Hat-trick combo for next generation decommissioning operations
Article taken from the Petroleum Review. The original article can also be downloaded.
Three leaders in the oil and gas decommissioning sector launched a new company, Fairfield Decom, in June 2019, to provide an end-to-end solution for P&A, salvage and disposal of ageing oil and gas assets.
Fairfield Energy is a subsidiary of Decom Energy, who is one of the partners in Fairfield Decom, which is well advanced in decommissioning of the Greater Dunlin field (including Dunlin, Osprey and the Merlin subsea satellite fields and infrastructure), with Dutch marine contractor Heerema and specialist Norwegian offshore removal and recycling contractor AF Offshore Decom.
The combined venture claims to be the first fully outsourced, end-to-end, late-life decommissioning operator in the North Sea. ‘The three companies have unrivalled experience in decommissioning and there is great alignment in terms of our responsible approach to business and core values,’ said Graeme Fergusson, Managing Director of Fairfield Decom.
The company is initially targeting the UKCS, which has the largest decommissioning market globally, with a projected expenditure of £15.3bn over the next decade. ‘We have had some very encouraging conversations with operators looking to outsource their decommissioning operations to a company like ours,’ said Fergusson.
‘We’ve taken the bold step to create a company to handle full end-to-end decommissioning projects of significant scale. This is a global opportunity – but for the time being we are focused on the UKCS.’
So, how does he see the key lessons learnt on Dunlin?
‘Expect the unexpected. Planning is key. We arrived at Dunlin COP very quickly and unexpectedly, when the oil price fell. There were many technical issues and the wells have involved huge learning. We tried to create an “agricultural process” around the wells, harvesting new knowledge as it was gained.’
Continuous improvement is key. However, the biggest lesson has been about organisations and led to the creation of Fairfield Decom. ‘Taking on the decommissioning challenge in the traditional capex mindset doesn’t work for [this sector],’ insisted Fergusson. ‘The frustration of three companies operating in isolated boxes meant much value is lost if you can’t integrate those parties closely. Thinking about that led us to combine forces and put all of our skills in decommissioning and our value chain in one entity, so you can break through barriers as one integrated entity – that creates a lot of value and saves a lot of costs.’
Fairfield Decom Commercial Director Ronald van Waaijen added: ‘The first thing we tried to stop was the traditional contractor/client relationship, which is confrontational. Our approach is smarter and trust-based.’ The team is also relatively small, with a footprint of 10-15 in Fairfield Decom, with further personnel available from Fairfield Energy, as well as a vast skill-base in Heerema and AF Gruppen. Interestingly, Fergusson doesn’t expect decommissioning to become a huge job creator. ‘Success will be defined by the North Sea having efficient decommissioning through a number of models like ours. But there’s only the demand for a handful of companies.’
As for new technology, ‘from a wells perspective there is exciting technology out there, but it’s yet to be proven,’ commented Fergusson. ‘Dunlin started its well campaign in 2016. We trialled a number of different technologies, none of which gave us the confidence as a responsible operator to use it for our wells. So Dunlin has been a relatively conventional P&A campaign. We have used good technology for the subsea wells that we removed. But Dunlin has not been the opportunity to demonstrate game-changing technology, like thermite plugs, bismuth plugs etc.’
However, according to van Waaijen: ‘Digitalisation is important, and as a new start-up company, it’s fairly easy to implement.’ What’s more, Heerema is to install the first lift with its new 20,000 tonne Sleipnir vessel, which offers a lot of sustainability, powered by LNG. Heerema also has a simulation centre in The Netherlands, where it can practice on decommissioning projects virtually and benefit from lessons learnt in a safe environment.’
So, what’s the main barrier to success? Fergusson maintained: ‘Lack of quality records and data is a major issue for decommissioning operations. That’s why starting early is key to efficient decommissioning.’