Oil & Gas UK Decommissioning Insight 2014

DECOMMISSIONING INSIGHT 2014

Historical Variation in Well Plugging and Abandonment Cost Forecasts in the Southern North Sea and Irish Sea

The cost of well P&A is significantly lower in the SNS and IS than in the CNS and NNS areas. This is due to the fact that well P&A completions are often simpler as the more benign fluids in these regions cause fewer problems of corrosion. As seen in Figure 8, platform well P&A in the SNS and IS is cheaper to perform and shows the smallest variation in cost estimates. Figure 8: Historical Variation in Well Plugging and Abandonment Cost Forecasts in the Southern North Sea and Irish Sea (2011 to 2014 Surveys)

10 12 14 16

0 2 4 6 8

Estimated Cost (£ Million)

2011 2012 2013 2014

2011 2012 2013 2014

2011 2012 2013 2014

Platform

E&A

Subsea Development

Average Forecast Cost Platform Well

Average Forecast Cost Suspended E&A Well

Average Forecast Cost Subsea Development Well

Range in Cost Forecasts

Source: Oil & Gas UK

Well P&A

2013 Average £3.5 million £4.8 million £6.9 million

2014 Average £2.7 million

Platform wells

Subsea E&A wells

£5 million £7.6 million

Subsea development wells

The average and range in subsea well P&A forecasts have increased slightly since the 2013 survey, although the overall variation in cost is much less than that in the CNS and NNS. While the higher end of the range in costs are only reported by a small number of wells, these higher cost forecasts are reported by more than one operator.

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