confirmed an excellent gas deliverability of the well.

4

TRINIDAD & TOBAGO

$850 million BP

CYPRE SUBSEA TIE-BACK

BP began a seven-well drilling programme in Cypre on 20 February 2024. In total, seven wells will be drilled with the support of the Valaris 118 jack-up rig. The field development plan received government approval in January 2024, and first oil is expected in 2025.

5

SAUDI ARABIA

$500 million Saudi Aramco

JAFURAH FIELD DEVELOPMENT –PHASE 3

Aramco is currently tendering an EPC contract for gas compression facilities for the Jafurah phase 3 project. The interested bidders are JGC, Sinopec and Larsen & Toubro. The technical and commercial bids are expected to be submitted in March 2024 and Aramco is expected to select its preferred bidder in H2 2024.

6

HEIDRUN B FLOATING STORAGE UNIT UPGRADE

Odfjell Technology has been awarded the contract to provide engineering, construction, and installation services on the upgrade of the FSU, which will include the implementation of an advanced Air Quality Enhancement System and upgrading lifting apparatus. The work has already started and it is expected to be completed in Q1 2027.

SPARTA OFFSHORE OIL FIELD

MANGETTI-1X OIL DISCOVERY

7

TRION OFFSHORE OIL FIELD

Dril-Quip has been awarded a contract to supply Trion's subsea wellhead systems. The scope of the contract entails the use of Dril-Quip's BigBore™ IIe subsea wellheads. The company's facility in Villahermosa, Mexico, is understood to have been involved in the delivery of the scope.

8

KAMINHO FIELD DEVELOPMENT PROJECT

It was announced that TotalEnergies is planning to make a final investment decision on the project in 2024. The field development project includes the installation of a 100,000b/d FPSO linked to five wells. The unit will be installed at Cameia, with a tieback to Golfinho. The project will also incorporate a combined cycle turbine for electrical generation and a zero flaring concept.

KEPE-KEPE GAS DISCOVERY

12

Pre-FEED work has been completed and is set to move into the FEED stage. The development will involve a leased FPSO vessel with a capacity to handle between 30,000 and 55,000 b/d of oil and 100 MMcf/d of gas. 9

TechnipFMC has been awarded an integrated EPCI (iEPCI™) contract by Shell for Sparta's SURF equipment. The contract scope requires tree systems capable of handling high-pressure production systems rated up to 20,000 psi, to be used by Shell for the first time. The contract is valued between US$250 million and US$500 million

TotalEnergies has made an oil discovery offshore Namibia, but it is too early to say whether the find is commercial. The drillship Tungsten Explorer is drilling the Mangetti-1X probe in Block 2913B, which is targeting a prospect at a shallower geological depth than Venus.

A significant gas discovery was made at the Kepe-Kepe 1 exploration well in Teluk Bintuni, West Papua Province. The exploration well was drilled to completion at the end of December 2023. Full details of the discovery have not yet been announced.

SALAMPATAWALI FIELD DEVELOPMENT (BLOCK WL4-00)

DECOMMISSIONING Opportunities in the Energy Sector

By Tsvetana Paraskova

Decommissioning in the energy industry poses challenges for operators and project developers but it is also a huge opportunity for companies in the supply chain and for firms looking to create innovative solutions to recycling the components used in renewable energy installations.

As many oil and gas fields mature and near their end-of-life operations, especially in areas developed for decades such as the UK North Sea, and as the early wind and solar farms are now reaching the end of their lifespan, decommissioning adds to costs operators need to disburse. But decommissioning activities also represent multi-billion business opportunities in various regions.

UK North Sea DecommissioningA £20 Billion Business Opportunity

Shutting down obsolete North Sea energy installations is a business opportunity worth more than £20 billion over the next decade, according to calculations by Offshore Energies UK (OEUK) in its Decommissioning Insight 2023 report.

At present, the UK North Sea has 283 active oil and gas fields. By the end of the decade, 180 of these will have ceased production, OEUK said.

“Closing them without ongoing management of decline through new licensed production will mean a loss of homegrown energy which provides security and adds value to the economy,” according to the association, which estimates that even with the latest round of new licences issued last year, North Sea oil and gas production is declining by 7 percent a year.

Of all the oil and gas expenditure in the UK continental shelf in 2022, decommissioning accounted for 12 percent. With more fields maturing and reaching end of life operations, the share of decommissioning could jump to as much as 25 percent in 2032, and overtake capital expenditure by 2040, in the right fiscal environment, OEUK’s report found.

The Energy Profits Levy has had a damaging knock-on effect on decommissioning progress, according to the report. The tax has led to North Sea oil and gas operators paying a 75 percent headline tax rate and affected decommissioning progress as the cost of shutting down old installations is not treated as an allowable expense, OEUK says.

The Decommissioning Insight report also points out that more than 1,000 North Sea wells will be sealed between now and 2027 – with 100,000 tons of surface and seabed structures set to be removed in 2026 alone. At the same time, around 200 new large scale wind turbines are scheduled to be installed, representing a considerable infrastructure and workforce challenge.

“Specialist UK organisations are well positioned to provide a global centre of expertise in this sector as demand for decommissioning services grows around the world, but innovation and resilience will be vital,” the association noted.

“This is a £20 billion business opportunity for our world-class decommissioning industry, and it is vital it is handled properly so we do not lose the work to overseas competitors,” said Ricky Thomson, OEUK decommissioning manager and author of the report.

“For the UK supply chain to work with maximum efficiency, it needs to be able to accurately forecast demand for its services, in both oil and gas and across low carbon technologies, such as offshore wind and carbon capture.”

According to Thomson, “Government support will be needed to maintain the UK’s involvement in the sector. Thousands of jobs and contracts for billions of pounds’ worth of highly skilled work are at stake.”

The latest North Sea Transition Authority (NSTA) Decommissioning Cost and Performance Report from August 2023 showed that the industry spent a total of around £8 billion on decommissioning between 2017 and 2022, including £1.6 billion on decommissioning redundant wells and infrastructure in 2022, more than in any of the previous five years.

NSTA expects decommissioning activity levels to remain high, with about £2 billion a year forecast to be spent on decommissioning in the next decade.

This would be “a massive opportunity to keep developing skills and experience in the basin and help the supply chain win lucrative contracts overseas by reinforcing its status as global leader,” NSTA said.

In an encouraging sign, UK suppliers are in line to secure around 70 percent of the work associated with UK North Sea decommissioning projects listed in Supply Chain Action Plans (SCAPs) lodged with the NSTA in 2022.

Achieving further improvements in decommissioning speed and costs will be challenging, NSTA reckons, “in the face of factors including heightened demand for equipment, vessels and services from other regions and sectors, such as offshore wind – which have pushed up prices, taking the total cost estimate for decommissioning to £40 billion.”

“The NSTA is confident that industry can overcome these hurdles and meet its costefficiency target – lowering the estimate to £33.3 billion by end-2028. However, operators must strive to deliver their agreed schedules and commitments, work even more collaboratively with the supply chain and share their plans earlier, ensuring resources are available at the right time,” the regulator said.

Decommissioning Costs outside UK

Offshore decommissioning activity and opportunities are also growing outside the UK, notably in Australia, Southeast Asia, and the Gulf of Mexico.

The Centre of Decommissioning Australia (CODA) estimates that more than US$40 billion of decommissioning work will be undertaken in the next 50 years in the offshore oil and gas industry alone, including topsides and substructures equivalent to 75 Eiffel Towers. Australia also has a very significant quantity of onshore work associated with wells and process infrastructure.

The International Association of Oil and Gas Producers (IOGP) has said that in Southeast Asia, it is predicted that more than 200 offshore fields would stop producing by 2030 with total decommissioning costs estimated to range between US$30 billion and as much as US$100 billion.

Since 1950, more than 12,000 offshore oil and gas platforms have been installed globally, Norton Rose Fulbright said in a 2023 report on sustainable offshore platform decommissioning. It is forecast that 2,600 of these platforms may require decommissioning by 2040 at a cost of approximately US$210 billion. Newer platforms located in deeper waters face higher decommissioning costs, Norton Rose Fulbright notes.

In the United States, the Bureau of Safety and Environmental Enforcement (BSEE) has estimated that US Gulf of Mexico deepwater decommissioning activity is a market valued at $24.3 billion, with wells and structures the most important cost categories, followed by pipelines, according to an analysis by Mark J. Kaiser, a professor at the Center for Energy Studies at Louisiana State University in Baton Rouge.

Well abandonment accounts for almost fourfifths of the market, $18.9 billion, followed by structure removal operations, $3.1 billion, at about 10 percent of total market size, Kaiser wrote in a series of articles in Offshore magazine last year. Combined, wells and structures account for over 90 percent, or $22 billion, of the estimated market. Pipeline decommissioning contributes nearly 10 percent, and site clearance – less than 1 percent of total cost.

Decommissioning in Renewables Sector Set To Pick Up

Decommissioning in the energy industry includes a growing market of solar and wind farm decommissioning and challenges in recycling of wind turbine blades, solar panels, and batteries.

Solar panels and wind turbines typically have a life of about 20 to 30 years. The first such installations are now nearing end-of-life operations, and the market is set to further grow as more structures cease operating. Experts have urged renewable energy project owners, developers, and other stakeholders to plan for project end-of-life obligations.

“Effective decision-making procedures are required to protect the environment, taxpayers, and local communities against the potential economic and environmental impacts of OWF assets at the end of their lifetime,” Dr Shahin Jalili from the UK’s National Decommissioning Centre wrote in a paper on offshore windfarm (OWF) decommissioning at the end of 2023.

Repowering old wind turbines – replacing them with new ones – can play a key role as Europe needs to double its wind energy capacity by 2030, sector association WindEurope said in November. New data have shown that Europe would decommission more than repower between now and 2030.

In Scotland, ScottishPower Renewables is repowering Scotland’s first commercial windfarm Hagshaw Hill in South Lanarkshire, after 28 years of operation. The 16 MW site is about to undergo a process of repowering, becoming home to 14 new wind turbines with a combined capacity of over 79 MW. Once complete, the windfarm will be capable of producing around five times the amount of clean, green energy than before, from just over half the number of turbines, ScottishPower said last year.

Companies are also working on sustainable solutions in wind blade recycling which has been a key challenge to the renewables energy industry in recent years.

In Spain, EnergyLOOP, a company owned by FCC Ámbito and Iberdrola for the recycling of wind farm components, has signed a collaboration agreement with Spanish firm Surus, active in circular economy projects, to provide a joint solution for the recycling of wind turbine blades in wind farm repowering projects. EnergyLOOP aims to recycle wind turbine blade components and put them to reuse in sectors such as energy, aerospace, automotive, textile, chemicals, and construction.

Spain’s ACCIONA and RenerCycle said in November they would build a wind blade recycling plant in Navarra, which is expected to be operational in 2025.

The new plant will be Spain’s first facility to use a proprietary thermal treatment technology for the recycling of composite materials present in wind turbine blades. The technology, based on the use of moderate and controlled temperature, will help preserve the properties of the reinforcement fibres, reuse the organic fractions, and transform the composite materials into secondary raw materials with high added value that can be used in new production processes with a quality comparable to that of virgin raw materials, ACCIONA says. 

Critical Safety Processes for Flow line, Iron & Chiksan Pipework

The lack of standard safety procedures on pipework, both onshore and offshore could lead to catastrophic incidents.

In addition, having your iron packages sent to the field without certification can also lead to unintended consequences.

Intervention Rentals follow clear safety guidelines, carry out standardised practices and adhere to industry approved processes for Flowline, Rig Iron & Pipework where we offer the following services:

» Recertification and 100% traceability of all items

» Banding identification of all equipment

» Certified replacements and spares packages

» Trained and competent personnel

» Onsite surveys of your current pipework

Safety comes first at Intervention Rentals. We have over 20+ years’ experience managing flowline safety!

sales@interventionrentals.com

A novel approach to decommissioning wells in complex conditions

By Ruari Truter, Senior Wells Adviser Elemental Energies

With many North Sea fields nearing maturity, the oil and gas industry faces the costly and complex challenge to plug and abandon (P&A) over 2,000 legacy wells across the basin. The estimated £20 billion cost of North Sea decommissioning could be compounded by damage to well barriers and gas leaks increasing abandonment costs.

A recent project carried out by Elemental Energies in the UAE to permanently plug deep wells in challenging conditions offers insights on how to safely decommission wells with similar complex requirements to those found in the North Sea.

The UAE wells abandonment project involved decommissioning a series of deep wells with a range of complex conditions including some with sustained annulus pressure (SAP) from a high-pressure gas zone leaking into two annuli. This required dual-section milling, cutting away a complete section of casing across two adjacent casing strings to access and then completely close the leak path. In addition there were concerns that the leaking gas could penetrate and contaminate a freshly set cement plug. The challenge was compounded by the high mud weights needed to control the high-pressure gas zone.

Elemental Energies drew on over 30 years of international multidisciplinary well

engineering expertise to develop a novel mix of technical solutions. The Elemental Energies team incorporated a wide array of tools from across the market and carried out extensive engineering work to tailor deployment to the specific conditions within the wells. This included selecting and fine-tuning a range of section milling tools based on the downhole requirements matched to the specific advantages of each technology. The milling operation was optimised by tailoring the hydraulics and fluid properties to the milling parameters. Optimising milling solutions to a challenging operating environment helped yield valuable insights about the limitations of specific equipment which could improve the efficiency of dual-section milling across similar harsh operating environments. By engaging with the supply chain early on, Elemental Energies effectively managed equipment constraints through strategic planning, drawing upon insights into the most readily available and suitable technologies for each unique challenge.

The project engineers adopted the novel solution of integrating bismuth alloy with a traditional cement barrier and an inflatable packer; an innovative deployment of this combination for well abandonment in the Middle East. A complimentary combination of bismuth and cement offered a robust solution tailored to combat the complexities of highly

mobile gas and sustained annulus pressure. A 6-foot bismuth alloy was installed at the bottom of the well before two cement plugs were installed on top, tagged, and pressure tested. Bismuth alloy both expands and solidifies once cooled, completely sealing the base of the well to both protect the cement from contamination while it set and provide a gas-tight barrier.

As a result, Elemental Energies significantly enhanced both the reliability and efficiency of the well-plugging process, achieving success on the first deployment in contrast to alternative methods that typically require multiple attempts. If replicated worldwide, this could dramatically reduce the time and cost of successfully decommissioning wells with similarly harsh operating environments such as those in the North Sea.

Lessons learned about the optimal ratio of pumping rate and fluid properties for specific section milling requirements could have applications across many wells with similar conditions globally. New insights into the optimal mix of tools for certain well conditions could help operators plan to bring in the appropriate technologies for specific wells at an early stage and avoid later supply chain shortages. And ultimately, the integration of bismuth alloy into plug and abandonment projects could lead the way to a reduction in demand for cement with major associated cost and carbon emission savings across the industry.

Decommissioning presents significant challenges to the energy industry, including the need to optimise time and cost, while ensuring the strictest levels of regulatory compliance and abandonment integrity. This demands high quality engineering, operational expertise, and an open-minded approach to the newest technologies.

The industry needs decommissioning focused teams, with the expert knowledge of such methods and technologies, and a close relationship with the supply chain, to deliver P&A activity at scale. At Elemental Energies, we take pride in leading this effort and will continue to invest in expanding our decommissioning offering, empowering our team to pioneer innovative approaches for global P&A projects.

Leading the way: T he Impulse Group's latest innovations in subsea technology

With a keen focus on innovation and continued investment in new product development, The Impulse Group strives to meet the unique needs of subsea operations worldwide with a range of innovative solutions.

Two such innovations are their state-of-the-art videoscope inspection and the wireless subsea umbilical pressure monitoring system.

State-of-the-art videoscope inspection

The Impulse Group prides itself on selecting state-of-the-art equipment to conduct annulus inspections and tests, and the IP67-rated probe in their videoscope inspection kit is no different. The IP67 rating means that the probe is waterproof and capable of withstanding the pressures of subsea inspections.

The videoscope fits into the smallest of spaces for inspection, from the internal annulus of unbonded flexible pipes, behind-end fittings and under the bend stiffener of a riser, to turbine gearboxes and generators.

Wireless monitoring and testing

Monitoring and testing systems are usually mounted close to the umbilical termination head, access and space constraints are almost always a concern. The Impulse Group Umbilical Pressure Monitoring System offers wireless pressure monitoring that provides real time graphical data that can be viewed on a tablet or personal computer. With up to 800m range without need for a booster, the system provides the necessary pressure monitoring within congested spaces typical of transportation and installation vessels.

Innovation you can trust

By providing real-time accurate results, with The Impulse Group’s products you can see exactly where potential problems may arise, ensure safety and prolonged service life.

The Impulse Group’s videoscope technology and pressure monitoring system are designed to perform even in the most extreme environments presented in subsea conditions, providing you with clear information without the risk to your engineers. 

CLAXTON REPORT: Bespoke Designed 7" SWAT™ For a Rigless Oil Well Abandonment Project in The North Sea

Project Overview

Claxton, a cutting and decommissioning brand in Acteon’s Energy Services division, was contracted by EXCEED Energy to abandon five wells in the Northern North Sea.

Claxton was awarded both phases of the well abandonment scope. The first phase involved plugging the wells to prevent environmental harm. In the second phase, a solution was devised and implemented for wellhead severance and recovery.

Claxton provided bespoke rigless abandonment technologies including a new compact model of the suspended well abandonment tool SWAT™ designed to meet the specic requirements of the project.

Operations were carried out from the subsea construction vessel Siem Day.

The Challenge

One of the four wells had a 7” x 32 lb/ft casing. The standard conguration of SWAT which operates in casing sizes 9 5/8” through to 13 3/8” could not be used to place the environmental plug in this well.

The well therefore required a specially designed compact 7” SWAT to be used. However, due to a restricted back deck, it also needed to have a smaller footprint but maintain the same functionality and interface as the larger 9 5/8” SWAT that was being used for the other wells.

Supplying a well abandonment tool to perforate, circulate out oil-based mud and place an environmental cement plug across two annuli within the drift diameter of 5.969” (151.6mm) was going to push tolerances.

The abandonment work was also completed

in the winter amid challenging weather conditions in the North Sea.

Customer Goals

The goal was to abandon the five wells in the two oil fields while reducing project costs and carbon footprint as well as minimising the environmental impact.

Our Solution And Its Commercial Benefits To The Project

Market-leading services and integrated solutions

SWAT was used to perforate the well annuli, recover oil-based mud and place environmental cement plugs in three of the four wells.

The multi-string severance tooling combined with the wellhead picker was used to sever wellheads >10 ft below the mudline and recover the well stumps to the vessel.

A new SWAT was designed, procured, manufactured, assembled, and tested for use inside a 7” x 32 lb/ft well casing.

Claxton worked with Probe, another brand in Acteon’s cutting and decommissioning segment, for manufacturing the new SWAT.

Operational bases across the world

The SWAT was designed, procured, assembled, and tested at Claxton’s Great Yarmouth base in the UK.

Probe’s Great Yarmouth facility was used for the machining and manufacturing work.

The tools used for wellhead severance were delivered from Claxton's sites in Aberdeen and Norway.

Work at scale with a proven track record for delivery

Both phases of the project were overseen by one project manager to provide a single interface to the customer.

SWAT has a strong track record proven across 120 North Sea wells.

Optimise the project to increase commercial value

The rigless approach achieved significant cost savings compared to a typical rig-based abandonment.

The 7” SWAT was developed with the same functionality as the larger tool to enable easy interface with the existing subsea disconnect and umbilical to minimise the footprint of the equipment spread on the vessel.

Minimise the environmental impact

SWAT was able to safely clean up the wells and recover well fluids such as oil-based mud back to the surface while minimising the impact on the environment.

The multi-string severance tooling utilise a naturally occurring abrasive that does not pollute the environment or cause damage.

Abandoning wells from a vessel enabled a significant reduction in carbon emission and cost as compared to the use of a rig.

Products Used

SWAT

Multi-string severance tooling

Wellhead picker

Industry’s commitment to assuring competence a great example of safety leadership in action

By Engineering Construction Industry Training Board (ECITB) Chief Executive, Andrew Hockey

World Day for Safety and Health at Work this month once again provides a great opportunity to highlight the vital role safety training plays in helping prevent workplace fatalities and accidents in the engineering construction industry (ECI). While workers are always required to undertake basic safety training before being deployed to sites, they do not necessarily need to demonstrate their ‘current’ technical competence to ensure activities are carried out safely.

The ECITB’s Labour Forecasting Tool predicts 40,000 extra workers could be needed in the industry by 2028, and so the need to build resilience and make sure workers entering sites are technically competent has never been more important.

When competencies are not assured on a regular basis, people can become complacent or may not maintain the level of technical competence required to operate safely.

Either of these situations can lead to error, but there should be no room for error when working in such hazardous environments because, as we’ve seen, the consequences can be devastating.

Incidents such as Piper Alpha, Bacton Gas Terminal and Deep Water Horizon were all avoidable. Serious managerial failures were attributed to all these events, including the lack of diligence around the recognition and assurance of competence standards.

A string of mistakes created the perfect storm for the world’s most severe and fatal offshore oil and gas accident when 167 people were killed on Piper Alpha in 1988 due to “inadequate maintenance and safety procedures”.

One of the biggest drivers behind the Connected Competence initiative is to help avoid workplace incidents like this.

Connected Competence assuring ‘base level’ standards

Connected Competence is an industry-driven initiative, supported and enabled by the ECITB, which assures an ongoing base level of technical competence for workers across the industry.

Developed with some of the UK’s largest contracting companies, each has committed

to working together to use standardised testing to create a safer, more competent and transferable workforce.

Connected Competence was formally adopted as an industry-wide framework in 2021, focused initially on aligning base technical competence standards among oil and gas workers.

The initiative reduces the duplication of assessments and costs, speeds up the deployment of competent personnel between sites, but most importantly, increases safety through the recognition and ongoing assurance of base technical competence.

It aims to standardise a common approach, benchmarked against National Occupational Standards, by requiring workers to demonstrate their ongoing technical competence every three to four years.

When the base standard has been achieved – either at site, as part of an employer’s competence management system, or at a testing centre – candidates receive a digital badge, of which more than 22,000 have been issued since 2021.

By every site-based worker assuring their ongoing base technical skills, we can take great strides towards a safer industry for everyone.

Making an ongoing commitment

Connected Competence employers have demonstrated outstanding commitment to safety in their collaborative actions to standardise a base level of technical competence for site-based trades.

The initiative is mandated by major service companies, including Aker Solutions, Bilfinger, Global E&C, Ponticelli, Petrofac, Semco Maritime, Stork, Wood and Worley, while 19 asset owners, including Shell, bp, Serica Energy and Harbour Energy, have now signed the Connected Competence Client Charter.

Signing the charter commits asset owners to recognising and promoting Connected Competence as the industry base standard for technical competence assurance, including it in supply chain contracting strategies and supporting the continued success of the scheme.

Connected Competence is recognised not only by clients and supply chain contractors but

regulators, industry associations, government and trade unions, who have all contributed to the collaborative efforts of the scheme.

This collaboration around competence assurance has been an excellent example of safety leadership in action.

The successful delivery of the energy transition will require the industry’s continued support for Connected Competence to help steer the delivery of a safer, larger pool of technically competent workers to benefit the industry.

The ongoing skills being assured through Connected Competence are common skills relevant across all sectors of the engineering construction industry.

The goal is to expand the initiative across other energy sectors, such as nuclear, wind, onshore refining and chemical industries, to enable skills transfer across sectors and support workforce safety and resilience for the energy transition.

Health and safety training

The ECITB’s Leading Industry Learning Strategy prioritises ensuring the industry has the skilled workers it needs, especially when it comes to holding the requisite health and safety skills and knowledge when operating on safety-critical sites.

Safety training, such as the ECITB’s CCNSG Safety Passport scheme, helps develop a positive health and safety culture to reduce accidents and lost-time incidents on sites.

CCNSG is the nationally recognised safety card for the industry in the UK, with more than 100 safety passports, on average, issued to workers every day.

The two-day training course has delivered industry-leading safety accreditation for more than 30 years, ensuring workers have the underlying fundamental safety training they need to keep themselves and their colleagues safe.

For this World Day for Safety and Health at Work, we’re calling on more contractors and site owners to adopt nationally recognised schemes, like the CCNSG and Connected Competence, to increase the industry’s safety resilience and ensure all workers have the same level of competence. 

Unlocking Opportunities & Collaboration; Keys to a Successful Decommissioning Future

Flare, a global partner supplying award-winning critical safety services to the Energy industries, have bolstered their expansion strategy with continued investment into their commercial hire division.

The increased rental capacity is expected to support the growing decommissioning sector both regionally, within the UK, and internationally to foreign territories. Flare anticipates the collaborative initiative amongst the local supply chain will provide essential backing for the UK economy as the industry looks to refurbish and repurpose key assets into new energy transition fields.

Flare’s latest commercial line, Hazardous Environment Specialist Services, has received considerable interest from the decommissioning sector with opportunities for provision of high and low pressure breathing air solutions and a wide range of gas detection systems amongst their dynamic range of core safety services.

“At Flare we recognise the opportunity here in the UK to continue to grow and learn as key players in the supply chain network, to the point where we can export this expertise globally as other mature fields approach end of life.”

Having assessed and identified some key challenges associated with late-life operation and decommissioning, where Flare has the expertise to support, it was recognised that their competitive solutions were not widely known within this niche industry. Similarly, it was found that the techniques and equipment used by other industry contenders have changed very little in several decades. Flare continue to focus their commitment on improving upon existing working practises and infrastructure to ensure that their safety

programmes are ‘best in class’ and exceed their clients’ expectations while delivering economical and efficient results to an evolving oil and gas lifecycle.

Results from Flare’s decommissioning strategy review generated three key step change opportunities that the organisation can readily implement to optimise P&A projects and keep costs to a minimum for Operators and Contractors in the field.

Hazardous Area Classification – It was found that when completing decommissioning activity such as breaking of containment into an old wellhead, circulating out fluids from subsea infrastructure or recovering downhole equipment, that these activities often take place in zoned areas. Existing protection measures, such as that for breathing air, are often dispensed using ‘safe area’ equipment meaning that a surge in requirement for larger spreads and remote supplies is on the horizon. Flare has substantially enhanced their range of Zone 1 solutions to ensure that the latest technology and safety equipment packages are readily available for deployment and operation in the field. Their custom-tailored solutions are carefully monitored throughout the duration of a project and can be modified to meet the needs of a specific task, thus keeping costs a minimum and delivering key performance capability.

Footprint - The second step change for improvement was footprint. Deck space being a premium is nothing new to the industry, however, it is only logical that when there is no deck space available some ‘ideals’ are sacrificed for ‘essentials’. The disruption of additional space consumed by bulky safety equipment can often lead to time consuming compromises which can impact the duration and practicality of work activity.

Flare has developed a wide range of low-impact, industry leading safety solutions to ensure footprint is minimised as far as possible.

Even a simple logistical solution where containers are strategically backloaded to

make room for essential decommissioning equipment has provided immediate congestion relief onboard installations and assets, freeing up vital deck space for other activities or equipment. This ensures that personnel have a suitable and adequate Respiratory Protective Equipment (RPE) solution as their ‘last line of defence’ should an issue occur with former barriers and risk mitigations.

Cost & Efficiencywork tirelessly with their own supply taskforce to unlock resources, drive costs down and implement the use of technology to maximise their overall service value. Flare advocate that decommissioning activity is an essential cost that must be funded in order to achieve our net zero targets yet complications and unexpected delays can have an exponential impact on the facilitation of this goal, as well as the budget. The industry continues to drive collaboration of all parties involved, from drilling contractors and operators to local and global supply chains as well as industry & regulatory bodies, as a means of sharing knowledge, risks and mitigating against unforeseen situations.

Flare’s specialist safety solutions are competitively priced with flexible packages that cater to a wide range of scopes, duration and specified requirements. In addition, they encourage open discussion and forward planning in order to contribute their collective efforts and phased approach to decommissioning operations. This plan promotes adequate budget allocation with little to no deviation should the unexpected occur, as it often does in the decommissioning world.

In summary, Flare has made considerable progress supporting the P&A sector with their new HES line of business and have proven to be a key player in supporting new and improved decommissioning models with their vast offering of specialist safety services.

“There is so much potential that lies ahead for the Energy world and we are proud to play a part in the progression of a greener, global future.

Looking Forward to… Decom Week 2024

As the only independent trade association focused on decommissioning in the international energy industry, we are active across the oil & gas, nuclear and renewable energy sectors; providing insight and market intelligence, member advocacy, and a calendar of events ranging from subject-specific workshops to Decom Week, held each May and this year sponsored by Boskalis.

Our overarching objectives are to connect, inform, establish best practice and facilitate industry relationships – and each element is well represented by this year’s agenda.

As many of you will know, we’ve spent the past year visiting our members and stakeholders, conducting deep dives into their businesses and reviewing current and future sector needs. The themes for Decom Week ‘24 have been developed as a result of these engagements with agenda contributions from a range of companies and organisations including operators in the oil & gas and renewable sectors, service companies active across the global industry and energy membership organisations, the Nuclear Decommissioning Authority and Global Underwater Hub.

Unprecedented insight –Decom Annual Report unveiled

Also instrumental in the development of the conference agenda has been the inaugural Decom Mission Annual Survey. Offering unprecedented insight into the global decommissioning supply chain landscape, the report is set to provide primary insight into current capability and capacity, as well as a snapshot of sentiment across the sector and in particular the role it plays in a sustainable energy transition.

Developed in partnership with data science experts, Empirisys, the survey has been designed to deliver a range and depth of feedback which should – in the case of oil and gas decommissioning – be viewed as

a necessary complement to the demand curve data industry receives annually. We look forward to premiering its findings to the Decom Week audience.

Technology, change and people

Those themes reflect the emphasis placed upon common challenges, lessons learned and the cross-sector applications of technology and services in decommissioning.

Reflecting the sector emphasis upon well abandonment, a half-day Wells Decommissioning Forum, hosted by the NSTA, will precede a two-day agenda which will shine a light on material changes that are happening across the sector - from company structure to the critical twin challenges of people and skills retention which are of particular importance when addressing the need to ensure a sustainable supply network as demands open up from competing locations and industries.

Guest speakers including organisational development consultant and coach, Kurt Lindley and diversity & inclusion leader (and Chartered Engineer), Dr Mark McBride-Wright, will complement the conference technical agenda, and provide the people-centric focus so critical to the sustainability of our industry.

Providing some healthy competition away from the golf course (see below), the Decom Pitch Battle will showcase some of the sector’s newest, most innovative solutions with a panel of industry experts ready to provide feedback and support.

Key to previous years’ success, the Decom Week indoor/outdoor exhibition remains firmly at the top of the list for those who are keen to discuss products, services and want the opportunity to get up close to some of the larger pieces of kit which are making an impact across the decom sector.

Building relationships, celebrating success

Decom Mission firmly believes that there is also huge value to be gained from including a more light-hearted side to the week and - as attendees have come to expect in recent years - Decom Week will also offer opportunities to socialise on the golf course on Monday 20th, or with cycling and walking events on Friday 24th. There will also be the opportunity to down tools and enjoy an informal evening meal in Stonehaven on Wednesday 22nd, in the company of fellow delegates. 

A fixture in the industry calendar, Decom Mission’s Decom Week ’24 is set to provide a now-renowned mix of technical conference, exhibition and our own style of networking - all under the banner of “Changing Perspectives: Meeting Demand for Future Challenges”

Innovation in technology and planning, keys to managing decommissioning projects safely

The number of offshore decommissioning projects in recent years is increasing, and there is still much to be done.

A 2023 report from the North Sea Transition Authority estimates that there is £40 billion of remaining oil and gas infrastructure decommissioning to be completed on the UK Continental Shelf.

Decommissioning assets can present opportunities but there are critical challenges too, like managing waste, fluids, and any toxic or flammable gases that have built up over years. Anytime hazardous substances are involved, situations can quickly become dangerous – which is why it’s important to plan and have the right safeguards in place. Being safe is paramount, but making sure the work is completed is important as well.

Assessing the risks and planning ahead

Before starting a decommissioning project, asset operators need to consider risks to personnel, potential asset damage, financial implications, and regulatory compliance. This also means identifying the client’s requirements and any identified potential hazards. To comply with HSE guidelines, there must be method statements that include steps for managing each hazard, escalation response, and any required coordination with onboard HSE officials.

An offshore team would need to be dispatched to conduct gas testing and monitor site conditions continually, as well as ensuring personnel are equipped with PPE and breathing apparatus. If gas levels force a work stoppage, the team will manage the situation, including installing an extraction system. Constant checks would be done to make sure the environment around them is safe while they carry out their work.

In well decommissioning, you may encounter a range of toxic or flammable gases – from hydrogen sulphide (H2S) to methane to benzene. Your protection provider must be ready to measure all types of gasses on-site and have equipment ready to deliver the right solutions for your job.

Preparing for site challenges before you start

With a high degree of uncertainty about things like structural integrity, fluids used, gasses present or even record keeping, mature assets present a unique challenge. There’s also the likelihood of changing conditions every day and a higher risk of gas pockets surfacing, such as when cleaning out a well. These points should be identified by your system provider so sampling activities are planned accordingly.

Training sessions are crucial for ensuring that personnel have safety equipment that works, fits properly, and that they are confident in know how to use it. Being well-trained and confident with your safety equipment can make all the difference when faced with a hazardous situation.

Dräger delivers innovation in technology and safety

There have been innovative advances in new technologies to detect hazardous gasses faster and interpret gas detector information easier. Increases in digitalisation mean onshore teams get rapid real-time information and cloud-based data storage allows you to access that information from anywhere.

Dräger’s Gas Detection Connect is a cloudbased software solution that integrates information from all our devices, allowing you to monitor facilities in real-time and react to emergencies fast. Clients receive a full

audit trail on all sampling and gas readings –timestamped with gas levels at each variation. When your project is complete, you have the data to review, analyse, and share as needed.

Pairing this software with the Dräger X-pid gas measurement device can determine the composition of different gases without needing specific sensors for those gases. Add the popular Dräger X-act 7000 and you can monitor for multiple gases with one device – even ones that you may not have expected to find on site. Together, it makes an effective early warning system to help protect your project and your workers.

Getting accurate information to your onshore teams fast means they can properly support their offshore teammates. While the industry will always rely on physical offshore workers, our job is to make them as safe as possible.

The Dräger difference

At Drager, we support safe and continuous operations. Providing cost-effective efficient support to keep decommissioning operations and people safe is how we can add value to you and your project. We detect risks and protect people from them, and we can supply you with the right equipment, people and experience to safely manage your project –from start to finish.

We use Dräger-built equipment. We train ourselves and you in it, service it, hire it out, and sell it – a complete decommissioning safety package using one manufacturer’s products and trained specialist engineers. We’re the only company in the market that offers this service. We have about 9,500 items in our rental fleet, which means we can mobilise our equipment and personnel immediately.

Global certification award a step change for QHSE Aberdeen

QHSE Aberdeen has been formally recognised for the standard of its training after agreeing a partnership with a globally renowned industry body

The Westhill-based company is a leading provider of professional consultancy and advisory services to organisations that require assistance with developing and implementing robust ISO management systems across a wide range of sectors, including oil and gas, renewables, nuclear, and construction.

Since 2015, the award-winning company has demonstrated its commitment to excellence in providing high-quality training solutions across quality, health, safety, and environmental disciplines. It has now been confirmed as an approved training partner with the Chartered Quality Institute (CQI) to deliver International Register of Certificated Auditors (IRCA) certified ISO 9001 internal auditor courses.

With the introduction of IRCA certification, QHSE Aberdeen has underlined its dedication to ensuring that professionals receive training of the highest standard, validated by industry experts. This latest milestone follows increasing demand from clients to provide IRCA certified training courses and involved a rigorous assessment process and stringent criteria.

The IRCA certification is respected worldwide as the benchmark for quality in auditor training. By partnering with CQI and IRCA, QHSE Aberdeen ensures that its ISO 9001

internal auditor courses meet these exacting standards, providing participants with a highly sought-after certification.

Dave Rusling, managing director at QHSE Aberdeen, said: “This certification represents a welcome endorsement of the standards that define QHSE Aberdeen’s operations and speaks volumes of the hard work and talent of our people who have developed, implemented and maintained robust management systems which underpin the delivery of client services

“We are committed to putting our clients at the heart of the services that we offer. Having listened to their feedback, we’re delighted to be able to offer high-quality, certified training courses which will add real value and create sustainable solutions for their respective organisations.”

With IRCA certified courses due to begin in April, QHSE Aberdeen has appointed a new member of staff, specifically to help deliver QHSE training, and is looking to hire a second person to provide additional support.

In addition to offering public courses for individuals seeking certification, CQI and IRCA certified ISO 9001 internal auditor courses are now available for in-house delivery at client sites and can be customised to meet organisations’ specific needs.

For more information about QHSE Aberdeen's CQI and IRCA certified ISO 9001 internal auditor course and upcoming training schedule, please visit the dedicated page via the company’s website.

Angela Scott, business development director at QHSE Aberdeen, commented: “The training side of our business continues to grow organically, so it’s a natural step for us to certify these courses in response to demand from existing clients.

“This partnership agreement bolsters the quality and depth of learning on offer and cements our position as a one-stop shop for helping organisations gain ISO certification and then train their staff to maintain it.

“Meanwhile, our small team of experts in their field allows for more personal client relationships, with advisers being appointed to clients based on their skillset and experience in that particular sector.”

Established in December 2015, QHSE Aberdeen has gone from strength to strength with the size of its team more than doubling over recent years, the creation of a new management team, and a move to larger office premises in Westhill.

The company’s focus on people – its own team as well as those working within clients’ organisations – has allowed it to stand out from the competition. This ethos was recognised by judges at the 2022 Northern Star Business Awards, where the business received the Customer First honour. 

Preparing your organisation to deal with a crisis

Nobody likes to imagine the worst happening, and no business wants to think that it might have to face a crisis. Thankfully, most businesses will never have to deal with a major accident or other critical incident, but they do happen, and inevitably occur without warning, often at the worst possible time.

Here, we suggest some of the key elements that every business should include in its crisis management preparations.

Have a crisis management plan - It should be clear and concise. There is an understandable temptation to prepare a lengthy plan which considers every possible scenario and sets out detailed protocols and procedures for multiple permutations of each, but this will be even more unhelpful than no plan at all. Your crisis management plan will only ever be used in the most stressful and challenging of circumstances, and a cumbersome document which is difficult to navigate will only exacerbate the difficulties. The best crisis management plans are surprisingly succinct, making clear what the key roles are, who will assume them and what they key actions are in the first 24 hours after an incident. They are a user-friendly guide for your teams, not a textbook.

Focus on three priorities - In the immediate aftermath of an incident, irrespective of its nature, your business will have three priorities (i) business continuity, (ii) PR and communications, and (iii) incident investigation. Each must have a separate team focussed on it. The team responsible for keeping the business running cannot be distracted by contact from the media, and those who are trying to understand the root cause of the incident cannot be involved in making public statements in case they inadvertently share information that should not yet be in the public domain.

Be ready to handle external interest - Any critical incident attracts immediate media attention. You need to retain as much control as possible over the external message. The best way to do that is to have a single point of contact for all media inquiries. That avoids the risk of two well-intentioned but contradictory statements or, worse still, a comment being made by someone who does not have the most up to date information. Any spokesperson should be senior enough to demonstrate that the incident is being taken seriously, but comfortable enough with the media to cope with the barrage of questions. Note that this will not always be your CEO.

Don't forget about social media – In the modern world you will rarely be the first to know about an incident affecting your business. Photographs and video footage of incidents will be on social media within minutes. Plan how you are going to monitor social media – it can be a useful source of information. What about your own social media channels? Will they be suspended, or have the ability for staff to post or comment restricted? Do you have a policy about what your staff can and cannot say on social media about an ongoing incident? All of these issues must be considered in advance.

Take appropriate external advice - Get your lawyers, whether internal or external, involved early and let them deal with those concerns. Also, don’t forget your insurers. Particularly when it comes to public statements, approval from your insurers is critical. You don’t want to run the risk of cover being declined at the worst possible time.

Every business should take the time to think about them now and put a plan in place. the last thing you want to be is unprepared 

Want to know more?

Brodies LLP is a UK top 50, and leading Scottish, law firm with offices across Scotland, the UK and internationally. For more useful insight and details of our energy expertise visit brodies.com

Malcolm Gunnyeon and Clare Bone, both partners and health and safety experts, Brodies LLP

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TDigital Technology Transforms Safety in Oil Well Decommissioning

By Benson John MSc CEng MIMeche Assistant Manager - R&D Tax Incentives

hese wells, which are frequently old and have trouble maintaining consistent oil flows, present serious logistical uncertainties and safety risks to maintenance teams. Historically, monitoring these wells necessitated regular ship and helicopter trips, which led to expensive operating expenses and poor visibility into persistent problems.

Identifying the urgent need for a safer and more efficient solution, companies in the Oil and Gas industry have turned to digital technology. The result is a groundbreaking end-to-end IoT solution for wellmonitoring, designed specifically for older, remote, and less prolific wells. This innovative solution leverages recent technological advancements for real-time monitoring and data analysis. By combining digital sensors, satellite connectivity, and advanced software, companies can remotely monitor their wells 24/7, regardless of location.

This digital monitoring solution's effectiveness was confirmed by extensive testing and deployment. The technology not only satisfied stringent safety requirements, guaranteeing the safety of maintenance staff, but it was also simple to incorporate and dependable in challenging conditions. This solution has proven effective and dependable, with an uptime of 99.8% and sensor accuracy exceeding 99.75%.

The enhanced safety and visibility of remote well monitoring are among its most important benefits. Engineers no longer need to brave treacherous conditions to manually inspect wells, reducing the risk of accidents and injuries. Furthermore, there are significant financial benefits because remote monitoring is far less expensive than manual monitoring techniques. Real-time data accessibility also helps

businesses make well-informed decisions that maximise output and swiftly resolve problems. Operators may guarantee that their oil fields continue functioning smoothly and effectively by providing regular well pressure and temperature data.

Even in offshore environments, the monitoring system is easy to integrate and can be set up in hours. The sensors do not require complicated wiring or other power sources as they are battery- and solar-powered. With ATEX certification for usage in hazardous settings and IP67 waterproofing, the system is additionally designed to survive harsh circumstances.

In conclusion, digital technology has made decommissioning oil wells safer and more efficient. Traditional manual monitoring techniques can be replaced with more affordable, dependable, and secure remote well-monitoring systems. The Oil and Gas sector can guarantee the sustainable and responsible management of wells no longer in use by adopting these innovations, opening the door to a safer and more ecologically sensitive future.

For companies involved in innovative projects, tackling unforeseen and challenging developmental work to drive technological innovation warrants the exploration of HMRC's R&D Tax Relief Scheme. As a leader in innovation funding, Leyton offers expert guidance and support for firms seeking financial backing for their R&D endeavour. Leyton's extensive experience can assist companies in availing significant tax relief for their pioneering work. By partnering with Leyton, companies can confidently apply for R&D funding, ensuring their innovative efforts are maximally rewarded. 

For more information visit: leyton.com

Saipem (SAPMF) Wins Offshore Carbon Capture Projects in the UK

NEP is a joint venture among BP, Equinor and TotalEnergies. NZT Power is a joint venture between Equinor and BP.

As part of the project, Saipem will be responsible for the engineering, procurement, construction and installation of a 28" and 145 Km offshore pipeline for the NEP project. It will also be accountable for the associated landfalls and onshore outlet facilities of the same project. For the NZT project, Saipem’s scope of work covers the engineering, procurement, construction and installation of the water outfall.

The final award to Saipem is contingent upon receiving relevant regulatory clearances along with positive final investment decisions (FIDs) by the projects and the government of the United Kingdom, planned for September 2024 or earlier.

Upon completion, the two projects will serve the East Coast Cluster in Teesside. The carbon capture projects are expected to have a transportation and storage capacity of 4 million tons per year, beginning 2027.

Saipem’s flagship vessel Castorone will carry out the offshore pipeline operations. The operations near the shore will be performed by Castoro 10, the company’s shallow water pipelay.

SAPMF states that the LOI solidifies its position in the low and zero carbon segments, highlighting its engineering and technological expertise, along with its core competencies and assets across the Carbon Capture and Storage value chain.

The company is fully committed to supporting the NEP and NZTP partnerships by leveraging its best competencies. The commitment is crucial in realizing the first zero-carbon industrial hub in the North-East of England and making progress toward the U.K.’s net zero targets.

Saipem is a multinational oilfield services company, based in Italy. It is involved in drilling services as well as engineering, procurement, construction and installation services for both offshore and onshore projects.

Zacks Rank and Other Key Picks

Currently, SAPMF carries a Zacks Rank #2 (Buy).

Apart from Saipem, investors interested in the energy sector might also consider Sunoco LP (SUN), Archrock Inc.(AROC) and Energy Transfer LP (ET) . Sunoco presently sports a Zacks Rank #1 (Strong Buy), whereas Energy Transfer and Archrock each hold a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunoco LP is one of the largest distributors of motor fuel in the United States. The partnership distributes fuel to independent dealers, commercial customers, convenience stores as well as distributors. Its current distribution yield is greater than the composite stocks in the industry, providing unitholders with consistent returns.

Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. With a pipeline network extending more than 125,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, the partnership’s outlook seems positive.

Zacks Names #1 Semiconductor Stock

It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.

With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. 

Saipem S.p.A has signed a letter of intent (LOI) related to two projects to develop offshore carbon dioxide transportation and storage infrastructure for the East Coast Cluster in the United Kingdom. The company has been awarded the Northern Endurance Partnership (NEP) and Net Zero Teesside Power (NZT) projects.

Shell To Invest $15bn On Energy Transition

This is contained in its published first energy transition update since the launch of its Powering Progress strategy

The Anglo-Dutch energy company said it had already invested $5.6 billion on low-carbon solutions, more than 23% of our total capital spending in 2023.

“These investments include electric vehicle charging, biofuels, renewable power, hydrogen and carbon capture and storage. Our investments in new technologies are helping to reduce emissions for Shell and our customers.

“We aim to help scale new technologies to make them an affordable choice for our customers and are focusing our advocacy on key areas which we believe are critical to the energy transition: policies that support national net-zero ambitions including carbon pricing, supplying the secure energy the world needs, driving changes in demand and growing lowcarbon solutions.”

On the Energy Transition Strategy, Shell recalled that at its Capital Markets Day in June 2023, it outlined how our strategy delivers more value with less emissions, emphasising the “more value” part.

“In this energy transition update, we are focusing on how the same strategy delivers “less emissions,” Shell said in a statement posted on its website.

The statement reads further: “Our target to achieve net-zero emissions by 2050 across all our operations and energy products is transforming our business. We believe this

the Paris Agreement to limit global warming to 1.5°C above pre-industrial levels.

“Shell’s strategy supports a balanced and orderly transition away from fossil fuels to low-carbon energy solutions to maintain secure and affordable energy supplies.”

Shell’s Chief Executive Officer, Wael Sawan, was quoted as saying: “Energy has made an incredible contribution to human development, allowing many people around the world to live more prosperous lives. Today, the world must meet growing demand for energy while tackling the urgent challenge of climate change.

By providing the different kinds of energy the world needs, we believe we are the investment case and the partner of choice through the energy transition,” said Sawan.

These investments include electric vehicle charging, biofuels, renewable power, hydrogen and carbon capture and storage. Our investments in new technologies are helping to reduce emissions for Shell and our customers.

Shell also informed that its energy transition plans “cover all our businesses. Liquefied natural gas (LNG) is a critical fuel in the energy transition, and we are growing our world-leading LNG business with lower carbon intensity.

“We are cutting emissions from oil and gas production while keeping oil production stable, and growing sales of low-carbon energy solutions while gradually reducing sales of oil products such as petrol, diesel and jet fuel.

As one of the world’s largest energy traders, we can connect the supply of low-carbon energy to demand, as we have done for many years with oil and gas.

“Shell’s strategy supports a balanced and orderly transition away from fossil fuels to low-carbon energy solutions to maintain secure and affordable energy supplies.”

“I am encouraged by the rapid progress in the energy transition in recent years in many countries and technologies, which reinforces my deep conviction in the direction of our strategy.

“Shell has a very important role to play in providing the energy the world needs today, and in helping to build the low-carbon energy system of the future. Our focus on performance, discipline and simplification is driving clear choices about where we can have the greatest impact through the energy transition and create the most value for our investors and customers.

“We believe this focus makes it more, not less, likely that we will achieve our climate targets.

We have made good progress against our climate targets:

By the end of 2023, we had achieved more than 60% of our target to halve emissions from our operations by 2030, compared with 2016. This goes above and beyond the targets set by signatories to the Oil and Gas Decarbonization Charter agreed at COP28.

We continue to be an industry leader in reducing methane emissions. We were one of the first companies to set a target to achieve near-zero methane emissions by 2030. In 2023, we achieved 0.05% methane emissions intensity – significantly below our target of 0.2%. And in 2023 we also contributed to the World Bank’s Global Flaring and Methane Reduction Fund – further supporting industrywide action to drive down methane emissions and flaring.

In 2023, we achieved our target to reduce the net carbon intensity of the energy products we sell, with a 6.3% reduction compared with 2016 – the third consecutive year we hit our target." 

in 2021.

target supports the more ambitious goal of

LAGOS – Shell plc (Shell) plans to invest about $10-15 billion between 2023 and the end of 2025 in low-carbon energy solutions, in line with its drive to net zero.

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Infinity Partnership: Your Partner in Business

Infinity Partnership is an award-winning, multi-disciplinary accountancy and business advisory practice, with a proactive approach to customer service.

Infinity has been a five-time winner at the British Accountancy Awards and has been a three-time finalist at the Scottish Accountancy Awards in recent times.

Renewables for Subsea Power (RSP) project completes 12-month milestone

Graeme

of Net Zero Technology at NZTC says:

“It’s fantastic to see the RSP project successfully demonstrated. The work carried out during this project shows what’s possible when innovative technology is given the right financial and industry support. This is only the beginning for Mocean Energy’s Blue X wave energy converter and Verlume’s Halo underwater battery storage system; future phases will further accelerate the technology’s development and accelerate commercialisation, which is always the end goal.”

The joint industry participants and developers are now evaluating near-term and future plans for further deployment or possible testing on live assets.

This may include deploying a similar project in Scottish waters, and / or a new project or projects overseas to further demonstrate how this combination of green technologies can enable reliable low carbon power and communications to subsea equipment in a live environment.

The final phase will commence shortly and will include removing all equipment from the site, ahead of inspection and clean down onshore in Orkney and at Verlume’s operations facility in Dyce, Aberdeen.

The £2million Renewables for Subsea Power (RSP) project connected the Blue X wave energy converter – built by Edinburgh company Mocean Energy – with a Halo underwater battery storage system developed by Aberdeen intelligent energy management specialists, Verlume.

The industry-backed project, located 5km east of Orkney Mainland, has shown how green technologies can be combined to provide reliable and continuous low carbon power and communications to subsea equipment, offering a cost-effective future alternative to umbilical cables, which are carbon intensive with long lead times to procure and install.

In recent months energy majors TotalEnergies and Shell Technology – Marine Renewable Program have joined project leads Mocean Energy and Verlume in the pan-industry initiative, alongside PTTEP, the Thai national oil company, Serica Energy, Harbour Energy, Baker Hughes, Transmark Subsea, and the Net Zero Technology Centre (NZTC).

“The test programme has been a tremendous success,” says Andy Martin, Chief Commercial Officer at Verlume.

“This phase of RSP was initially conceived as a four-month at-sea demonstration, but the quality of data and the robustness of our combined technologies as well as tremendous support from the oil majors, led us to extend the programme to a full year. We now have increasing confidence in the reliability and the commercial potential of this system.”

Ian Crossland, Commercial Director at Mocean Energy says:

“In the subsequent months, all the technology providers will examine critical components for wear and tear against performance metrics defined both individually and as a fully integrated power and communications ecosystem. A key part of this process will be assessing lessons learned and any future upgrades that may be required for a fully commercial system.”

In 2021, the consortium invested £1.6million into phase two of the programme – which saw the successful integration of the core technologies in an onshore test environment at Verlume’s operations facility in Aberdeen.

In 2021, Mocean Energy’s Blue X prototype underwent a programme of rigorous atsea testing at the European Marine Energy Centre’s Scapa Flow test site in Orkney, where it generated first power and gathered key data on machine performance and operation. Verlume’s subsea battery energy storage system, Halo, has been specifically designed for the harsh underwater environment, reducing operational emissions and facilitating the use of renewable energy by providing a reliable, uninterrupted power supply. Halo’s fundamental basis is its intelligent energy management system, Axonn, a fully integrated system which autonomously maximises available battery capacity in real time. 

A groundbreaking ocean energy project which has combined wave power with subsea energy storage to power subsea equipment has now completed a 12-month test programme at sea and will end this Spring.

Rogerson, Head

TechnipFMC Scoops Sparta Subsea Work

TechnipFMC has been awarded a substantial contract by Shell for the first integrated engineering, procurement, construction, and installation project to use high-pressure subsea production systems rated up to 20,000 psi (20K) for the Sparta development in the deepwater US Gulf of Mexico. TechnipFMC defines a substantial contract as one valued between $250 million and $500 million.

The contractor will manufacture and install subsea production systems, umbilicals, risers, and flowlines for the development in the Garden Banks area of the Gulf of Mexico. The tree systems will be Shell’s first to be qualified for 20K applications and are engineered to meet the high-pressure requirements of this greenfield development.

Shell previously awarded the construction of the Sparta floating production unit (FPU) to Seatrium. The system will be the third “sister” platform built by the Singapore yard for Shell following the deliveries of both Vito and Whale. The Sparta FPU will be capable of producing 90,000 BOED.

Shell took FID on Sparta last December. The field is estimated to hold more than 240 million BOE of recoverable reserves.

The development features eight subsea production wells and two subsea drilling bases connected via two production loops to the FPU. Production is slated to begin in 2028. Sparta was originally discovered in 2012 by Cobalt Energy and Total, when it was called North Platte. The Wilcox-aged discovery requires 20K-psi technology to develop. Cobalt went bankrupt in 2017 and sold its stake in the field to Norway's Equinor. In early 2022, then partner TotalEnergies walked away from the project, leaving Equinor with 100% interest.

Shell purchased 51% of Equinor’s interest and became the new operator of the field in August 2022. Equinor retained a 49% interest in the project. The partners later changed the name of the field to Sparta. 

Worley awarded Engineering Services Contract from Aramco

Aramco has awarded Worley a General Engineering Services Plus (GES+) contract for an additional five (5) years with potential for an extension of up to three (3) one-year increments. This renews the long-standing relationship between Aramco and Worley in relation to services provided under the GES+ contracts

Worley’s scope includes the provision of project management and engineering services to support Aramco’s capital programs in Saudi Arabia across onshore, green and brownfield projects in gas, oil and new energy infrastructure. Worley categorizes this contract as traditional work in accordance with Worley’s definition of sustainability-related work2. Under the terms of the contract, Worley will continue to build its in-Kingdom engineering capabilities, with a focus on developing and using local talent to undertake more complex projects in the Kingdom.

“We’re pleased to continue our long-term relationship with Aramco to support the delivery of their capital programs through this contract renewal while expanding on our substantial inKingdom capability,” said Chris Ashton, Chief Executive Officer of Worley. 

Wood joint venture secures new framework agreement with Shell in Trinidad & Tobago

HOUSTON – 19 March 2024 –Wood’s joint venture company, Massy Wood, has secured a five-year framework agreement with Shell Trinidad and Tobago (Shell), for the delivery of engineering projects and asset support in Trinidad and Tobago.

This agreement will support Shell’s onshore and offshore assets, providing a suite of services that includes turnaround support for their mature brownfield assets and supporting new greenfield projects.

Steve Nicol, Executive President, Operations at Wood comments: “This agreement is a strategic achievement for our team in Trinidad, solidifying Massy Wood as the front-runner of asset integrity in the region. We are dedicated to supporting our clients today through asset management and upgrades delivering energy security to the region.”

Shawn Combden, Wood’s President of Operations, Americas, said: “This award is built on our long-standing relationship with Shell where we have a reputation for delivering high quality projects with an excellent safety record. This win provides significant opportunities for our local teams to continue their commitment to deliver the future of energy through process and operational improvements as we move closer to net-zero.”

Massy Wood’s 1,000-strong team based in Trinidad has supported Shell in Trinidad & Tobago since 2018. 

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Triple contract success marks Decom Engineering’s entry to Australian decommissioning sector

Decom Engineering (Decom) has strengthened its position in AsiaPac with the execution of three market entry Australian contracts worth in excess of £500,000.

The decommissioning specialist was commissioned to supply and operate its chopsaw cutting technologies on behalf of a major Operator in Victoria’s Bass Strait as well as contract awards from two other clients for scopes in Australian waters.

Decom performed three cuts on a 20’’ concrete weight coated carbon steel rigid pipeline and 25 cuts on a 13” in-filled flexible flow line jumper, with a 4.5’’ piggy back, using its C1-24 chopsaw at water depths of around 400m.

The C1-24 chopsaw was powered by a WROV using Decom-supplied hot stabs and only two blades were used throughout, showcasing the efficiencies and cost saving of the technology.

Another C1-24 chopsaw has recently been utilised on assets in Australia’s North West Shelf, operating at around 500m water depths.

The Australian decommissioning sector is viewed as a strategic market by the UKheadquartered company which has so far invested up £500,000 in establishing infrastructure and relocating equipment and personnel to be reactive to local market demands.

Decom Engineering managing director, Sean Conway, said: “The award of these three contracts by major operators is a clear signal that our commitment to the Australian decommissioning sector is being rewarded.

“With the extensive track-record Decom has established on projects in the UK North Sea, Africa and Asia, we judged that now was the right time for us to enter the Australian market and we are keen to be part of the sector’s journey to sustainability.”

In the wider AsiaPac market, Decom has invested upwards of £2 million to design and manufacture a nine-strong portfolio of chopsaws and supporting equipment, including control panels, spares and consumables, which have been used on successful projects throughout the region.

Sean Conway added: “We are excited to be kicking off three Australian projects in tandem and look forward to building a strong relationship with our customers. As our reputation grows, we will replicate our AsiaPac model by investing in facilities, equipment and personnel in Australia, to provide cutting edge technologies which will assist contractors and operators looking for cost effective and environmentally sound decommissioning solutions.”

In time, Decom also plans to introduce its Pipe Coating Removal (PCR) system to Australia to offer a full-service decommissioning option for redundant oil and gas steel pipes.

The fastest and greenest process on the market, the PCR strips steel tubulars of all coatings and transforms the pipe into a reusable product suitable for construction projects and other uses, while decreasing carbon footprint and returning value to the asset owner.

“To date our PCR system has processed more than 30,000 tonnes of steel tubulars from surplus prime and decommissioned oil and gas fields and we think that this is an offering which could introduce significant environmental and financial benefits to the massive Australian decommissioning sector,” said Conway. 

Examining the impact of decommissioned offshore structures

A new study suggests that decommissioned offshore structures offer limited long-term ecological benefits if they are simply left in the ocean to serve as artificial reefs.

Researchers carried out a comprehensive analysis of existing studies on the environmental impacts of marine offshore structures –including oil and gas platforms and offshore wind farms – worldwide.

It highlighted that such installations could offer some ecological benefits – including increasing the diversity and abundance of fish species – in areas where the seafloor is mostly comprised of sand.

However, there was limited conclusive evidence that oil and gas platforms and offshore wind farms could provide further substantial benefits if they are left in the sea after being decommissioned.

The research, ‘A global meta-analysis of ecological effects from offshore marine artificial structures,’ was published in Nature Sustainability.

Managing end-of-life structures

The study was carried out by researchers at the University of Plymouth, Plymouth Marine Laboratory and the Centre for Environment, Fisheries and Aquaculture Science (Cefas).

They analysed data from more than 530 scientific studies on the effects of marine artificial structures in the sea.

These ranged from oil and gas platforms and offshore wind farms established during the 20th and 21st centuries to accidental shipwrecks –some of which had lain on the seabed for over 400 years – and purpose-built artificial reefs.

In particular, the available evidence did not allow the researchers to draw clear conclusions on how offshore structures compare to natural rocky reefs – a key element in being able to determine whether they can function as artificial reefs.

As a result, they say more detailed investigations are needed into the best way to manage such structures at end-of-life, as repurposing them into artificial reefs may not provide the intended benefits.

Learning from past mistakes with new offshore structures

The research is particularly timely, with global governments and other agencies setting targets of achieving net-zero emissions by 2050 as part of their decarbonisation agendas, resulting in the decommissioning of existing offshore structures and the construction of thousands of new ones.

Dr Anaëlle Lemasson, Postdoctoral Research Fellow at the University of Plymouth and the study’s lead author, said: “Many of the structures we see in the ocean today were put in place at a time when environmental considerations weren’t in people’s minds.

“There were also no legal requirements covering possible environmental impacts or what might happen to these structures once they reached the end of their useful lives.

“That is certainly changing, and transitions away from fossil fuels mean it is vital we have this debate now.”

The research was carried out as part of the Decommissioning – Relative Effects of Alternative Management Strategies (DREAMS) project, a consortium of industry and academics looking at the ecological effects of manmade structures in the North Sea.

It uncovered a considerable amount of research looking at the impact of the offshore structures; however, very little research demonstrated the direct effects of decommissioning. 

Chevron Awards Decommissioning Contract to InterMoor

Chevron Corporation’s (CVX) subsidiary, Chevron Thailand Exploration and Production Ltd. (CTEP), awarded a decommissioning contract to InterMoor, an Acteon brand.

Post the successful completion of the decommissioning scope of work in the Gulf of Thailand in 2021, Chevron extended the contract by including additional packages for the disconnection and removal of pipelines.

The extended contract includes project management, engineering, procurement and offshore execution; disconnection and removal of pipelines; disconnection and removal of single point mooring (SPM) and corresponding subsea infrastructure; and topside modifications work. Much like the first phase, InterMoor will use cutting tools from its sister company, Claxton. UTEC intends to supply the survey spread and Aquatic will provide the equipment for recovering subsea umbilicals, risers and flowlines.

Zacks Rank & Key Picks: Currently, Chevron carries a Zack Rank #3 (Hold). Some better-ranked stocks for investors interested in the energy sector are CVR Energy CVI, Par Pacific Holdings Inc. PARR, each sporting a Zacks Rank #1 (Strong Buy) and Valero Energy Corporation VLO, carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1Rank stocks here.

CVR Energy, a diversified holding company with its main office in Sugar Land, TX, is an independent refiner and marketer of high value transportation fuels. Over the past seven days, CVI has seen an upward revision in earnings estimates for 2023.

Par Pacific, a growth-oriented company, combines knowledge of corporate financing with experience in the oil and gas sector. With 94,000 barrels per day of active refining capacity and a logistical system that includes an SPM, storage, barges, pipelines and trucking operations, PARR owns and manages one of Hawaii's biggest energy networks. Over the past 30 days, the company has witnessed an upward revision in earnings estimates for 2023 and 2024.

STATS & ANALYTICS

Offshore Field Development Update

The key highlight for O&G-related engineering, procurement and construction (EPC) contract award during the period under review is the integrated engineering, procurement, construction and installation (iEPCI) contract awarded to TechnipFMC for Shell’s Sparta development in the US Gulf of Mexico (GoM). TechnipFMC will manufacture and install the subsea production systems, umbilicals, risers and flowlines. In the lower GoM, Dril-Quip announced a contract award for the supply of subsea wellhead systems for Woodside Energy’s Trion development offshore Mexico.

Challenges around supply chain cost inflation continue to stifle offshore EPC contract awards. However, Westwood anticipates that 68 field FIDs will be announced for the remainder of 2024, of which only 30% are classed as ‘Firm’. Whilst EPC award value for the remainder of 2024 is forecast at approximately US$51 billion, uncertainties remain on the contracting timeline for FPSO demand from Petrobras, as the Brazilian NOC has failed to agree to commercial terms on some of its matured FPSO tenders, whilst it has also postponed bid submission deadlines for units such as the SEAP I and SEAP II FPSOs and the Barracuda/ Caratinga replacement FPSO, citing contractor’s difficulties in securing project financing. However, Seatrium is said to be in advanced negotiation with Petrobras for the manufacture and supply of the P-84 and P-85 FPSOs to be installed on the Atapu-2 and Sepia-2 fields in the Santos Basin offshore Brazil.

Outside Brazil, key FIDs anticipated for the remainder of 2024 include BP’s kaskida development in the US GoM, Eni’s Coral Phase II offshore Mozambique, ExxonMobil’s Whiptail (Guyana), Energean’s Katlan gas development offshore Israel, ADNOC’s Umm Shaif (LTDP-2) offshore UAE and QatarEnergy’s North Field South. Looking forward, Westwood forecasts c.250 subsea trees, c.3,500km of subsea umbilicals, risers and flowlines (SURF), c.3,400km of pipelines, c.120 fixed platforms and 20 FPS units (including FLNG units).

Offshore Drilling Rig Update

The global committed jackup count averaged 416 units in February. Marketed available and cold-stacked jackup counts now stand at 25 and 58 respectively, with marketed committed utilisation and total utilisation at 94% and 83% respectively. During the month, a total of 11 contracts were awarded, amounting to 2,713 days (7.4 rig years) of backlog added. Egypt’s GPC has awarded two, two-year extensions and a one-year extension to ADES jackups, with a total contract value of $120 million.

The global committed semisubmersible count stayed around 64, with 15 available and cold-stacked rigs remaining in the fleet. Marketed committed and total utilisation stayed at 81% and 68% during the month, respectively. Three contracts were awarded, including a letter of award for the Blackford Dolphin from Oil India on a 14-month drilling programme with expected commencement in 3Q 2024.

Finally, the global drillship count increased to 84 units during the month, leaving four marketed rigs available plus 13 cold-stacked units. Marketed committed and total utilisation rose to 96% and 83%, respectively. TotalEnergies has declared the remaining options for Tungsten Explorer to work in Congo through early 2025. The drillship is under a JV between the operator and Vantage, where TotalEnergies has a 75% ownership stake and will utilise the rig over 10 years in different countries.

Offshore Wind Update

Since the last update, the turbine contract for two Polish wind farms, MFW Baltyk 2 and MFW Baltyk 3, were finalised and signed. Siemens Gamesa has been contracted to design, supply, install and commission a total of 100 SG 14-236 DD turbines that will have an individual capacity of 14.4MW. The contract also includes maintenance and warranty services. The turbine foundation contract has also been finalised for these two wind farms, with Sif being contracted to supply 100 monopiles. Manufacturing is scheduled to commence in 2Q 2025, and this is due to be completed in 2026.

Dominating headlines was news that the 924MW Sunrise Wind and 810MW Empire Wind Phase 1 projects have been granted off-take agreements via New York state's fourth offshore wind solicitation round. The agreements are conditional on successful contract execution. Furthermore, the 1.3GW Community Offshore Wind 2 project has been "waitlisted" and might undergo evaluation for potential award and contract negotiation at a subsequent date.

Finally, several offshore wind lease rounds have been launched in Europe in the past month. These include the 4.5GW Celtic Sea floating wind lease round in the UK, the GW IJmuiden Ver offshore wind tender in the Netherlands and a 5.5GW lease auction for three sites in Germany. 

STATS & ANALYTICS

PROVIDED BY

Westwood Global Energy Group are specialist providers of detailed market intelligence for the offshore energy sector, covering; offshore rigs, production facilities, subsea equipment, subsea services, offshore marine and offshore renewables and power.

www.westwoodenergy.com

SolarEX 2024

04-06 April 2024

Istanbul, Turkey

RNG Forum

10 April 2024

Approaching the environmental impact of travel within the decommissioning process

Drummondville, Canada

Energy Tech Summit

10-11 April

Bilbao, Spain

World Future Energy Summit

16-18 April

Abu Dhabi, UAE

Pulse

17-18 April

Madrid, Spain

26th World Energy Congress

22-25 April 2024

Rotterdam, Netherlands

World lng & Gas Series: Asia Pacific Summit

23-25 April 2024

Kuala Lumpur, Malaysia

Solar & Storage Live UK 2024

1-2 May

Birmingham, UK

IEEE PES Transmission & Distribution Conference & Exposition

6-9 May 2024, Chicago, USA

Saudi Plastics & Petrochem

6 May 2024

Riyadh, Saudi Arabia

Offshore Technology Conference

6 May 2024

Houston, USA

Thedecommissioning and repurposing of existing oil and gas assets is a rapidly growing market. With the billion-pound industry becoming more prevalent year on year, the focus on environmental impact has become a focal point across the industry.

The process of decommissioning is not without environmental risks and comes with its own GHG footprint, such as water pollution, waste disposal and extensive travel logistics to complete the project, mitigating the impact is a key focus for many businesses.

The travel logistics of these projects alone are significant, and in an environment of growing sustainable reporting directives, in need of addressing. Finding a partner, who can offer reduction solutions, as well offset solutions to compensate for the unavoidable carbon footprint of travel logistics is increasingly important. By working with a partner such as ATPI Halo, decommissioning projects can use the measure> reduce> compensate methodology, helping them to commit to sustainability and cost targets, inline with their organisations’ goals for truly sustainable travel, irradicating the stress of environmental impact from shift rotations. Where reducing rotational travel may not be possible, purchasing Sustainable Aviation Fuel (SAF) through ATPI Halo can be solution to

achieve a percentage of immediate in-sector CO2e emissions reduction. For the residual footprint ATPI Halo’s portfolio of carbon offset projects are selected for their quality, integrity, and effectiveness in addressing global challenges of environmental impact management. Correlation with the UN’s 17 Sustainable Development Goals (SDGs) ensures a balance of the three dimensions of sustainable development: economic, social, and environmental.

ATPI has a legacy of supporting the energy community with its travel requirements. Complex logistics are something our consultants deal with on a daily basis. Over the years we have built up a great deal of experience at both an operational level, as well as understanding how important data is when reviewing these logistics, from a cost, Duty of Care/Well-being and sustainability/ carbon reporting perspective. The data we gather during the booking process is critical to our clients when meeting environmental directives and completing audits, ensuring compliance is at the forefront of everything that ATPI Halo does.

As decommissioning progresses, be that the closure and break-up of projects and assets, or even preparing them for a potential new future in the carbon storage sector, ATPI will be ready to support. 