DECOMMISSIONING, IDLE IRON, AND RIGS TO REEFS PATH FORWARD
APACHE GOM SHELF REGION GOM Shelf Operations 629 Operated Platforms 199 Caissons / 430 Major 130 Manned / 499 Unmanned
Gulfport
LOUISIANA
1,012 Producing Wells
Lafayette New Orleans
HOUSTON
TEXAS
Corpus Christi
Gross Operated Daily Production
Gulf of Mexico
Net Shelf Acres 1,705,563 ac APA Leases GOM Shelf 1Qtr 4-2-13
Sale 227 Preliminary APA High Bid
Offshore 410 MMcfd + 67,500 Bopd
Total Net Daily Production Gas Oil NGL
310 MMcf/d 47,000 Bopd 5,400 Blpd
APACHE DECOMMISSIONING SCOPE OF WORK GOM Decommissioning History & Projections 300
Wells P&A'd Pipelines Abandoned
Platforms Removed
250 200 150 100 50 0 2005 GOM Shelf 1Qtr 4-2-13
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
WHAT IMPACT HAS THE IDLE IRON PROGRAM HAD ON APACHE? ď ş
Apache has run an aggressive decommissioning campaign since Hurricanes Katrina and Rita of 2005, so the Idle Iron NTL of 2010 has had a limited impact.
WHY DOES APACHE SUPPORT THE RIGS-TO-REEFS PROGRAM?
Win-Win for the Environment, Recreational and Commercial Fisherman, Divers, Government and Industry 58 Platforms Donated to Date
21 Texas 33 Louisiana 4 Mississippi
14 Platform Currently in R2R Permitting Process 19 More Platforms Soon to Submit R2R Permits
INDUSTRY RIGS-TO-REEFS STATISTICS - 2012 WD (ft)
0 – 100
# Platforms Remaining
# Platforms Removed
# Platforms Reefed in LA
# Platforms Reefed in TX
Source Count Reef Count
Source Count Reef Count
11/15
<1% Reefed
11/15
2,018
3,066
101 – 200
524
764
126/159
22% Reefed
45/58
201 – 300
236
252
97/132
57% Reefed
46/70
301 – 400
83
50
32/37
2/2
401 – 500
23
8
6/8
1/1
501 – 600
5
2
2/4
601 – 700
9
2
2/4
701 – 800
7
0
0
0
801 – 900
1
0
0
0
901 - 1,500+
9
0
0
0
2,915
4,144
276
105
Total Decom / EFH 3-4-2013
73% Reefed in WD > 300'
0 0
THREE QUESTIONS FROM THE FISHERMAN
Why can’t we reef platforms in very shallow water close to shore? Why not place a moratorium on platform removals? Why not leave all platforms standing in place above water?
Decom / EFH 3-4-2013
JACKET upright in 40 Feet Water Depth
40’-0”
Sea Level @ Elev. 0’-0” 1 8
Mudline @ Elev. (-) 40’-0” 50’-0”
40’-0”
Sea Level @ Elev. 0’-0”
Mudline @ Elev. (-) 40’-0”
50’-0”
1
4
10’-0”
JACKET toppled in 40 Feet Water Depth
JACKET upright in 150 Feet Water Depth 40’-0”
Sea Level @ Elev. 0’-0”
1 8
Mudline @ Elev. (-) 150’-0” 78’-0”
JACKET toppled in 150 Feet Water Depth
Mudline @ Elev. (-) 150’-0”
78’-0”
40’-0”
1
4
72’-0”
Sea Level @ Elev. 0’-0”
WHY DON’T WE WANT A MORATORIUM?
We have a legal obligation to remove platforms at the end of their useful life
We are committed to staying in compliance with the law
Many platforms are already feeling the effects of years of corrosion and fatigue and need to be removed
Moratorium extends maintenance costs and hurricane risk beyond the profitable life of platforms
Decom / EFH 3-4-2013
WHY CAN’T PLATFORMS JUST STAY IN PLACE ABOVE WATER?
The Physical Realities
Corrosion (rust never sleeps)
Fatigue vs. design life (a pop top on steroids)
Limitations of original design of older platforms vs. hurricanes
They won’t last above water
But they will last as underwater reefs for a very long time The
example is ancient shipwrecks
Below
Decom / EFH 3-4-2013
the wave zone and away from oxygenated water
EXAMPLE OF PLATFORM ABANDONED IN PLACE BY A BANKRUPT OPERATOR
Decom / EFH 3-4-2013
WHY CAN’T PLATFORMS JUST STAY IN PLACE ABOVE WATER?
The Economic Realities
Risk to navigation if unmaintained
Maintenance costs > $ 250,000 per year each
Hurricanes – 10x to 15x removal cost
No source of revenue to pay the costs and take the hurricane risks for idle platforms
Future liability not resolved
But there is very little maintenance cost and minimal risk to a properly reefed platform
Decom / EFH 3-4-2013
SO HOW CAN WE CREATE MORE REEFS?
Cameron
Intracoastal City Fourchon
Venice
Harbor Island
Texas Reef Planning Area Texas Reef Sites Louisiana Reef Planning Areas
GOM Shelf 1Qtr 4-2-13
HOW CAN WE CREATE MORE REEFS?
Streamline the Rigs-to-Reefs permitting process
BSEE is working on that now per 2/21/13 workshop
BSEE says our back logged rigs-to-reefs permits are coming
Open more reef planning areas
Two recently approved offshore Texas
Establish a broad network of reef sites
GOM Shelf 1Qtr 4-2-13
36 mile tow is break even economics vs salvage
HOW CAN WE CREATE MORE REEFS?
Develop a sliding scale water cover requirement based on water depth
Reestablish the SARS program
USCG now says evaluation to be done on case by case basis
BSEE said yes during 2/21/13 workshop
Maintain reef donation to the state in exchange for the state taking liability for the reef
GOM Shelf 1Qtr 4-2-13
BACK UP SLIDES
19
PLATFORM INSTALLATIONS 11/2011 and REMOVALS 2012
Decom / EFH 3-4-2013
RED SNAPPER OCCURRENCES Northern Gulf of Mexico
Decom / EFH 3-4-2013
TYPICAL OFFSHORE PLATFORM
Helideck Main Deck
Wellhead Well Conductor Boat Landing
Cellar Deck
Deck
Deck Leg Top of Jacket
Jacket Leg
Jacket Jacket Bracing Mudline Pile
Piles Reservoir
Not a Real Hurricane Wave
A Real Hurricane Wave
JACKET upright in 100 Feet Water Depth
40’-0”
Sea Level @ Elev. 0’-0”
1 8
Mudline @ Elev. (-) 100’-0” 65’-0”
JACKET toppled in 100 Feet Water Depth
Mudline @ Elev. (-) 100’-0”
65’-0”
40’-0”
1
4
35’-0”
Sea Level @ Elev. 0’-0”
JACKET upright in 200 Feet Water Depth
40’-0”
Sea Level @ Elev. 0’-0”
1 8
Mudline @ Elev. (-) 200’-0”
90’-0”
JACKET toppled in 200 Feet Water Depth
40’-0”
90’-0”
1
4
110’-0”
Sea Level @ Elev. 0’-0”
Mudline @ Elev. (-) 200’-0”
WHAT ABOUT EXPLOSIVE USE OFFSHORE?
Explosive use is tightly controlled under the Marin Mammal Protection Act.
29 29
Two NMFS observers are required at all explosive platform removals. We provide helicopter service for them to monitor for sea turtles, porpoises, etc. They generally monitor from surface for 2 hours in advance and from helicopters for 1 hour in advance. They perform a post detonation aeriel survey for 30 minutes.
DOES ANYONE OPPOSE THE REEFING PROGRAM?
The shrimpers don’t like anything that obstructs “trawlable bottoms”. But it is difficult to understand their opposition
30 30
Approximately 90% of platforms have been completely removed so far with the sites cleared for future trawling The remaining 10% of platforms that are being reefed are being concentrated in a few select sites So we are reopening many areas to the shrimpers