Report on industry consultation

Courtesy Aker Solutions Report on industry consultation North Sea Decommissioning Supply Chain Steering Group Courtesy Peterson SBS April 2009 No...
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Courtesy Aker Solutions

Report on industry consultation North Sea Decommissioning Supply Chain Steering Group

Courtesy Peterson SBS

April 2009

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

A message from the First Minister

It is vital that we do everything we possibly can to help our offshore contractors and supply companies work together, and support them to become thoroughly prepared and equipped to claim their share of the new North Sea decommissioning opportunities. I commend the establishment of Decom North Sea and its vision to create a true North Sea alliance of like-minded European supply-chain companies.

Alex Salmond First Minister of Scotland

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North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

Foreword

The prospect of imminent North Sea decommissioning often simultaneously provokes two differing reactions:– enthusiasm at the prospect for Scottish businesses to add yet another globally marketable discipline to their offshore portfolio, but also uncertainty – or more accurately, a number of uncertainties - over timing, seasonality, areas of technical inexperience, the influence of oil price fluctuations, contracting strategies and many other factors. After some years of reporting on decommissioning market opportunities, in early 2008 Scottish Enterprise decided to confront these underpinning issues by setting up a unique industry-wide consultation exercise to explore and capture the aspirations and inhibitions of the North Sea decommissioning supply chain. This Steering Group brought together some of the most knowledgeable and influential people in the industry, and they gave generously of their time and expertise – in particular to highlight where early actions could be productive, and where long-term issues called for further study. For their invaluable input into this challenging process – and in particular the spirit of openness and cooperation in which it was offered - I convey our grateful appreciation. Although this stage of the exercise is now complete, and summarised in these pages, we have, I believe, along the way established, even in a short space of time, a genuine community across the UK, Dutch, Danish and Norwegian decommissioning sectors which bodes well for future collaboration.

Brian Nixon Director Scottish Enterprise Energy Team

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April 2009

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

Contents

1.

Background ............................................................................. 5

2.

Executive summary................................................................. 6

3.

Market overview ...................................................................... 8

4.

The Steering Group............................................................... 12

5.

The consultation process ..................................................... 14

6.

Consultation outcomes......................................................... 17

Appendix 1 - Consultation participants Appendix 2 – Consultation questionnaire Appendix 3 – Market breakdown study Appendix 4 – Decommissioning supply chain capability matrix Appendix 5 – Outputs from innovation workshops Appendix 6 – Decom North Sea outline business plan

Project development and management

Fiona Ann Ogilvie, Scottish Enterprise Energy Team

Project partners:

Highlands and Islands Enterprise The Department of Energy and Climate Change

Report production:

John Malcolm, JDM Marketing Ltd

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April 2009

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

1.

Background

The North Sea’s mature offshore oil and gas industry is approaching a new phase in its operations during which it will be necessary to decommission some of its installations, many of which have been producing oil and gas for over 30 years. Over the next two decades, the process of decommissioning the ageing offshore oil and gas producing infrastructure will begin in earnest. However, the actual timing of this process is currently uncertain, thanks to fluctuating oil prices, increasing global energy demand, a shortage of human resources and an acknowledged, and understandable, lack of decommissioning expertise, seasonality of activity and other factors. The North Sea facilities which will eventually be decommissioned will include small and large steel platforms, subsea wells and floating equipment. The changing face of the North Sea: NW Hutton then (below) and now (Images courtesy BP)

This will be a complex process which will take place in a hostile offshore environment and it will challenge the industry on many fronts – technological, economic, environmental and health and safety. Around 470 installations, 10,000 kilometres of pipelines, 15 onshore terminals and around 5,000 wells constitute part of the infrastructure that will eventually need to be decommissioned. Current total costs for decommissioning the UK Continental Shelf (UKCS) are estimated at £20-25 billion. In June 2007, a Decommissioning Supply Chain Steering Group was established consisting of government agencies, key industry players, operating companies and industry associations. In 2008, this Steering Group embarked on a wide-ranging industry consultation to help develop an understanding of the key focus areas of weakness and bottlenecks which currently inhibit UK supply chain capability development, and to ascertain how, where and when government intervention should be targeted to overcome such barriers. The work of the Steering Group concluded in March 2009. It has been a valuable exercise which will help us plan for the future.

“For the North Sea decommissioning supply chain, doing nothing is simply not an option. We need to mobilise now if we are going to respond effectively and profitably to the new opportunities coming our way.” Murdo MacIver Peterson SBS Ltd

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April 2009

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

2.

Executive summary

In March 2008, Scottish Enterprise led the establishment of a Steering Group set up to assess the capability and market-readiness of the supply chain for the North Sea offshore decommissioning market. Participants

The Steering Group comprised wide-ranging representatives from oil and gas operating companies, independent operating companies, offshore and subsea contractors, service providers, decommissioning consultants, other energy industry organisations, the nuclear industry, government departments and economic development agencies. The Steering Group was set up to study some of the challenges, bottlenecks and issues inhibiting supply chain development, as well as looking at ways in which these could be overcome and estimating what levels and types of market support would be required.

Key issues

Key issues were identified calling for early support action, including recognising the importance of efficiently diffusing decommissioning knowhow across the UK supply chain to counter early market advantages gained by dominant foreign contractors. Other issues identified as requiring action were; developing segmentation studies to match capability profiles of contractors and service providers with required decommissioning competencies; producing ongoing market opportunity reports and foresighting studies; and organising structured ideas generation sessions to explore new and innovative ways to reduce the costs of decommissioning.

New forum

One recurring theme, however, was the requirement for an industry forum to unify the disparate clusters of bodies and initiatives in the North Sea decommissioning market, and bring clarity and commonality to an emerging and currently disjointed sector of the offshore oil and gas industry.

Courtesy Subsea 7

Courtesy Aker Solutions

Page 6 of 19

April 2009

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

Courtesy Peterson SBS

This widely-perceived need for a new, independent, industry-led decommissioning forum aimed to maximise the new business opportunities of this market, and develop productive cost-efficient decommissioning strategies to benefit the overall industry. To confirm the demand for such an industry association, in December 2008 the Decommissioning Supply Chain Steering Group delegated a small working group to make further consultation with the industry on the concept of a decommissioning supply chain forum, and to examine the operational feasibility of such an organisation. From the responses received to date (March 2009), there has been almost unanimous support both for the concept of a dedicated North Sea decommissioning forum and for opportunities to network with other companies on potentially collaborative decommissioning projects. The working group proposed that a new industry forum should be set up as a not-for-profit company limited by guarantee, funded jointly by industry (on a subscription basis) and by government for its first two years of operation. This proposal was unanimously endorsed at the final Steering Group meeting in Bergen on 9 February 2009. Decom North Sea

The proposed name of the new industry organisation is Decom North Sea, having as its principal aims: 

to develop and establish a competitive North Sea decommissioning supply-chain



to respond to economic, technological and strategic challenges facing the North Sea decommissioning supply chain



to initiate and deliver strategic action plans, market research and coordinated activities in support of the whole North Sea decommissioning industry

The scope of the operational activities of Decom North Sea will be clearly defined at all stages to complement and enhance the work of other decommissioning organisations and work groups. The “North Sea” element in its title is deliberately included to emphasise the organisation’s focus beyond UK markets to include the Norwegian, Danish and Dutch decommissioning sectors.

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North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

3.

Market overview

“Decommissioning is a relatively new business in the North Sea, and operators and contractors need to work together in partnership to ensure lessons are effectively transferred and risks are minimised. Now is the time to build this relationship and face the challenges together.” Gunther Newcombe BP North Sea Decommissioning Manager

Projected values

Projections of the overall cost of decommissioning in the UKCS vary from around £10 billion to £25 billion, with the main variables being: 

The inclusion or exclusion of wells and pipelines



The level of removal and final status for pipelines



Cost estimation methods

The North Sea comprises the UK Continental Shelf (UKCS), the Norwegian Continental Shelf (NCS) and the Dutch Continental Shelf (DCS), and in total hosts almost 600 offshore platforms of which 54% are more than 15 years old. The average age of the decommissioned platforms in the North Sea to date is 17 years, confirming that decommissioning will become an increasingly significant issue in the region over the next decade. The UKCS growth 2008-12 will be driven by the execution of four major projects over this period – Frigg, Miller, Indefatigable, and North West Hutton. During the same period, further major decommissioning expenditure is expected to be made on floating platforms and subsea wells, with the decommissioning of BP’s Don subsea wells being a project of note.

Courtesy Design Alpha

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North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

A recent report commissioned by Oil & Gas UK has confirmed the additional market potential of well abandonment, estimating that 3,725 platform wells and 910 subsea wells in the UKCS will need to be abandoned, the majority in the next 15 years, at an estimated cost of around £15 billion.

Well abandonment

Existing technology will permit the rigless abandonment of two thirds of these wells, a method which is typically more cost effective than using a rig. However, the rigless abandonment of the remaining one third of wells will require the advancement of techniques such as well control and string tubular recovery. In the North Sea there are almost 600 platforms, of four main types: 

45

377 small steel platforms (combined jacket and topside weight under 4,000 tonnes) – representing 68% of the installed base of North Sea platforms

24



106 large steel platforms (combined jacket and topside weight over 4,000 tonnes) – including around 70 with a total weight of over 20,000 tonnes



24 large concrete gravity base structures with substructures between 150,00 and 350,000 tonnes (including three Norwegian structures over 600,000 tonnes)



45 floating platforms

106 Concrete Platforms Large Steel Platforms Small Steel Platforms Floating Platforms

377

Courtesy BP

Courtesy Peterson SBS

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April 2009

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

Market segmentation

Ongoing market segmentation studies being carried out by Scottish Enterprise have identified at least 200 UK contractors and service companies with current core capabilities which are compatible with generic decommissioning activities. A detailed study matching these competencies against market segmentation requirements is now underway. Another important supporting study commissioned by Scottish Enterprise is “The decommissioning breakdown structure” produced in November 2008 by Norwegian decommissioning consultants Design Alpha AS (see appendix 3).

Courtesy Aker Solutions

This in-depth study defines the core components of the various tiers of the decommissioning process, before presenting detailed analyses of the technology, competence and resources required for each individual segment of the market.

As the UK decommissioning supply chain takes stock of its disposal base capability, it is instructive to examine the relationship between tonnage of decommissioned installations and actual base capacity, drawing on the Norwegian model. Onshore disposal yards

In the late-1990s, a number of studies were conducted to estimate to what extent new Norwegian disposal yard facilities were required to service anticipated decommissioning demand. The reports concluded that, contrary to initial expectations, there was in fact little need for a chain of small, local yards, and history to date has confirmed that judgment. Over the twelve years since 1995, 250,000 tonnes of installations have been brought onshore in Norway for decommissioning. The bulk of this onshore disposal has been handled by market leader Aker Solutions at its Stord yard, which alone has an annual capacity of between 50,000 and 60,000 tonnes. The immediate next phase (from 2009) of North Sea decommissioning comprises three installations – Ekofisk, Inde and NW Hutton – with an anticipated total tonnage of 160,000 tonnes for onshore disposal over eight years.

Courtesy Peterson SBS

Page 10 of 19

Even allowing for the intermittent nature of disposal, there are already four existing yards (in Shetland - at Teeside - and two in Norway) with a combined capacity of between 120,000 and 150,000 tonnes per year.

April 2009

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

As Kare Kristing, former Decommissioning Director UK with Aker Solutions notes, – “Apart from the exception of natural deepwater disposal yards – for which there may turn out to be significant specialist demand – existing North Sea disposal yard capacities would appear at this stage to be adequate to handle the next phase of decommissioning.”

Courtesy Aker Solutions

By their nature, onshore disposal yards are highly visible symbols of effective involvement in the decommissioning supply chain, and it is entirely understandable that regional economic development authorities should want to ensure a “piece of the action”.

But the Norwegian experience warns of the possibility of developing yard over-capacity without the effective strategic assessment of actual demand.

Courtesy Subsea 7

“The decommissioning phase of North Sea oil and gas is likely to differ quite significantly from anything that has gone before – new commercial drivers, fresh technological challenges and a highly responsive supply chain will be required if we are to prevent the costs of this operation rising to unacceptable levels. The cost of this work will be shared by government and therefore we have a duty to assist in the creation of a competitive market.” Bill Cattanach Head of Pilot Secretariat Department for Business Enterprise and Regulatory Reform

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North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

4.

The Steering Group

“An industry-led supply chain body which effectively coordinates the alignment of its services with the operational strategies of the other decommissioning organisations will play a vital role in establishing the international capability – and long-term competitiveness - of the North Sea decommissioning sector.” Norman McLennan Supply Chain Manager, Oil & Gas UK

In March 2008, Scottish Enterprise led the establishment of a Steering Group set up to assess the capability and market-readiness of the supply chain for the North Sea offshore decommissioning market. The Steering Group comprised wide-ranging representatives from oil and gas operating companies, independent operating companies, offshore and subsea contractors, service providers, decommissioning consultants, other energy industry organisations, the nuclear industry, government departments and economic development agencies (see participant lists in Appendix 1 ). In recent years, the Scottish Enterprise Energy Team has commissioned and published three North Sea Decommissioning market reports (in 2002, 2005 and 2008). The Steering Group was set up to study some of the challenges, bottlenecks and issues inhibiting supply chain development which were identified in these, and other decommissioning studies, as well as looking at ways in which these could be overcome and estimating what levels and types of market support would be required. Consultation brief

To achieve this goal, the Decommissioning Supply Chain Steering Group was tasked with consulting potential, intending and active participants in this market to identify the main challenges they faced and the barriers which would have to be overcome to enable successful market entry. With the coordinated support of Scottish Enterprise, the UK government’s Department of Energy and Climate Change (DECC) and Highlands and Islands Enterprise (HIE), the Steering Group proposed running four one-day

Courtesy Peterson SBS

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North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

regional consultation and workshop events (see section 5) in locations with recognised decommissioning supply chain interests – Aberdeen, Stavanger, Lerwick and Bergen. The Steering Group made a strong recommendation to view the North Sea decommissioning market from a single-market, rather than a strictly UKfocused perspective, following successful early examples of integrated Norwegian/UK decommissioning activities, and the potential of this approach. Scope of study

Among the major areas for discussion and study were the following: 

The big issues influencing the pace and direction of North Sea decommissioning



What the supply chain can do to tackle those issues



Segmentation of key areas of the decommissioning market to align with current and potential supply chain capabilities (See Appendix 4)



Developing a shared view on the construct of the decommissioning value chain



The need for an industry-led forum to unify the fragmented supply chain and increase business opportunities for its members

Courtesy Saipem

The facilitators and discussion leaders during the consultation phase were: 

Brian Nixon, Scottish Enterprise Energy Team



Fiona Ogilvie, Scottish Enterprise Energy Team



Alastair Gray, Genesis Consulting



Richard Cockburn, Shepherd and Wedderburn



Ross Caven, Russell Macleod Ltd



Kare Kristing, Design Alpha AS

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April 2009

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

5.

The consultation process

“A North Sea Decommissioning Forum is something that is definitely required. Due to the limitations imposed by the general dearth of experience in this field, it is imperative that the decommissioning experience gained over the coming years is transferred down the supply chain.” George Cooper Bibby Offshore

The work of the Decommissioning Supply Chain Steering Group was essentially an intensive industry consultation programme carried out between June 2008 and February 2009. This consultation process consistently identified a number of recurring key issues of concern to participants, and potential participants, in the North Sea decommissioning supply chain. Each workshop was chaired by an independent facilitator, and wide-ranging issues were covered regarding the challenges, opportunities and possible structure of the future North Sea decommissioning supply chain. Long-term issues

A number of these issues were discussed and noted for future study, viz: 

the “certainty of uncertainty” – when will mainstream North Sea decommissioning actually happen?



The contracting process – its openness, transparency and fairness



DECC rules and regulations



The influence of oil and gas price fluctuations



Support for enhanced UKCS oil recovery



The cost of abandoning wells

Courtesy Saipem

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April 2009

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

It was also noted that the seasonality of decommissioning activities needed to be addressed. Offshore decommissioning, it was stressed, is a fairweather business and is unlikely to provide guaranteed year-round activity for contractors or service providers: it therefore generally calls for integration into other, less weather-dependent, activities. Other issues called for, and received, early support action, most notably the following:

New industry forum



The requirement for segmentation studies to match capability profiles of contractors and service providers with required decommissioning competencies (See Appendix 4)



Ongoing market opportunity reports and foresighting studies



The opportunity to organise structured ideas generation sessions to explore new and innovative ways to reduce the costs of decommissioning (See Appendix 5)

One recurring theme, however, was the requirement for an industry forum to unify the disparate clusters of bodies and initiatives in the North Sea decommissioning market, and bring clarity and commonality to an emerging and currently disjointed sector of the offshore oil and gas industry. This widely-perceived need for a new, independent, industry-led decommissioning forum aimed to maximise the new business opportunities of this market and develop cost-efficient decommissioning strategies to benefit the overall industry. To confirm the demand for such an industry association, in December 2008, the Decommissioning Supply Chain Steering Group delegated a small working group to make further consultation with the industry on the concept of a decommissioning supply chain forum, and to examine the operational feasibility of such an organisation. This working group supplemented the consultation workshops with an emailed questionnaire (see Appendix 2) issued to a wider audience of potential participants in the new organisation.

Courtesy Aker Solutions

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April 2009

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

From the responses received to date (March 2009), there has been almost unanimous support both for the concept of a dedicated North Sea decommissioning forum and for opportunities to network with other companies on potentially collaborative decommissioning projects. The majority of questionnaire responses also confirm the importance of other recurring issues: 

perceptions that information about North Sea decommissioning projects is inaccessible



a general lack of awareness of the supply-chain capability



a widespread lack of understanding of the many issues which influence and drive the North Sea decommissioning market



contracting strategies



grouping of assets/projects

Courtesy BP

“North Sea decommissioning offers significant new business potential to proactive contractors and service companies in the Highlands and Islands. HIE plans to work closely with the supply chain to ensure our local decommissioning capabilities are market-ready and responsive, including supporting the new decommissioning supply chain forum.” Katrina Wiseman Highlands and Islands Enterprise

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North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

6.

Consultation outcomes

“The nuclear industry decommissioning model shows us that, with strong collaborative focus, decommissioning projects can effectively be re-packaged – by nature, location, risk profile or other criteria – to optimise economic and technical benefits.” Simon Coles PFR Decommissioning Manager, Dounreay

The working group proposed that a new industry forum should be set up as a not-for-profit company limited by guarantee, funded jointly by industry (on a subscription basis) and by government for its first two years of operation. Decom North Sea

The proposed name for the organisation is North Sea Decommissioning Forum Ltd, trading as “Decom North Sea”, having as its principal aims: 

to develop and promote North Sea decommissioning supply-chain capability



to respond to economic, technological and strategic challenges facing the North Sea decommissioning supply chain



to initiate and deliver strategic action plans, market research and coordinated activities in support of the whole North Sea decommissioning industry

The scope of the operational activities of Decom North Sea will be clearly defined at all stages to complement and enhance the work of other decommissioning organisations and work groups. The “North Sea” element in its title is deliberately included to emphasise the organisation’s focus beyond UK markets to include the Norwegian, Danish and Dutch decommissioning sectors.

Courtesy BP

Page 17 of 19

April 2009

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

Bringing together the supply chain in this way in a cohesive format will increase the pace of innovation, increase competition in the supply chain and work towards the goal of driving down the costs of North Sea decommissioning, as well as enhancing the international competitiveness of the UK decommissioning sector in the global market. Decom North Sea will provide an effective forum for collaboration, diversification, innovation and coordinated global marketing of the North Sea’s decommissioning capability in an industry which currently consists of disjointed groups and initiatives. Early objectives

Early objectives will include: 

Promotion of North Sea decommissioning supply-chain capability at local, national and international levels



Unified representation of members’ interests at all levels of government and industry



Production and promotion of a strong group identity to support members’ marketing



Set up working groups to respond to technological and strategic challenges



Provide an effective first point of contact for enquiries about operating in the North Sea decommissioning market



Work in conjunction with government agencies and industry associations to define effective strategies for the development of the North Sea decommissioning supply chain



Deliver cost-efficient and coordinated support to enable the supply chain to achieve its strategic objectives



Develop and deliver an effective events programme including market intelligence seminars, business mentoring workshops, promotional events and networking opportunities



Develop a strategic plan for a sustainable, internationally-competitive North Sea decommissioning supply chain

Courtesy Aker Solutions

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North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

Based on the example of the Nuclear Decommissioning Authority, further long-term objectives of Decom North Sea may extend to:

Other outcomes



Improved focus on decommissioning implementation process



Coordination of decommissioning strategies



Incentivisation of the supply chain to invest in decommissioning technologies, equipment, facilities and personnel



Packaging of decommissioning work (eg by type, location or risk profile) to optimise economic and technological benefits

requirements

and

the

Other early outcomes of the consultation process are the following support activities initiated during 2008/9 by Scottish Enterprise: 

Setting up a hyperlinked capability matrix matching individual company capability with defined decommissioning competencies (see Appendix 4) 

Setting up two well-attended, structured ideas generation sessions held in Aberdeen on a multi-industry basis to explore new and innovative ways to reduce the costs of decommissioning (See Appendix 5)



Looking at producing “Tipping Point” analysis based on DECC and operating company input to establish when “it will really happen”



Investigating producing an economic impact study to evaluate the benefits of the UK supply chain winning an enhanced share of the North Sea decommissioning market



Capturing and making available “best practice” decommissioning studies

Courtesy Aker Solutions

“As someone who has first-hand experience of the benefits of integrated Norwegian/UK decommissioning, I am convinced of the advantages of a “single-market” approach in this particular sector. If we can access the best methods, and the best practices, for decommissioning regardless of North Sea boundaries, we can develop truly world-leading costefficiencies.” Kare Kristing Design Alpha AS

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North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

Appendix 1 - consultation participants Decommissioning Supply Chain Steering Group – First workshop Gordon Highlander’s Museum – Aberdeen – Tuesday 30th June 2008

Name/position Brian Nixon Fiona Ogilvie David Wilson Bill Cattanach Head of Pilot Secretariat Kåre Kristing Director - Decommissioning UK Erik Hjelde MCP-01 Cessation Director Norman McLennan Supply Chain Manager David Hoare Decommissioning Manager Alex West Regional Director (Decommissioning) Chris Gray Decommissioning Director Bob Hemmings Katrina Wiseman Strategic Projects Mgr. Colin Manderson Chairman Murdo MacIver Managing Director Rodger Harvey-Jamieson Director Uisdean Vaas Head of Oil & Gas Greg McKenna Director – Supply Chain Grethe Kjeilen-Eilertsen Senior Research Scientist – Marine Robert Haugen Executive vice president, Simon Coles Restoration Director (nuclear)

Company Scottish Enterprise BERR Aker Solutions Total Exploration & Production UK Plc Oil & Gas UK BP Exploration Operating Company Ltd Wood Group Engineering ConocoPhillips UK Ltd Shell UK Exploration & Production Shetland Enterprise Peterhead Decommissioning Limited Shetland Decommissioning Consortium The Applecross Trust Maclay Murray & Spens Venture Production Plc IRIS AF Gruppen Dounreay Site Restoration Ltd

April 2009

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

Decommissioning Supply-Chain Steering Group – 2nd Workshop Sola Strand Hotel – Stavanger – 28th August 2008

Name/position Brian Nixon Fiona Ogilvie Alastair Gray Kåre Kristing Director - Decommissioning UK Bill Cattanach Head of Pilot Secretariat Ian Prince Director Chris Gray Decommissioning Manger Katrina Wiseman Strategic Projects Manager Colin Manderson Chairman Murdo MacIver Managing Director David Leckie Partner Grethe Kjeilen-Eilertsen Senior Research Scientist Øystein Jacobsen Decommisioning/Abandonment Leader Bengt Hildisch Director Simon Coles Work Area Restoration Manager Neil Poxon Managing Director Richard Cockburn Partner Torstein Hana Business Development Adviser Steinar Nesse Associate Director

Company/location Scottish Enterprise Scottish Enterprise Genesis (facilitator) Aker Solutions BERR Wood Group ConocoPhillips UK Ltd Highlands & Islands Enterprise Lerwick Peterhead Decommissioning Limited Shetland Decommissioning Consortium Maclay Murray & Spens International Research Institute of Stavanger (Mekjarvik) StatoilHydro AF Gruppen, Oslo, Norway Dounreay Site Restoration Ltd IFT Shepherd & Wedderburn Scottish Development International (Norway) Det Norske Veritas Stavanger

April 2009

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

Decommissioning Supply Chain Steering Group – 3rd Workshop Shetland Museum & Archive – Lerwick –Tuesday 2nd December 2008 Name/position

Company/location

Brian Nixon Fiona Ogilvie Neil Fraser Katrina Wiseman Colin Grant Ross Caven Facilitator Kåre Kristing Decommissioning Consultant Murdo MacIver Director Erik Hjelde MCP-01 Cessation Manager David Westwood Senior Vice President Director Business Development Europe Gunther Newcombe North Sea Decommissioning Mgr David Hoare Pre-projects Manager, Decommissioning Chris Gray Decommissioning Manger Alex West Regional Director (decommissioning) Bengt Hildisch Director – President of Business Unit Jan Olav Algarheim Business Development Manager Richard Cockburn Partner Simon Coles Work Area Restoration Manager Pamela Coulthard Partner Bill Yuile Business manager Colin Manderson Chairman Archie MacLellan Administrator – Applecross Trust, Stewart Ford Project Manager KLB Decom. Project Audrey Banner

Scottish Enterprise Scottish Enterprise Scottish Enterprise Highlands & Islands Enterprise Highlands & Islands Enterprise Russell MacLeod Ltd

Judith Aldersey-Williams Partner - Aberdeen Leo Varkevisser Manager of Projects Gordon Picken Director Bob Hemmings Decommissioning Manager

CMS Cameron McKenna LLP

Design Alpha AS Peterson SBS Total E&P UK Plc URS Corporation Limited

BP Exploration Operating Company Ltd BP Exploration Operating Company Ltd ConocoPhillips UK Ltd Wood Group AF Decom AF Gruppen Offshore Shepherd & Wedderburn Dounreay Site Restoration Ltd Maclay Murray & Spens Production Services Network Peterhead Decommissioning Limited The Applecross Trust Venture Production Plc DECC

Allseas BMT Cordah Shell UK Exploration & Production

April 2009

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

Decommissioning Supply Chain Steering Group - Final Workshop Solstrand Hotel Os Nr. Bergen, Monday 9th February 2009 Name/position

Company/location

Brian Nixon Fiona Ogilvie Neil Fraser Katrina Wiseman

Scottish Enterprise Scottish Enterprise Scottish Enterprise Highlands & Islands Enterprise

Ross Caven Facilitator

Russell MacLeod Ltd

Øystein Jacobsen Decommisioning/Abandonment Leader

StatoilHydro

Erik Hjelde MCP-01 Cessation Manager David Hoare Pre-projects Manager, Decommissioning Chris Gray Decommissioning Manger Bob Hemmings Decommissioning Manager Norman McLennan Suppy Chain Manager David Westwood Senior Vice President Director Business Development Europe Murdo MacIver Director Kåre Kristing Decommissioning Consultant Bengt Hildisch Director – President of Business Unit Jan Olav Algarheim Business Development Manager Richard Cockburn Partner Simon Coles Work Area Restoration Manager Pamela Coulthard Partner Alex West Regional Director (decommissioning) Judith Aldersey-Williams Partner - Aberdeen Neil McMillan Business Manager Colin Manderson Chairman Leo Varkevisser Manager of Projects

Total E&P UK Plc BP Exploration Operating Company Ltd ConocoPhillips UK Ltd Shell UK Exploration & Production Oil & Gas UK URS Corporation Limited

Peterson SBS Design Alpha AS AF Decom AF Gruppen Offshore Shepherd & Wedderburn Dounreay Site Restoration Ltd Maclay Murray & Spens Wood Group CMS Cameron McKenna LLP Production Services Network Peterhead Decommissioning Limited Allseas

April 2009

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

Appendix 2 – consultation questionnaire

April 2009

A North Sea Decommissioning Supply Chain Forum? Questionnaire Background – In March 2008, Scottish Enterprise led the establishment of an industry consultation Steering Group for the purpose of identifying issues affecting the development of decommissioning supplychain competencies and capability building. This consultation process revealed a desire amongst the wider supply-chain for the creation of a new North Sea decommissioning supplychain industry Forum which would unify the disparate cluster of organisations and initiatives focused on the North Sea decommissioning market. In addition, it could –  provide a “collective voice” for the whole North Sea decommissioning supply chain;  facilitate improved communication between supply chain and OpCos – improving visibility of both opportunity and capability;  provide effective co-ordination and communication of research, information, business development and marketing functions at local, national and international levels;  build strong regional and international awareness of the North Sea’s decommissioning supply-chain capability;  create a forum for commercial networking;  be the first point of contact for enquires about North Sea decommissioning issues and guide to sources of support. Industry led and demand driven, the proposal to establish this new industry Forum has been endorsed by Oil & Gas UK. Scottish Enterprise and the Department of Energy and Climate Change also fully supports the initiative. Please help shape this new initiative by completing the following short questionnaire – Is the information currently provided about North Sea decommissioning project easy to understand and access?

Yes

No

Would you benefit from networking with other companies interested in collaborating on decommissioning projects?

Yes

No

Do you feel the wider supply-chain is well represented and its issues and opinions clearly understood by the OpCo’s and 1st Tier contractors?

Yes

No

Do you think there is general awareness of the supply-chain’s capability throughout the North Sea region

Yes

No

Would a dedicated North Sea Decommissioning Supply-Chain Forum be useful to your organization?

Yes

No

Would you like to be kept informed of the progress of this initiative?

Yes

No

Do you have any other comments (please use separate sheet if required)

Your company name: _ _ _ _ _ _ _ _ _ _ _

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

Appendix 3 - market breakdown study The attached is a detailed report commissioned by Scottish Enterprise and produced by Kare Kristing, decommissioning advisor with consultants Design Alpha AS. Mr Kristing was formerly Director of Decommissioning, UK, with Aker Solutions. In this report, Design Alpha break down the decommissioning market into discrete segments across three tiers of activity to identify the individual areas of opportunity for the Scottish supply chain. Decommissioning activities are individually analysed to illustrate the technologies, tools, competences, facilities and equipment required for successful market entry.

April 2009

α

design alpha as decommissioning consultants

Decommissioning break down structure

November 2008

Design Alpha as P.O.Box 24, 5358 Fjell, Norway T: +47 91716184 [email protected]

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Contents 1. Introduction 2. Decommissioning market potential 2.1 Cost pie of a “typical” offshore decommissioning project 3. Operators initial preparation 4. TIER ONE Break down 4.1 Platform Hot to Cold 4.2 Engineering 4.3 Offshore work 4.4 Removal and Marine Operation 4.5 Onshore Demolition 5. TIER TWO- break down 5.1 TIER TWO Platform hot to cold - break down 5.1.1 Platform closing down 5.1.2 Wells P&A work 5.1.3 Pipeline and sub sea decommissioning 5.1.4 Hook down – method independent activities 5.2 TIER TWO Engineering - break down 5.2.1 FEED / Design Competition 5.2.2 Project Management / Project Control 5.2.3 Detail Engineering and planning 5.3 TIER TWO Offshore activities - break down 5.3.1 Safety access 5.3.2 Offshore construction 5.3.3 Riser/conductor cutting and lifting 5.3.4 NDT inspection 5.3.5 Weighing 5.4 TIER TWO - Removal and marine operations break down 5.4.1 Offshore marine operations 5.4.2 Inshore marine operations – load in 5.5 TIER TWO - Onshore demolition break down 5.5.1 Onshore engineering 5.5.2 Onshore pre-demolition activities 5.5.3 Demolition work 5.5.4 Waste Management 6. Appendix 6.1 TIER TWO - break down matrix

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Introduction This report was commissioned by Scottish Enterprise to break down the decommissioning market into smaller segments, to identify the qualifications and competence required for each segments. To review how the Scottish Supply Chain (being Tier 1 – Tier 2 or Tier 3 ) might identify its scope of work within the large and prosperous decommissioning market. In the UK, there are approximately 470 offshore oil and gas installations. These are mainly located in the Northern, Central and Southern North Sea, as well as in the waters west of Shetland and in the Irish Sea. According to BERR the estimated decommissioning dates are seen in the table below:

Decommissioning is the process of physical removal and disposal of structures at the end of their working life. The process starts with a plan formulated by the operator, approved by the government and then implemented. The overall timescale for this is several years, as the program has to take into account many diverse factors. Several companies and organisations are involved in the total decommissioning chain over these several years. In this study, we shall deal with the decommissioning activities that will be initiated by the operator after the decommissioning plans have been approved by the government. We shall divide the different activities into individual segments, and discuss what sort of technology, competence, tool and equipment that is required to execute each individual segment – on its own - or weather it has to be integrated into a larger work scope.

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Decommissioning market potential As with timing estimates, projections of the overall cost of decommissioning for the UKCS also vary widely, from around £10bn to £20bn. Oil & Gas UK’s own activity survey places the cost at just under £12 billion in real terms. The variables responsible for this range of estimates include: • • •

2.1

the inclusion/exclusion of wells and pipelines the level of removal i.e. success in achieving derogations for installations (and final status for pipelines) cost estimation methods

Cost pie of a “typical” decommissioning project

Topside 15.000 tons Jacket 10.000 tons

Inshore/onshore work

PM/Engineering Procurement Logistics Offshore/ sub sea work

HLV Flotel EPRD contract

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Operators initial preparation prior to removal The operator need to develop numerous documents and produce background documentation before any approval will be given from the authorities for commencing the physical decommissioning work. • Local and international regulations • Impact on the marine environment and other users of that environment • Re-use and re-cycling opportunities • Cost, safety and practical availability of technology As a part of the cessation program – the operator need to develop numerous documents and produce background documentation before any approval will be given from the authorities for commencing the physical decommissioning work . • Descriptions of items to be decommissioned • Inventory of materials • Removal and disposal options • Wells documentation • Drill cuttings documentation • Environmental Impact Assessment • Party and stakeholders consultations • Cost and schedule • And many more… Issues which • • • • • • • • • •

also need to be considered by the operator include: Well killing, plugging, abandonment Ageing and corroding to structures Clean-up, preparation and removal of topside Dealing with contaminants – LSA scale – special waste – hazardous materials Steel jacket removal options Transport and infield flow lines Marine vessel interactions Adjacent field still producing Clearance of all debris on the sea floor And more…

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TIER ONE - break down The timescale of the physical removal program of a decommissioning project might vary from 1 year to 4-6 years or more – depending on complexity of the field, and the numbers of structures to be removed. An efficient decommissioning program is dependant on the specific characteristics of a particular facility, but some generalisations can be made. The various phases below, encompass the majority of the various activities – that might involve a TIER ONE Contractor. Production cessation is the starting point of the indicated chain of activities. The operator might consider various contractual regimes – like a Lump Sum EPRD contract (Engineering – Preparation – Removal – Demolition) or divide the activity chain into separated contracts – to be awarded to suitable and capable contractors. This study will divide the main phases into a lower level of activities/segments – and discuss the requirement of technology, competence – man power – tools and equipment that is required to execute each and individual segment.

Production Cessation Starting point - EPRD contract Platform hot to cold

Engineering

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Offshore activities

Removal & marine operations

Onshore demolition

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4.1

Platform hot to cold After the final decision of field cessation, the platform production and operation will be closed down – fully or partially. Hence, depending on the cessation plan, the platform will continue into a status of minimum operation, having only necessary safety and support systems in force. Or the platform will be made safe for an unmanned platform status. The operating company is normally in charge of such operation, due to the fact that several platform and field operations might be run in parallel. An extensive engineering activity is performed - under supervision of the operating company - to define any interfacing with other producing fields, and to detail the platform “hot to cold” activities. • • • • • • •

4.2

Wells to be closed and plugged (P&A) Pipelines to be decommissioned Platform production systems to be closed down Utility -and Safety Systems to be closed or scaled down to support the remaining platform activities Maintenance activities to be planned and organized according to the cessation program Mapping of waste and preserving/cleaning/purging of platform equipment Contractual preparation for Removal and Demolition of the structures

Engineering The engineering phase might be initiated by awarding a decommissioning FEED (Front End Engineering Design) or a Design Competition to the TIER ONE contractors. The Operator is selecting the competitive FEED contractors through a PQ (Pre Qualification) exercise. In the PQ documents, the Operator has normally prescribed its preferred contracting strategy. During the FEED / Design Competition phase - the various Contractors will develop their preferred Removal Method. Based on the result from the FEED/Design Competition, the Operator will define its final contracting strategy, and thereafter award the contract (or contracts) accordingly. The contracts might vary from - an integrated EPRD contract (Engineering – Preparation – Removal – Demolition) to a main Contractor, or divide the

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total scope among – to several contractors. This is the starting point of the major engineering activity within the decommissioning chain - starting 12 – 18 months prior to offshore construction. Required resources: 60 – 100 graduate multi-discipline engineering workforce. Including 70% with structural competence.

4.3

Offshore activities The offshore construction phase is in its nature similar to executing a seasonal Shut Down operation. You will have the same requirement for skilled workforce and supervision – all pre-requisites to be in place – i.e. work packages – documentation - pre-fabrications – onshore support – tools and equipment – scaffolding – crane support – marine spread and further. The operating workforce is numbered and composed according to the selected removal method – to safety and emergency restrictions – to availability of bed spaces – to offshore duration and to the efficiency factors. Depending on the selected topside or jacket removal method, there will be important interfaces with the individual removal operator. Estimates schedule for offshore construction duration: • 2 – 6 months for topside Heavy lifting preparation. Thereafter the heavy lift operator – using their own lifting crew – takes over the lifting opera tion. The modules/structures will be lifted onto the deck area onboard the heavy lift vessel – for transportation directly to shore. Or the structure might be placed on flat top barges, to be towed to shore. •

6 – 8 months for Piece small preparation, including offshore cutting and demolition by hydraulic shears into chargeable sizes - for onshore ship ment in containers. (Offshore demolition capacity 600 – 800 tons per week.)



4 – 6 months for platform refloat operation. Thereafter the physical refloat will be operated from a dedicated Master control vessel and towed to shore.



The jacket removal operation will be executed from dedicated marine vessels, with only minor assistance from the topside construction crew.

Required offshore resources: 100 – 300 multi-skilled operators on each rotation.

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4.4

Removal and marine operations As of today, the removal methods have been: •

Use of Heavy lift vessels – for removal of topside modules, jackets, loading buoys, flares, bridges and various sub sea installations.



Use of Construction vessels for removal of 2-6 inch field pipelines, umbili cals, and various sub sea installations.



Use of Construction vessels for pre-removal operations, like ROV inspec tion, saturated diving operations, sub sea cutting and dredging and other sub sea activities.



Use of Construction vessels to support lift off operation of a gravity based steel platform structure, by use of buoyancy volume from platform sub sea storage tanks.



Use of Construction vessels to support jacket lift off operation by use of BTA (Buoyancy Tank Assembly)



Use of Caterpillar type hydraulic shears, for cutting and demolition of top side installations. The hydraulic shears will cut the topside structure into chargeable sizes for container shipment.

The above mentioned removal methods require its individual detail engineering and planning of marine spread. I.e. selection of various sized tugs, survey vessels, tanker vessel, logistic vessels, trawlers and flat top barges c/w grillage and sea fastening. The offshore marine operation engineering – will detail the individual vessel operation and define interfacing procedures and bridging documents, where the ultimate responsibility - for each and individual marine activity - is clearly identified and acknowledge by the various parties and vessels. The inshore marine activities are depending on the harbour area and the quay side facilities. During the engineering phase, the offshore removal method including the onshore offloading will be defined having the access to the demolition yard in mind. The cost of marine operations, amount of approximately 50% of the total decommissioning project cost.

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4.5

Onshore demolition The onshore demolition site will have access to sea, offloading facilities and ample area for handling and demolition of structures, including warehouse and office facilities. The harbour area must be surrounded by sheltered waters, for various inshore marine activities. The quayside must be constructed to support skidding or trailing operations - from flat top barges. The ideal site do have deep water quay – having possibility to receive Heavy Lift Vessels for direct offloading to the quayside – area to facilitate any future decommissioning removal method – like topside transported by a Single Lift Vessel or sub sea foundation for grounding of jackets being removed by buoyancy tanks. The open land area must have facilities for environmental protection from liquid spillage, area for scrap handling, waste segregation and storage, lifting/crane support and safe driveways for transport and logistic operations. The area must be securely fenced in and protected from unwanted traffic and personnel movement. The Demolition site Operator - must comply with any licenses from local and governmental authorities, to execute onshore demolition work at the dedicated area, licenses for any sort of waste treatment, storage, handling and transporting, including scrap handling.

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TIER TWO - break down

5.1

TIER TWO Platform hot to cold - break down

Platform hot to cold

Engineering

Offshore activities

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Removal & marine operations

Onshore demolition

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5.1.1

Platform closing down

Activities might include • Closing down of production systems • Closing down utility systems and safety systems only for maintaining and securing the planned and final operations and duties • Preservation – cleaning – purging of instruments, equipment, tools,skids, vessels and piping systems • Waste mapping • Preparation for commencement of removal activities or preparing the top side for a Normally Unmanned phase The close down and cleaning operation do not require any special decommissioning expertise or technology. An experienced offshore maintenance contractor having in house engineering, supervision, foremen and operators, is qualified to execute the offshore task. Having in depth knowledge about the platform systems and the “as built” documentation. The oil and gas production systems will be closed down in sequence – system by system – or area by area. Any vessels, tanks, pumps and pipe works shall be vented and pressure released before internal flushing and cleaning. Electrical equipment and batteries to be neutralized and released for any electrical energy. All areas to be inspected and mapped for hazardous materials and special waste. Equipment like generators, turbines, cranes, pumps, motors, special skids and usable equipment to be preserved for possible future reuse. Due to some special cleaning operations and removal of hazardous waste, there might be some assistance from high pressure cleaning equipment and operators including authorized operators for handling of special waste – like Asbestos.

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Deliverables • • • • • • • •

Equipment for system cleaning incl. removal of special waste, fluids and solids. Scaffolding Safety/emergency system planning System decommissioning engineering Waste management – mapping and removal High pressure equipment and operation crew Operators – riggers – fitters - mechanics – electricians - foremen – supervisors – field engineers – safety officers Rope access personnel (Abseilors)

5.1.2 Wells P&A work The facility operator is required to obtain governmental consent to abandon any well. This entails the submission of a well abandonment program for govermental approval. The program will detail the procedures and equipment to be used in the shut-in, isolation and abandonment. The process of P&A may include a time lag between cessation of production and completion of removal operations. In such cases the process plant may be decommissioned (made cold) but the installation maintained intact pending its subsequent removal. Well plugging and abandonment work is normally executed by specialized servicecompanies, having task specific tools /equipment and in-house operators. The sub sea well intervention is supported by fixed platforms or floating vessels. The selected Contractor has to deal with wellheads and casing in various structural conditions. Due to the P&A specialized operations and risk involved, the numbers of P&A contractors are few and also highly specialized. (This study will not cover any P&A work)

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5.1.3 Pipeline and sub sea decommissioning In the UK continental shelf there are 11.000(+) km of sub sea pipelines. Ranging from inch. Some pipelines are buried – some are covered by mattresses etc. – some pipelines are lying uncovered on the seafloor. Standard procedures for decommissioning of any pipeline do include cleaning and purging of all internals for hydrocarbons. This removes all the volatile liquids that might be hazardous to the marine environment. This is a market for specialized contractors. I.e. contractors having in depth knowledge of pipeline cleaning - removal/disposal of wax and contamination – like mercury and LSA scale – using various pigging and flushing techniques. Contractors will have access to tools and equipment for dredging and cutting of guideposts, piles and anchoring arrangements – including spooling of umbilicals/ pilelines and lifting of the various sub sea installations to the surface for further onshore demolition. Sub sea decommissioning call for contractors having access to sub sea support vessels, ROV operations – including divers – and special knowledge of pipeline cleaning - both large transport pipelines – including removal and spooling of infield pipelines and umbilicals.

Deliverables • • • • • • • • • •

Construction vessels and marine crew – lifting/cranage Sub sea cutting tools – engineering and operators Dredging equipment – engineering and operators Pipeline pigging and cleaning tools incl. fluids for cleaning and preservation. Marine operation engineering ROV operations – equipment and crew Engineering for pipeline decommissioning Disposal of contaminated waste – corrosion products – and fluids – waste route Structural and metallurgical engineering Geotechincal exeprience

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5.1.4 Hook down – method independent activities At the tail end of Platform Close Down activities, the Operator might initiate a Method Independent Hook Down activity. The task include engineering, planning and removal of closed down equipment, pipelines, cables and cable supports between modules and structures, without interfering with any possible steel supports or structural integrity for later heavy lifting. Such activity could be an extention of the close down activities using tha same operating crew. Or the SOW could be given to the selected removal contractor as a pre start-up activity.

Deliverables • •

Multi discipline engineering work force Operators – riggers – fitters - mechanics – electricians - foremen – supervisors – field engineers

Example of NW Hutton modules separated after hook down

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5.2

TIER TWO - Engineering break down

Platform hot to cold

Engineering

Offshore activities

Removalmarine operations

Onshore demolition

5.2.1 FEED / design competition During a decommissioning FEED / Design Competition phase - the Removal Method will be developed. The Operating company is selecting the FEED contractor through a PQ (Pre Qualification) exercise. In the invitation documents to the PQ, the Operator has normally prescribed its preferred contracting strategy. The selected FEED-contractor will seek to develop the most competitive, efficient, safe - and cost effective removal method by selecting the best tools for the job. A FEED-contractor having ownership in Heavy Lift Vessels, will ultimately select a method where its HLV is the cornerstone. A FEED-contractor having ownership in Single Lift Vessel, will ultimately select a method where the single lifter is the tool. A FEED-contractor having ownership in any other removal tool, will select a method that strongly support such tools. A FEED-contractor without any link or ownership to any removal tool, will develop its method - based upon its own experience, knowledge and competence – and they will introduce the most cost effective and method without being biased to any vessel or specialized tool. As a part of the FEED study, the contractors will be given access to the structure for inspection, and to company provided documents and structural models. The structural models will be further developed by the contractors to safeguard the structural integrity throughout the selected methods.

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Deliverables • • • • • • • •

Experienced Project management Multi dicipline engineering task force Removal tool – like heavy lift vessel – single lift vessel – other removal tools. Access to required marine spread Access to sub sea competance Access to onshore facilities Established relationship with assisting specialized sub-contractors FEED documentation and Execution Statement

Example of a structural model (Maureen Alpha)

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5.2.2 Project Management / Project Control The overall project team – and its organization form - is very much similar to an offshore installation project. Having its project management, staff and support functions, including the direct operating functions – clearly identified as line management and subsequent reporting lines. The project organization is reflecting the contractual regime, defined by the operator. The contract regime might be an all inclusive EPRD (Engineering – Preparation – Removal – Demolition) contract where the Main Contractor is responsible for project execution and coordinating of the selected sub-contractors. Hence, The main Contractor is accepting any interfacing risk between phases and subcontractors. As such the Main Contractor owns the schedule and the selected Method(s). The project management for an EPRD contract do require extensive project management experience. Not only from execution of large offshore projects, but also extensive experience from decommissioning projects. Understanding the “cause and effect” within the decommissioning value chain. Taking the right decisions at the early stages, will heavily effect the final result – both technically and commercially. The overall premises for efficiency, safety and cost, are very much defined in the FEED/Design Competition and in the Detail Engineering. A TIER 1 contractor will include key people from the selected sub-contractors (TIER 2 and 3) into the overall project team. Segmented contracts call for its own experienced project management team. Special attentions should be made to Safety -and environmental issues, Change Management – Risk Management – Sub-contract management and Interfacing Management.

Deliverables • • • • •

Experienced project management crew Project control systems HSE management Sub-contracting management Establish support and logistic functions

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5.2.3 Detail Engineering and planning This is the major engineering activity within the decommissioning chain - starting 12 – 18 months prior to offshore construction. Information and documentation from the operator is the key to success. A survey of all available documentation relating to the offshore facility, design, modifications and maintenance records is the starting point. All such company provided documents and models will be studied in detail. All methodologies, project procedures and guidelines will be developed – all safety and preparatory work will be defined - pre-fabrication and construction drawings will be developed – work packages and detail planning will be developed and defined. All interfacing documents will be defined. Any sub-contracting assistance will be defined and awarded. This engineering is defining the removal method – the marine activities – efficiency of the offshore crew – and will ultimately govern the technical – safety – commercial and reputation success of the decommissioning program. Each and individual engineer will have to develop its own decommissioning experience path. Therefore, experiences from earlier decommissioning projects are most important to the individual engineer. An engineering workforce of 50 – 100 persons is required during detail engineering of a decommissioning project that consist of 1 – 5 platforms.

Deliverables • • • •

Multi dicipline engineering task force - 70% structural engineers Marine engineering Waste control and Demolition engineering Individual engineering by the Sub-contractors

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5.3

TIER TWO - Offshore activities break down

Platform hot to cold

Engineering

Offshore activities

Removalmarine operations

Onshore demolition

5.3.1 Safety access Before any offshore mobilization, the work place must be made safe. A crew of structural engineers, safety officers and absailers(rope access personnel) is sent to the workplace to inspect all walkways, stairways, lay down areas and any safety – and emergency exits. Anything that requires strengthening, will be rectified or replaced. Safe areas will be defined, and areas for possible dropping objects will be clearly marked.

Deliverables • • •

Structural engineers – safety officers – rope access personnel – welders and mechanics Scaffolding Steel strengthening support deliveries

5.3.2 Offshore Construction During the offshore construction phase – the operating workforce is numbered and composed according to – the selected method – safety and emergency restrictions – availability of bed spaces – facility access and man power efficiency. The offshore construction phase is very much identical to planning for a seasonal Shut Down operation. Detailed planned – defined tasks – all prerequisites in place – streamlined and skilled operating crew ready for operation – defined duration. The offshore crew will be introduced to various induction courses prior to offshore mobilization. Special attention is made to the safety and mental aspects entering a “dead” platform. No noise from operation – focus on structural wear and tear – focus on dropping objects – restricted areas – removal of pipe supports is different from installation – the platform physically disappears between each working period – and other topics.

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The composition of an offshore decommissioning work force is somewhat similar to an offshore maintenance/construction type work crew, having offshore skilled operators including supervision, onshore support and required logistic support. During construction, the platform facilities must remain operational with respect to essential services, like • Electrical power • Support systems for various tools and equipment. • Fire and Safety equipment • Life support Systems • Living Quarters (Flotel) If non of these support systems are available, temporary support systems must be supplied as an integrated part of the construction mobilisation. The onshore support is primarily project management – personnel for crew change including logistics operations – like helicopters/supply vessels/pre-fabrication/ supply of tools and equipments.

Deliverables • • • • • •

Construction tools and equipment Pre-fabricated items Follow-on engineering support and documentation Operators – riggers – fitters – mechanics – welders – crane operators – electricians – foremen – supervisors – field engineers – safety officers Scaffolding – equipment and operators Logistics operators

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5.3.3 Riser/conductor cutting and lifting Such contract is often awarded to a specialized cutting company capable of cutting and lifting conductors and risers in one operation. The contractor will normally execute its own structural engineering for the cutting and lifting operations, and hence supply its own tools and equipment - accompanied by its own crew.

Deliverables • • •

Engineering Specialized crew for cutting and lifting operations Tools and equipment

5.3.4 NDT inspection A non destructive testing of the facility is required to identify • • • •

Evidence of corrosion or mechanical damages Status of lift attachment points Identify any discrepancies between the as-found condition of the structure and the as-built information Estimate the degree of corrosion loss in the material thickness of critical elements

A crew of authorized non-destructive testing personnel is required, having r adiographic equipment and isotopes for inspection of crack in welding seams and other structural materials. Test results are normally defined and documented by onshore laboratories.

Deliverables • • •

Field engineers and operators Testing equipment Onshore laboratory and metallurgical engineering

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5.3.5 Weighing A weight audit will be conducted to identify the actual platform weight. Starting from the as-built to include items added during its lifetime, and liquid stored and their distribution within the facility. Prior to any heavy lift off – detail weighing operation might be executed to identify COG (Centre of Gravity). There are various computerized weighing equipment on the market.

Deliverables • •

5.4

Operators Weighing equipment and controls

TIER TWO - Removal and marine operations break down

Platform hot to cold

Engineering

Offshore activities

Removal & marine operations

Onshore demolition

5.4.1 Offshore marine operations The offshore marine activities, follows as a direct consequence of the defined methods for removal of topside and jackets. The construction crew onboard the platform will interface with: •

Heavy Lifting operators, that will operate its own equipment including its own dedicated crew onboard the heavy lift vessel.



Piece small operator using its hydraulic shears. The shearing machines will be given adequate area for maneuvering. The machines will be lifted on board the facility, and set in operation in designated areas.



Buoyancy float off marine operators, that will require special equipment and marine spread.



Single lift operators - (Future operations?)

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The marine activities require detailed marine engineering planning – interfacing procedures and bridging documents, where the ultimate responsibility - for each and individual marine activity - is clearly identified and acknowledge by the various parties and vessels. The offshore marine activities do also include: • Tow and transport of the steel structures – topside and jackets. • Lifting and transport of piece small items in containers. • Sea floor inspection of towing route. • Grillage / sea fastening on flat top barges - engineering and construction. • Sub sea cutting – dredging and ROV inspection. • Trawling by the fishing industry for accepting a clean sea floor. The offshore marine spread might include, • Heavy Lift Vessel, • Fat top barges • Tugs • Safety/stand by vessels • Supply vessels • Operation Master vessel • Construction vessel • Tanker • Survey vessel • Trawler vessel. • Flotel/accommodation vessel.

Deliverables • • • • • • • • •

Availability of vessels, flotel and transport barges – c/w dedicated crew Availability of Hydraulic shears and operators Marine engineering Marine project management Structural engineering Grillage and sea fastening pre-fabrication Welders and fitters Survey documentation Operation documentation

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HLV- Saipem 7000 lifting Frigg jacket

Construction vessel Norman Cutter executing subsea cutting at Frigg

Maureen Alpha towed to shore after refloat

Grillage on flat top barge

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5.4.2 Inshore marine operations – load in The inshore marine operations are executed in sheltered waters, and governed by the selected offshore decommissioning method - the transportation method - and the onshore receiving facilities. The water depth along the quay side, is very often the limiting factor for the offloading method. The structures will be lifted, skidded or trailed over the quayside, and placed on a safe onshore foundation. Any grillage and sea fastening on barges will be removed or modified for the next transportation. If a Float Off and Tow method is selected, the facility will be safely moored in a sheltered position for further processing. The facility will be cut and lifted while in floating position. Shear leg lifting vessels might be used to lift off the facility in liftable sizes and transported to quayside.

Deliverables • • • • • • • • •

Pre laid mooring equipment Mooring engineering Trailing / skidding engineering Trailing / skidding equipments and tools Crainage vessels and equipment Flat top construction barges c/w power supply and utilities Burning and cutting tools Welders and fitters Support vessels

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Inshore marine operations - shearleg lift

Heavy lift directly onto quayside

5.5

Skidding operation from flat top barge

TIER TWO - onshore demolition break down Platform hot to cold

Engineering

Offshore activities

Decommissioning break down structure

Removal & marine operations

Onshore demolition

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5.5.1 Onshore engineering Before any structure is placed onto the quayside – or delivered to the demolition site - comprehensive engineering activity will be executed. • • • •

The quay foundation and the grounding area must have the adequate supporting power to accept the tonnage of the received structures. Depending on the offloading method, i.e. offloading by crane, skidding or trailing or handling of scrap in containers - the set down area have to be planned and engineered in detail. The structure footing supports must be distributed and “made to measure” for safe and stable positioning. The structure supports might be sandbags, concrete supports - or steel grillage. Distribution of structures on the demolition area, require mapping of safety routes, access from personnel and equipment, logistic consideration w.r.t handling of materials, carnage support, scrap segregation facilities, cutting area, shipment on road and by vessels.

Special attention has to be given to environmental protection. Equipment carrying potential liquid and fluid substances to be placed in its designated area – noisy and smelling operation to be executed in protected areas. Any structure related to oil processing to be located within the special drained area to have any possible oil spillage under full control.

Deliverables • • • •

Civil engineering Structural engineering Demolition engineering Site mapping

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5.5.2 Onshore pre-demolition activities When received on site, all structures will be thoroughly inspected and made safe before any further demolition work. There shall be no potential harm to people from falling objects or un-safe walkways or stairways. The structures will be mapped and stripped for any sort of hazardous waste, LSA scale and other non-hazardous industrial waste. Any waste will be identified, segregated and removed for further processing and handling. When all hazardous waste and other non-hazardous waste are removed from the structure, a certificate “Ready for demolition” will be handed over to the Demolition contractor for further physical demolition work.

Deliverables • •

An experienced demolition crew Storage containers for segregated waste

5.5.3 Demolition work The physical demolition work is to cut and reduce the structure into manageable sizes for shipment/transport for final destruction or reuse. The structure will be demolished by use of mechanical/hydraulic cutting equipment, gas burning, or cut by diamond wire or high pressure water. The final scrapping material will be segregated and sorted by type and grade, before loaded onboard vessels or trucks for final reuse destination. Equipment identified for possible resale are removed, refurbished and re-documented. An onshore demolition contractor might have the capacity to scrap 30.000 50.000 tons per year.

Deliverables • • • • •

Engineering Demolition operators Hydraulic shears Cutting tools – diamond wire equipment – high pressure water jets – gas cutting tools Licensed to handle scrap materials

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Demolition - hydraulic shears in action

5.5.4 Waste management The Waste Management contractor has to comply with all relevant rules and regulation from local and national authorities for waste handling, storage and transporting – including complying with any Health and Safety Act for handling, storage and shipment of LSA scale. The Waste management is to identify, collect, process and transport the waste until final destruction at the specialist destruction centre. The total waste management chain shall be closely monitored and documented. A final documentation “Environmental Account Report” will be forwarded to the operator, giving detailed information of any waste – handling – reuse or destruction.

Deliverables • •

Licensed personnel to handle relevant special waste Comply with all relevant local and national approvals and licenses for waste handling, storage and transportation

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6

Appendix

6.1

TIER TWO - break down matrix

Activity

Resources

• Multi dicipline engineering Closing down • Offshore maintenance multi skilled crew

Tools/ Equipment

As for normal offshore maintenance operation

• Construction vessels • Pigging and cleaning • Sub sea cutting • Dredging • ROV • Waste and liquid handling • Onshore disposal facility

Pipeline and sub sea decommissioning

• Specialist engineering • Operating crew

Hook down – method independent activities

• Multi discipline engineerAs for normal ing offshore mainte• Operating nance operation crew

Decommissioning break down structure

Minimum Experience

Risks/ uncertainties

Offshore maintenance operations

• Hot work • Parallel offshore activities • Exposure to hazardous waste

• Pipeline decomm. • Sub sea installation • Sub sea cutting

• Pipeline condition • Hazardous waste exposure • Access to pig launcher/ receivers • Structural integrity of sub sea installations • Lifting operations

Offshore maintenance operations

• Safety mind set • Hazardous waste exposure • Structural integrity • Innovative solutions

α

design alpha

Page 31

Scottish Enterprise

Activity

FEED/Design Competition

Project Management

Resources

Tools/Equipment

• Multi discipline engineering • Project management • Assistance from subcontractors

Engineering house/facilites

Experienced management team from large offshore projects

• Project control system • HSE&Q management • Sub-contracting management • Onshore support and logistic functions

Decommissioning break down structure

Minimum Experience

• Decommissioning value chain • Project management • Decommissioning execution and method development • Marine operations • Sub sea cutting and removal • Onshore demolition operations

Decommissioning project management

Risks/uncertainties

• HSE & Q • Cost and planning • Efficiency • Interfacing • Structural integrity • Logistics • Documentation

• HSE &Q • Schedule - progress efficiency • Cost control • Change management • Interfacing • Coordination • Reporting

α

design alpha

Page 32

Scottish Enterprise

Activity

Resources

Tools/Equipment

Detail Engineering

• Multi discipline engineering • Planning • HSE&Q • Cost – contract Engineering • Logistic house/facilities • Subcontracting assistance • Marine engineerin • Onshore demolition

Safety access

• Structural engineers • Safety officers • Climbers • Construction personnel

• Prefabrications • Scaffolding • Construction tools

Decommissioning break down structure

Minimum Experience

• Decommissioning projects • Project management • Decommissioning execution and method development • Offshore construction • Marine operations • Sub sea cutting and removal • Onshore demolition operations • Waste management

Offshore construction

Risks/uncertainties

• HSE & Q • Cost and planning • Efficiency • Interfacing • Structural integrity • Logistics • Documentation • Vessel availability • Resources manning

• Access to structure • Documentation • Safety • Structural integrity

α

design alpha

Page 33

Scottish Enterprise

Activity

Offshore construction

Riser/ Conductor cutting and lifting

Resources

• Field engineers • Offshore construction crew • Supervision • Logistics • Onshore support

• Engineering • Operating crew

Tools/Equipment

Minimum Experience

• Construction tools • Cranes • Accommodation • Utility systems • Power supply • Life support Offshore systems construction • Safety systems • Prefabrications • Documentation • Safety induction courses • Procedures • Cutting equipment • Lifting equipment

Similar operations

NDT

• Ultrasonic – radiographic testing • Isotopes Operating crew • Laboratory testing • Documentation

Similar operations

Weighing

• Weighing cells • Weighing conOperating crew trol • Documentation

Similar operations

Decommissioning break down structure

Risks/uncertainties

• Work planning • Access • Exposure to hazardous waste/ liquid/fumes • Mind set and cultures • Interfacing • Change mangm. • Resources • Parallel activities

• Access • Lifting and handling • Structural integrity • Interfacing

• Access • Safety • Reporting

• Access • Interfacing • Reporting

α

design alpha

Page 34

Scottish Enterprise

Activity

Removal method

Offshore marine operations

Resources

• Detailed method engineering • Operating crew • Construction crew • Pre-fabrications • Removal method management

• Marine operation engineering • Marine crew • Construction crew • Marine project management

Tools/Equipment

Minimum Experience

Risks/uncertainties

• Heavy lifting vessel. • Lifting spread • Marine spread • Hydraulic shears • Containers Similar • Topside cranes operations • Power supply • Buoyancy Tank Assembly • Documentation • Procedures • Accommodation

• Access • Interfacing • Schedule • Availability • Lifting operations • Weather conditions • Structural integrity • Lay down area • Efficiency

• • • • • •

• Interfacing • Parallel activities • Vessel availability • Transportation • Tow • Weather condition • Sub bottom survey

Marine spread Flat top barges Sea fastening Grillage Accommodation Procedures

Decommissioning break down structure

Marine operations

α

design alpha

Page 35

Scottish Enterprise

Activity

Resources

Inshore marine operations – load in

• Marine operations engineering • Mooring engineering • Structural engineering • Construction crew • Trailing operators • Skidding operators • Ballasting crew • Onshore cranes • Goverrnmental and local approvals

Onshore engineering

• Civil engineering • Structural engineering • Demolition engineering

• Demolition crew Onshore pre- • Authorised demolition special waste handling personnel

Tools/Equipment

• Inshore lifting barges • Marine spread • Construction barges • Cutting tools • Trailing transportation • Skidding / pulling • Procedures

• • • •

Demolition area Quay facilities Pollution control Documentation

Minimum Experience

• Marine operations • Steel cutting • Sub sea cutting • Mooring • Trailing operations • Skidding operations • Ballasting operations

• Environmental control • Structural integrity • Weather condition • Access • Working in hights

Similar activities

• Soil and ground conditions • Structural stability

• Construction tools • Containers for waste segregation • Waste mapping Similar documentation activities • Cleaning documentation • Special waste removal habitat

Decommissioning break down structure

Risks/uncertainties

• In trapped and hidden hazardous materials • Exposure to hazardous fumes – liquids – LSA scale

α

design alpha

Page 36

Scottish Enterprise

Activity

Demolition work

Resources

• Engineering • Hydraulic shear operators • Construction crew • Authorisations

• Fully licensed operator Waste management • Authorised personnel

Tools/Equipment

Minimum Experience

• Hydraulic shears • Steel cutting facilities • Steel segregaHydraulic shear tion and handling operation • Concrete Scrap handling handling • Work packages • Protected area

• Storage and segregation facilities • Transportation equipment • Documentation

Decommissioning break down structure

Risks/uncertainties

• Access • Structural integrity • Uncontrolled energy release • Noice

Handling and authorisation of Non compliances special waste

α

design alpha

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

Appendix 4 – decommissioning supply chain capability matrix

Scottish Enterprise Energy Team has produced the attached hyperlinked matrix which maps the capabilities of 198 current, aspiring and potential North Sea decommissioning contractors and service providers against 18 pre-defined individual decommissioning activities.

April 2009

AEROSPACE AND MARINE INTERNATIONAL (U

Aquanos

Aquaterra Ltd







Aquatic Engineering

Aquamarine Power

Applus RDT

• • • • • •

Apache North Sea

AMEC Group Ltd

• •

Andrews Hydrographics

Altra Energy Ld

• • • • • • • • •

Andrew Palmer and Associates

Aker Kvaerner

AJT Engineering Ltd

Aiken Group

AGR Well Management

Advantica

Acergy UK Ltd

Abmas Engineering

Able UK

Aberdeen Radiation Protection Services

Aberdeen Hydraulics Ltd

Abalt Solutions

Appendix 4 – decommissioning supply chain capability matrix

Activity



Project Management





• •

Safety access



Offshore construction Riser / Conductor cutting and lifting

• •

• •







• •

• •

Onshore predemolition

Avendris

Avanteq

Aupec

• •

Atlas Engineering

Ashtead Technology Ltd

Arup Energy

Asset Development + Improvement Ltd



Waste management

Atkins Ltd

Demolition work

Babcock Integrated Technology





AXIS Well Technology

Inshore marine operations - load in

Aveva

Offshore marine operations

• • • • • • • •

• • • • • •



Bluestream Group



BJ Services UK Ltd



BIS Industrial Services Ltd

Weighting

Onshore engineering

• • •



NDT

Removal Method



Bibby Offshore

Detailed Engineering



• •

• • • •

• •

• •

• • • • •



• • • •





Bredero Shaw

• •

FEED / Design Competition



Brandt National Oilwell Varco



Hook Down - Method Independent Activities

• • • • • • • • • • • • • • • • • •

Braemar Seascope Offshore





Braemar Howells Ltd



• •

BP Petroleum



• •

Baker Hughes

Pipeline and Subsea Decommissioning

BMT Cordah



Shut Down

Activity

• •

Shut Down Pipeline and Subsea Decommissioning







• •

Hook Down - Method Independent Activities FEED / Design Competition Project Management Detailed Engineering

• • •

• •

• • •

• •

• •

• •



• •

Safety access Offshore construction



Riser / Conductor cutting and lifting NDT





• •

Weighting Removal Method Offshore marine operations Inshore marine operations - load in Onshore engineering Onshore predemolition Demolition work Waste management

Appendix 4

• •

• • • •



• • •

• • • • • • • • • • • • • • • • • •

• • • •

• •







• • •







• • • • •

• • • • • • • • • •

• • • • • • • • • • • • • • • • • •





• • •



Page 1 of 5



Cutting Underwater Technology

Core Oil and Gas Ltd

Construction Specialists Limited

Consafe Engineering

Conoco Philips UK Ltd

CO2Deepstore

Clerk Maxwell Ltd

Claxton Engineering

Chevron

Cetco Europe Ltd

Capelrig Ltd

Cape Industrial Services

Capcis Ltd

Canyon Offshore

Can (Offshore) Ltd

Cameron Ltd

Caledyne

C&M Group Ltd

Butterley Limited

Bureau Veritas Ltd

Brumac Engineering Services

Briggs Marine Services

Appendix 4 – decommissioning supply chain capability matrix

Project Management Detailed Engineering

• •

• •

• •

• •

• •

Safety access Offshore construction







Riser / Conductor cutting and lifting







• •

NDT



Weighting

• •



Energy In Focus

Energy and Power Consultants

ECE Oil and Gas Ltd

Dounreay Site Restoration Ltd



Doosan Babcock Energy



DOF Subsea Ltd

DeepSea Engineering

Waste management

• • •

DNV

Demolition work





Diajet BHR Group Ltd

Onshore predemolition

• •



Onshore engineering





Derrick Services Ltd

Inshore marine operations - load in



Denholm Oilfield Services

Offshore marine operations

• • •

Delta International

Removal Method

• •









• •



• •

• • •



• • •



• •

• •

Exxon Mobil



FEED / Design Competition



Expro North Sea Ltd





• • • • • • • • • • • • • • • • • •

ESR Technology Ltd



• •

ERT (Scotland) Ltd



Hook Down - Method Independent Activities

• • • • • • • • • • • • • • • • • •

Erith Contractors Ltd



Eric Faulds Associates Ltd



Epconsult Ltd

• •

Environmental Resources Management Ltd



• •

Enviroco

Pipeline and Subsea Decommissioning

Enship Ltd

Activity Shut Down

Activity

• •

Shut Down Pipeline and Subsea Decommissioning







Hook Down - Method Independent Activities FEED / Design Competition

• •

Project Management Detailed Engineering



Safety access Offshore construction

• •

Riser / Conductor cutting and lifting NDT



• • • •



• •

• •

• • •

• •

• • • • • • • • •







• •



Weighting

• • •

Removal Method Offshore marine operations Inshore marine operations - load in

• • •

• • •

Onshore engineering Onshore predemolition Demolition work Waste management

Appendix 4



• •









• • • • • • •



• •

• •

Page 2 of 5

• • • • •

• • • • • • • • • • • • • • • • • •

Houlder Ltd

Hertel (UK) Ltd

Heerema Marine Contractors

Harland and Wolff

Hampco

Hallin Marine

Halliburton UK

Halcrow Ltd

Gulf Offshore N.S Ltd

Grimley Smith Associates

Global Marine Systems Ltd

Global Energy Group

Genesis Oil and Gas Consultants

Gardline Marine Sciences

Fugro Survey Ltd

Fugro Welll Services

Fugro Rovotech Ltd

Fugro GEOS Ltd

Foster Wheeler Energy Ltd

Forest Environmental

Firstdrill Ltd

Farstad Shipping Ltd

Appendix 4 – decommissioning supply chain capability matrix

Activity

















• • •















FEED / Design Competition



• • •

Project Management



Detailed Engineering Safety access

• •



• • •

• • •



• •

• •



Offshore construction

• •

Riser / Conductor cutting and lifting



NDT

• •

Removal Method



Offshore marine operations Inshore marine operations - load in



• •



• • •

Onshore engineering

• • •

• • •

Onshore predemolition

• •

Lloyds Beal Ltd

Lerwick Port Authority

Kolfor Plant Ltd

KDC Contractors Ltd

KCA Deutag Drilling Ltd

KD Marine Ltd

JW Automarine

JP Kenny Caledonia

JGC Engineering Ltd

James Fisher Offshore

JR Bryan (Victoria) Ltd

J Murphy and Sons Ltd

ISS Facilities Mgmt



Intec Engineering



IMES

Iicorr

ICS Triplex

Waste management

ILF Consulting Engineers

Demolition work

Lloyds Register EMEA



Weighting



• • •

• • •

• • •

Marathon



Hook Down - Method Independent Activities

• • • • • • • • • • • • • • • • • •

Mabbett & Associates

Pipeline and Subsea Decommissioning

Long O Donnell Associates Ltd

Shut Down

Activity

• •

Shut Down Pipeline and Subsea Decommissioning





Hook Down - Method Independent Activities FEED / Design Competition Project Management Detailed Engineering Safety access

• • •



• • • • •



• • •



• • •

• •

• •

• •

NDT



Inshore marine operations - load in





• • •











• •







• •







Weighting



Removal Method Offshore marine operations

• • • •



Offshore construction Riser / Conductor cutting and lifting



• •



Onshore predemolition

• •

Demolition work

Appendix 4





• •



Onshore engineering

Waste management

• •





• • • •



• • •

• • •



• •

• • •



• • •

• • • •



• Page 3 of 5





Oteac

Optimas (Aberdeen) Ltd

Oilfield Testing Services



Oil States MCS Ltd

Offshore Design Engineering Ltd



Offshore Ship Brokers Ltd

Offshore Crane Engineering Ltd

Oceaneering

Obsidian Engineering Consultants

Nuvia Ltd

NRG Well Examination Ltd

NCA Ltd

Noble Denton Group



National Oilwell Varco

MSL Engineering



Murex Welding Products Ltd

Mott MacDonald

Midcontinent (Aberdeen) Ltd

Merpro

MC2 Technical Recruitment

Masterton Demolition

Marine Technical Limits

Appendix 4 – decommissioning supply chain capability matrix

Activity Shut Down Pipeline and Subsea Decommissioning





Hook Down - Method Independent Activities FEED / Design Competition

• • •

Project Management



• •

• •

• •

Safety access

• •

Offshore construction Riser / Conductor cutting and lifting

• • •

• •



• •









RGB Ltd

Saipem UK Lts - Sonsub

• •

• • •

PSN Ltd

Petrofac Facilities Mgmt



Poseidon International Ltd

Petrofac



PII Ltd

Peterson SBS

Peterhead Decommissioning Group

Performance Improvements

PDE Management



Prospect Flow Solutions



Waste management











• • •

• • •



• • • •











Squibb Demolition Ltd



Demolition work

• •

Sparrows Offshore Services

Onshore predemolition

• • •

SMS Ltd

Onshore engineering

• • • • • •

Smith International

• •



Smit Marine Projects



• • •

Shell E• ploration UK

• •

• • • • • •

Servetech Inspection



SEPA



Scomi Oiltools Ltd

Inshore marine operations - load in



• • •





Removal Method Offshore marine operations





NDT Weighting

• • • •

Qserv Ltd

Detailed Engineering



• •

Activity Shut Down Pipeline and Subsea Decommissioning Hook Down - Method Independent Activities FEED / Design Competition Project Management

• •

Detailed Engineering Safety access Offshore construction Riser / Conductor cutting and lifting NDT Weighting Removal Method Offshore marine operations Inshore marine operations - load in Onshore engineering Onshore predemolition Demolition work Waste management

Appendix 4



• • • • • • • • • • • • • • • • • •

• •



• • •







• • •

• • • • •





• • • • • • • •

• • • • • • •





• • • • • •



• • •











• • • •





• • • Page 4 of 5

Well Ops (UK) Ltd

Wellstream International

Wood Group Engineering

Worley Parsons

Zenocean



Weatherford

URS Corp



Wartsila UK Ltd

Trident Offshore



W S Atkins Group

Trac International Ltd



Veoli Environmental Services

Total E & P UK

Torkingon Engineers Ltd

The ATR Group

Technip UK Ltd

Talisman

Sureclean Ltd

Subsea Engineering Services

Subsea 7 Ltd

Stork Protech UK Ltd

SSA

Appendix 4 – decommissioning supply chain capability matrix











Activity Shut Down Pipeline and Subsea Decommissioning Hook Down - Method Independent Activities

• • •

FEED / Design Competition



Project Management Detailed Engineering Safety access Offshore construction Riser / Conductor cutting and lifting





• • •

• • •





• • •

NDT Weighting Removal Method Offshore marine operations Inshore marine operations - load in

• • •

• •

Onshore engineering Onshore predemolition



Demolition work Waste management

Appendix 4



• • • • • • • • • • • • • • • • • •

• • •

• •

• •

• • •

• •

• •



• • •

• •



• •







• •





• •

• •

• •





• •

• •







• •

• •



Page 5 of 5

• •

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

Appendix 5 – outputs from innovation workshops In February and March 2009, Scottish Enterprise and Oil & Gas UK organised two highly productive innovation workshops in Aberdeen attended by 39 senior representatives of the North Sea decommissioning sector and other industries (eg nuclear). Through facilitators UXL Ltd, participants were led through structured ideas sessions to identify radical ways of reducing the costs, and enhancing the efficiency, of North Sea decommissioning. The outputs and participants from these sessions are summarised in the following pages.

April 2009

Half-Price Decommissioning Thursday 5th February 2009 The Gordon Highlanders Museum St. Luke’s Viewfield Road Aberdeen AB15 1XH 01224 311 200 Times: 09.00 to 13.30 (including lunch) Facilitators: Jim Dearie & Michael Kearns – UXL Limited (www.uxl-ltd.com) [email protected] & [email protected]

Representatives from other industry sectors 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

Jim French President – Savannah River Remediation [email protected] Rear Admiral Ric Cheadle Development Director for Defence & Nuclear Markets [email protected] Richard Cockburn Partner [email protected] Simon Coles Work Area Restoration Manager [email protected] Ian Phillips Director – CO2 Infrastructure [email protected] Donald Michie International Business Development Director [email protected] Bill Cattanach Head of PILOT Secretariat [email protected] Paul Dymond Operations Director [email protected] Ashutosh Sinha (Ash) Assistant Director & Manager of Projects [email protected] Ben Sharples Project Director [email protected] Ian Lindsay Director – Commercial Projects [email protected] Nigel Peters Managing Director [email protected] Sander Korte General Manager Marine & Subsea [email protected] Angela Mathis Chief Executive [email protected] David Symon Managing Director – Denholm MacNamee [email protected]

Organisation URS Corporation http://www.urscorp.com/



Atkins Ltd http://www.atkinsglobal.com/



Shepherd & Wedderburn http://www.shepwedd.co.uk/



Dounreay Site Restoration Ltd http://www.dounreay.com/



CO2 Deepstore http://www.co2deepstore.com/



ASCO Group http://www.ascoworld.com/index.asp



Department of Energy & Climate Change http://www.pilottaskforce.co.uk/



Oil & Gas UK http://www.ukooa.co.uk/



Shipbuilders & Repairers Association http://www.ssa.org.uk/



James Fisher Defense Limited http://www.james-fisher.co.uk



Babcock Integrated Technology http://www.babcock.co.uk/opco/marine



Secro Group Plc http://www.serco.co.uk/



SMIT Marine Projects http://www.smit.com



ThinkTank Maths Limited www.Thinktankmaths.com



Denholm Oilfield Services http://www.denholm-oilfield.com



Oil & Gas Decommissioning representatives 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

Tom Taylor Subsea & New Developments Manager [email protected] David Hoare Pre-projects Manager, Decommissioning [email protected] Chris Gray Decommissioning Manger [email protected] Murdo MacIver Director [email protected] Kåre Kristing Decommissioning Consultant [email protected] Bill Yuile Business Manager [email protected] Graham Morrison Specialist Structural Inspector [email protected] Jan Stinenbosch Proposal Manager [email protected] Alex West Director [email protected] Richard Austin Director [email protected] David Ellison Business Development / Key Account Manager [email protected] Lawrence Cobain Sales Manager (Civils) [email protected] Wim de Boer Business Acquisition Manager North West Europe [email protected] Chris Mott Marketing Manager [email protected] Catherine Morgan Development Engineering Team Leader [email protected] Dave Cawson Operations Manager [email protected] Bob Hemmings Decommissioning Consultant [email protected]

Organisation Nexen Petroleum UK Ltd http://www.nexeninc.com



BP Exploration Operating Company Ltd http://www.bp.com



ConocoPhillips UK Ltd http://www.conocophillips.co.uk



Peterson SBS http://www.sbsl.com



Design Alpha AS



Production Services Network http://www.psnworld.com



Health & Safety Executive http://www.hse.gov.uk



Allseas Marine Services NV http://www.allseas.comn



Wood Group www.woodgroup.com



Global Maritime http://www.globalmaritime.com



Saipem UK Limited, Sonsub Division http://www.sonsub.com



Harland & Wolff http://www.harland-wolff.com



Heerema Marine Contractors http://www.heerema.com



Fugro Group http://www.fugro.com



Talisman Energy (UK) Limited http://www.talisman-energy.com



Subsea 7 http://www.subsea7.com



Shell UK Exploration & Production http://www.shell.com/



Observer / support / facilitation 1. 2. 3. 4. 5.

Michael Kearns [email protected] Jim Dearie [email protected] Brian Nixon [email protected] Fiona Ogilvie [email protected] Ross Caven [email protected]

UKL Limited http://www.uxl-ltd.co.uk UXL Limited http://www.uxl-ltd.co.uk Scottish Enterprise http://www.scottish-enterprise.com Scottish Enterprise http://www.scottish-enterprise.com



Russell MacLeod Ltd



  

Innovative Decommissioning #2 Monday 30th March 2009 The Gordon Highlanders Museum St. Luke’s Viewfield Road Aberdeen AB15 1XH 01224 311 200 Times: 12.00 to 16.00 (including lunch)

Name

Facilitators: Jim Dearie & Michael Kearns – UXL Limited (www.uxl-ltd.com) [email protected] & [email protected] Organisation

1.

Jim French President – Savannah River Remediation [email protected]

URS Corporation http://www.urscorp.com/



2.

Simon Coles Work Area Restoration Manager [email protected]

Dounreay Site Restoration Ltd http://www.dounreay.com/



3.

Ian Phillips Director – CO2 Infrastructure [email protected]

CO2 Deepstore http://www.co2deepstore.com/



4.

Alex West Director [email protected]

Wood Group www.woodgroup.com



5.

Angela Mathis Chief Executive [email protected]

ThinkTank Maths Limited www.Thinktankmaths.com



6.

Bob Hemmings Decommissioning Consultant [email protected]

Shell UK Exploration & Production http://www.shell.com/



7.

David Hoare Pre-projects Manager, Decommissioning [email protected]

BP Exploration Operating Company Ltd http://www.bp.com



8.

Chris Gray Decommissioning Manger [email protected]

ConocoPhillips UK Ltd http://www.conocophillips.co.uk



9.

Donald Michie International Business Development Director [email protected]

ASCO Group http://www.ascoworld.com/index.asp

10.

Ian Lindsay Director – Commercial Projects [email protected]

Babcock Integrated Technology http://www.babcock.co.uk/opco/marine



11.

Jan Stinenbosch Proposal Manager [email protected]

Allseas Marine Services NV http://www.allseas.comn



12.

David Ellison Business Development / Key Account Manager [email protected]

Saipem UK Limited, Sonsub Division http://www.sonsub.com





Name

Organsiation

13.

Bill Yuile Business Manager [email protected]

Production Services Network http://www.psnworld.com



14.

Graham Morrison Specialist Structural Inspector [email protected]

Health & Safety Executive http://www.hse.gov.uk



15.

Richard Austin Director [email protected]

Global Maritime http://www.globalmaritime.com



16.

Catherine Morgan Development Engineering Team Leader [email protected]

Talisman Energy (UK) Limited http://www.talisman-energy.com



17.

Uisdean Vass Partner [email protected]

Maclay Murray & Spens http://www.mms.co.uk/



18.

Tom Taylor Subsea & New Developments Manager [email protected]

Nexen Petroleum UK Ltd http://www.nexeninc.com



19.

Bill Cattanach Head of PILOT Secretariat [email protected]

20.

Murdo MacIver Director [email protected]

Peterson SBS http://www.sbsl.com



21.

Andrew Sneddon Aberdeen Manager [email protected]

URS Corporation http://www.urscorp.com/



22.

John Goodlad Fisheries Industry Consultant [email protected]

Havsea Ltd



23.

Samuel Halliday [email protected]

ThinkTank Maths Limited www.Thinktankmaths.com



24.

Bengt Hildisch Director/President of Business Unit [email protected]

AF Decom Offshore www.afgruppen.no



25.

Jan Olav Algarheim Business Development Manager JanOlav[email protected]

AF Decom Offshore www.afgruppen.no



26.

Norman McLennan Supply Chain Issues Manager [email protected]

Oil & Gas UK http://www.ukooa.co.uk/



Department of Energy & Climate Change http://www.pilottaskforce.co.uk/



Support / facilitation 27.

Michael Kearns [email protected]

UKL Limited http://www.uxl-ltd.co.uk



28.

Jim Dearie [email protected]

UXL Limited http://www.uxl-ltd.co.uk



29.

Fiona Ogilvie [email protected]

Scottish Enterprise http://www.scottish-enterprise.com



30.

Neil Fraser [email protected]

Scottish Enterprise http://www.scottish-enterprise.com



Decommissioning Feedback in Workshop #2 - 30 March 2009

1. Form a Company to take on Responsibility & Liability a. Use facility to generate energy b. Hydrogen storage c. Renewable energy

2. Renewables Related - Large platforms a. Re-use – collection hub & management centre for wind/wave – send electricity on shore b. Who – SE Industry Initiative – bring in large electricity companies c. Why is it different – Revenue streams/R&D angle – big heat pump d. How – Fixed fee for SME units/Large Co

3. Create Discrete Central Offshore Service Centres a. Larger platforms i. Shut down hotel ii. Warehouse for spare b. How – Industry study on distribution centres – independent not oil related i. Learn from other industries ii. Benefit from global price of resource iii. Government / Industry funding

4. Collaboration for Innovation a. Currently doesn’t exist – benchmark with MOD experience b. Reward Collaborative Innovation – Part/Full Funding in key technologies i. IP – Define where ownership lies ii. Remove risks to encourage innovation iii. Showcase ideas to industry – implemented iv. Platform for SMEs/Universities to participate v. Annual Innovation conference – showcase innovation/technology

5. Impartial Body a. System doesn’t encourage collaboration b. Next batch of decommissioning c. Bring together stakeholders – managed by Government i. HM Treasury/Government ii. Bring Forward batch of projects iii. Bring money to treasury d. Compile Value Proposition e. Set rules for how next 5 projects will be let f. Set priorities of risk & reward g. Best in class contractors h. Take things back OSPA (?) change their procedures i.

Need to set plan & responsibilities

Half-price_Decom_5thFeb v2.xls

Scottish Enterprise Half Price Decommissioning Event - 5th February 2009

How can we half the price of decommissioning ? Michael Kearns Notes & Score Melt & crush in situ half the activity Leave the pipelines Bio consume the platform Less labour intensive Fish processing factory Reef it in situ Challenge the risk Airship to lift out Sell to scrap merchant Pull over and leave Treat as marine salvage Ask someone to do 17 for 14 price Co-operation of oil company - share vessel mob & de-mob costs between operators Reduce marine spead use Challenge the laws Delay the better economic times Revise jackets power? Offshores? Develop method earlier Accelerate rusting Training centre Brothel Wind energy Bank Place for bankers Target practice Tourist attraction Nuclear plant Missile launch pad Storage Waste storage Liquified waste Lift all out in oner Small bat Refueling facility Offshore bothy Rehab centre Bird sanctuary Cheap dismantling Leave & cover Leave stuff on sea bed Wave power Render inert Fish breeding facility Fish farm Offshore farm Thermal power Observatory Nuclear waste storage Optimise tendering process Share mobile costs Share vessels Match specialists to tasks Use out of work people to d othe work - employment Ask NGO's what they will do with it Engage NGO's in ideas Join up operators Bigger single projects Plan the work

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Work the plan Explosives Set fire to it Bomb it Laser it Cut up offshore Use for target practice Controlled fire to clean it Atomise it Blow up and drop in big hole Sell tickets Global coverage Lottery to blow it up Use right equipment to do job Lighthouse Speed dating location Solar power Film set Blow it over Prison Community project Guantanamo bay Turn into plant nursery Museum Search ocean for cap Fish farm factory presentation Offshore studio Billionaire to pay for this Write a script on decom Sell shares on the decom Sell small pieces at moment Fundraising Price for most innovative idea Manage risk - societal risk of doing less Sell the idea to do less Lobby for different mindset Pilot study a fish farm Ram it over Buoyancy balls Floating Take to Mexico Exit regulations - do what is right Create PR company to spend money on something else Wooley jumpers Take more risk Current wooliey thinking Listening - engaging stakeholders - NGO's - Regulators Independence: objective - 1/3rd partly looks at this Break stubborness of oil companies Break entrenched ideas Cut anodes off & leave Use different financial model - hedge currency Make it invisible Ask the French More underwater activity Diverless All with divers Straight from sea to shore Take 1/2 off, leave the rest Balance of energy used - carbon footprint Whole life costing - invest in environmental Performance objective - how clean is clean? Plant to help clean up Bio remediation

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Half-price_Decom_5thFeb v2.xls

Jump from one platform to other - bundling Industry wide fund Maybe with Government Sell decom better Build into curriculum in schools Leave the footings Carbon footprint Flexible load carrier Order of doing it Priority list What if one enterprise did it How long will it last if left Press the last drop of oil/gas out Operator co-operation Inudstry co-operation i.e. Oxy Sustainable decom industry Unmanned production Beach - breaking up - acceptable - aircraft carrier, Teesside Opportunities to learn from each other ITF decom research - create a new entity for decom Redesign new ones for easier decom Float team elsewhere for re-use Just fill the holes leaving all liners in place North sea jacket dump as a reef for fish Create a 'Nuclear Decommission Authority' for decommission Savings account to grow money for future decommissioning Engage with other stakeholders - Greenpeace, fishing, recycling Mobilise public to produce ideas Create decom company from industry Store nuclear waste down the deep holes Artificial reef Find middle ground between 'do nothing' and 'do all' IMCA type of regulatory body Encapsulate substruckes (concrete) Bride foundations Storage cells fill storage cells - leave as new rock formation Job creation to dismantle Engage the salvage industry more Re-use jackets for building projects Widen the engagement to discuss how folk want their taxes spent Get Far East or emerging economies involved Tie back producing fields to others so we can decommission without abandonment Government buys a crane or 2 Get society more involved in process Generate funding through entertainment Use offshore techniques Compete the process - look outwards Cut pipelines into habitable sections Stimulate the metal jackets to accept more sea life Bury the pipelines Improved relationship between operator/contractor to develop optimum method and schedule How to preserve the jackets Pipeline rides Cannabis growing Sequence of several functions ending in removal Create a central dump Use ex-auto industry skills Sanctuary spa Alternative ways of spending the money (schools etc) - present case China now have the resources to help Some sort of defence use? Platforms as communications towers Sun panels

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Fresh water generation - points in global warming climate Use platforms/wells to produce thermal heat - for use onshore Climbing training centre Puspose built vessel - multi -purpose Create an offshore marine centre Re-use for CCS - carbon capture & store Monastry Link the work with areas in the country with high unemployment Health spa Research & rescue centre Are there any health benefits of living on an oil rig? Commit to sample - before & after end states Launch education programs/guide schools on CO2 emissions and avoidance of Track/poll long term releases - building ENVIRO trust Exclusive restaurant Dive training centre Gift to 3rd world country Develop into offshore centre Reality tv show, Big Brother style Keep them for post global warming above sea level dwelling Burn them down Honeymoon suites Offshore racing buoys Offshore lifeboat centre Offshore greenhouses Diving training centre Sell as observatory - clear skies Commando training centre Sports diving Reduce works to essentials Mobile phone tower Offshore sailing centre Sporting centre of excellence Transit stations Wind energy Win a heritage home away from home for holidays sell to highest bidder Leave in place and ensure environmental risks are avoided Offer them free to businesses that will recycle them Offshore hotel Boarding school Adventure playground Award them civil licenses for marriages -hotel/conference facility Could those close together be physically linked to support their vulnerability? Helicopter pilot training school Retirement apartments If we have developed 200 ideas in 1/2 day why not do it again and get some more? Use for storing something that can't be (safely) stored on land NHS Dentists/hospitals offshore Re-use them as wireless telephone masts in situ Make a major statue e.g. Statue of Liberty/Angel of the North Use the power of internet blogs to generate ideas from around the world Sell small parts of rig on ebay as souveniers Internet service - secure site Lobby the judges to change legislation Create an offshore school or college Turn bits into useful products Location for photo shoots Detox & revive

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Jim Dearie Notes & Score Understand cost Half the amount Improve efficiency Continuous market Co-operation Design to re-cycle Share costs Increase competition Extend life Re-use as hubs - renewable Different processes Prisons Clean & leave Reefing Not for profit industry Camoflage paint Eliminate risers / uncertainties Use new technology not yet discovered Make into islands Shared investment for large capital plant Tax breaks Other industries for common things Seasonal Remove client-contractor relations Speak to Government regarding legislation Government reward innovation incentive Soften environmental legislation Drain North sea More yard capacity Wait for sea level to rise Let them rust Dump in North Atlantic Sink assets Better maintain Minimise timescale - go cold - break down Mow the seabed - automated Move work onshore Corrosion enhancement Rigs - reefs Extend life - re-use Remove/share risk Wind power sites Re-cycle Wave/tidal renew Re-sell jackets Clean it up faster Removal in one 'lump' Not stand alone - need for portfolio thinking Shared access to decom resource More data / data analysis / understand the problem Turn back time Change public opinion - education Share the problem with the tax payer Toxic bank' for decom - Government body to manage liability Generate a fund Sink over fault lines Blow it up'! Send to space Improve concrete structures Don't compete w/development - resources - separate industry Specific decom resources - vessels/resources/fund Change industry centre for this - not ABN

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Half-price_Decom_5thFeb v2.xls

Give it away for free Secc/Ebay/Lottery Fish farms Seasonal - one season Gather together Fun 'Decom Fest' Good weather Take the valuable/good - 'burn' the rest Drag on sea floor Tourism - Diving/Fishing/Sailing - island Pirate radio station Chemical treatment - bioremediation More public opinion - feel good/clean Cost Reduction Group Paint green Accelerate ? Make adaptable Connect to wind mills Use to farm seafood Fish farming Desalination plants Admission fee World War 3 Christmas/New Year get-away Vessel parking space available Memorial garden Climate changer Chasing rainbows Circuit theory Global risks 12 nights for only £273 per person Neighbourhood - darkness Seafood in the middle of the sea Face to face with North sea Great British get-aways for 2009 Water Wonder - water sports Exhibitions Tagging trouble Evolution before & after Comet cleaners A room with a view Luxury on a budget - holiday on a rig Approaching genius Sustainable developments Evolution Latest face of creation New frontiers Tidal bulge Great barrier reef Global risk The magic of oil rigs Living legacy Latest tricks Anti gravity Environmental pay-off Work knowledge Knowledge is power Success breeds success Frog chorus - all sing together Design for future Control of assets - change Portfolio Convertables Not for profit

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Half-price_Decom_5thFeb v2.xls

Freeze Locally drain water Solidify Ditches Crunch up Flexible resource Utility investments Mid term use as gas fired power stations until CCS and clean coal and nuclear new build - energy shortage "Corporate" salvage Gas/carbon storage Swap Concrete steel termite Common resources!! Training, learning - fast track experience Access to finance Eliminate false divides (perception vs fact) Less CO2 Compress Cleaning technologies Bonuses Discounts Low tech - salvage - agricultural Greater, wider, more positive communciation Fell them Emotionally driven Smile 1 Make the process independent of suips & people? Extend life Containment Redefine work Adventure holidays - extreme sports Sell/reuse parts or "remnants" in other apppointments & industries Reverse public opinions and make the industry "heroes" Engage innovations & new ideas East/West link Port project Seeing on faith Aquarium Robots autonomous systems Secure storage sites Make concessions to win support Searching for the snowflake solution Thinking out of the box Outer space technology Romance, mystery & magic Be different - don't follow the herd! Divide industry focus Blow 'em up! Electrification plans - power hub for wind farms Age defying "Launch" into space Sustainable developments Fishing Discovery trail on an oil rig / unexplored oil rigs Simplify regulation Power dressing Wait for nothing Reward innovation (carbon concessions, tax, refunds etc) Big little problem Museums Duty free shopping Leave in situe Cosmetic Surgery Boom year - exploding platforms? Training centres for military etc

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Bridge supports Chemically neutralise Perfect match Saving feels good Steel town - offshore steel mill Another toxic ship heads to Hartlepool Totally wired world Do short intense workouts Location location - minimise transport dilema New style rules Let SAS practice demolition (explosives) on them Reabsorbtion into the planet Fred Dibnah Escape/adventure sites Jamie Oliver - change perceptions The brand you can trust Central fund - pay monthly Put the spotlight on Change rules on accounting provisions for liabilities An American revolution

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Technical Process Idea

Theme

"Launch" into space Airship to lift out All with divers Another toxic ship heads to Hartlepool Atomise it Beach - breaking up - acceptable - aircraft carrier, Teesside Better maintain Bio remediation Cheap dismantling Commit to sample - before & after end states Compress Crunch up Cut up offshore Diverless Drag on sea floor Engage innovations & new ideas Gift to 3rd world country Give it away for free Less labour intensive Lift all out in oner Minimise timescale - go cold - break down More yard capacity Move work onshore Plant to help clean up Purpose built vessel - multi -purpose Removal in one 'lump' Robots autonomous systems Seasonal - one season Sequence of several functions ending in removal Straight from sea to shore Take to Mexico Use new technology not yet discovered Use right equipment to do job Blow up and drop in big hole Bride foundations Bury the pipelines Camoflage paint Chemically neutralise Clean & leave Clean it up faster Cleaning technologies Containment Corrosion enhancement Cut anodes off & leave Cut pipelines into habitable sections Encapsulate substructers (concrete) fill storage cells - leave as new rock formation Floating Freeze How to preserve the jackets Leave & cover Leave in place and ensure environmental risks are avoided Leave in situe

Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Complete Removal Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ

Let them rust Locally drain water Lottery to blow it up Make it invisible Paint green Pull over and leave Ram it over Reabsorbtion into the planet Sink assets Solidify Stimulate the metal jackets to accept more sea life Storage cells Tidal bulge Wait for sea level to rise Wave/tidal renew Accelerate rusting Bio consume the platform Bomb it Boom year - exploding platforms? Chemical treatment - bioremediation Concrete steel termite Controlled fire to clean it Create a central dump Ditches Dump in North Atlantic Explosives Fell them Find middle ground between 'do nothing' and 'do all' half the activity Just fill the holes leaving all liners in place Laser it Leave stuff on sea bed Leave the footings Leave the pipelines Let SAS practice demolition (explosives) on them Low tech - salvage - agricultural Melt & crush in situ Mow the seabed - automated Order of doing it Reduce works to essentials Render inert Revise jackets power? Offshores? Set fire to it Sink over fault lines Take 1/2 off, leave the rest Take the valuable/good - 'burn' the rest Treat as marine salvage Turn bits into useful products Design to re-cycle Develop method earlier Different processes Improve efficiency Make adaptable Redefine work Search ocean for cap Understand cost

Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Leave in Situ Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Partial Removal Research Research Research Research Research Research Research Research

Drain North sea Improve concrete structures Small bat Turn back time

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Collaboration Idea

Theme

Central fund - pay monthly Change industry centre for this - not ABN Common resources!! Training, learning - fast track experience Current wooliey thinking Frog chorus - all sing together Fun 'Decom Fest' Generate a fund Greater, wider, more positive communciation Industry wide fund ITF decom research - create a new entity for decom Jamie Oliver - change perceptions Make concessions to win support Mobilise public to produce ideas More public opinion - feel good/clean Not for profit Not for profit industry Not stand alone - need for portfolio thinking Price for most innovative idea Put the spotlight on Reverse public opinions and make the industry "heroes" Sustainable decom industry What if one enterprise did it Write a script on decom "Corporate" salvage An American revolution Break entrenched ideas Break stubborness of oil companies Challenge the risk Change public opinion - education Compete the process - look outwards Control of assets - change Co-operation Co-operation of oil company - share vessel mob & de-mob costs between operators Create decom company from industry Create PR company to spend money on something else Design for future Divide industry focus Don't compete w/development - resources - separate industry Eliminate false divides (perception vs fact) Engage the salvage industry more Engage with other stakeholders - Greenpeace, fishing, recycling Float team elsewhere for re-use Gather together If we have developed 200 ideas in 1/2 day why not do it again and get some more? Improved relationship between operator/contractor to develop optimum method and schedule Increase competition Independence: objective - 1/3rd partly looks at this Inudstry co-operation i.e. Oxy Join up operators Knowledge is power Lobby for different mindset Lobby the judges to change legislation Match specialists to tasks More data / data analysis / understand the problem New style rules Operator co-operation

Both Both Both Both Both Both Both Both Both Both Both Both Both Both Both Both Both Both Both Both Both Both Both Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies

Opportunities to learn from each other Plan the work Priority list Redesign new ones for easier decom Remove client-contractor relations Remove/share risk Saving feels good Searching for the snowflake solution Share costs Share mobile costs Share the problem with the tax payer Share vessels Shared access to decom resource Shared investment for large capital plant Speak to Government regarding legislation Specific decom resources - vessels/resources/fund Swap Take more risk The brand you can trust Tie back producing fields to others so we can decommission without abandonment Work knowledge Work the plan Alternative ways of spending the money (schools etc) - present case Ask NGO's what they will do with it Build into curriculum in schools Challenge the laws Change rules on accounting provisions for liabilities China now have the resources to help Continuous market Create a 'Nuclear Decommission Authority' for decommission Eliminate risers / uncertainties Engage NGO's in ideas Exit regulations - do what is right Get Far East or emerging economies involved Get society more involved in process Government buys a crane or 2 Government reward innovation incentive Job creation to dismantle Launch education programs/guide schools on CO2 emissions and avoidance of Link the work with areas in the country with high unemployment Listening - engaging stakeholders - NGO's - Regulators Maybe with Government Optimise tendering process Other industries for common things Reward innovation (carbon concessions, tax, refunds etc) Savings account to grow money for future decommissioning Sell decom better Simplify regulation Soften environmental legislation Tax breaks Toxic bank' for decom - Government body to manage liability Use ex-auto industry skills Use out of work people to d othe work - employment Widen the engagement to discuss how folk want their taxes spent Ask the French Big little problem Convertables Could those close together be physically linked to support their vulnerability? Perfect match Success breeds success Flexible resource

Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Companies Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government Government x? x? x? x? x? x? x?

Revenue + Other Uses Ideas

Theme

Access to finance Admission fee Billionaire to pay for this Cost Reduction Group Fundraising Generate funding through entertainment Offer them free to businesses that will recycle them Re-sell jackets Secc/Ebay/Lottery Sell shares on the decom Sell small parts of rig on ebay as souveniers Sell small pieces at moment Sell tickets sell to highest bidder Sell to scrap merchant Sell/reuse parts or "remnants" in other apppointments & industries Use different financial model - hedge currency Aquarium Artificial reef Bank Bird sanctuary Boarding school Bridge supports Buoyancy balls Cannabis growing Climbing training centre Comet cleaners Commando training centre Community project Cosmetic Surgery Create an offshore marine centre Create an offshore school or college Detox & revive Develop into offshore centre Duty free shopping East/West link Exclusive restaurant Exhibitions Face to face with North sea Film set Fish breeding facility Fish farm factory presentation Fish processing factory Fishing Great barrier reef Guantanamo bay Helicopter pilot training school Internet service - secure site Latest face of creation Lighthouse Location for photo shoots Make a major statue e.g. Statue of Liberty/Angel of the North Make into islands Memorial garden Missile launch pad Monastry Museum Museums Neighbourhood - darkness New frontiers NHS Dentists/hospitals offshore North sea jacket dump as a reef for fish Offshore bothy Offshore farm Offshore greenhouses

Financial model Financial model Financial model Financial model Financial model Financial model Financial model Financial model Financial model Financial model Financial model Financial model Financial model Financial model Financial model Financial model Financial model Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other

Offshore lifeboat centre Offshore racing buoys Offshore studio Outer space technology Pilot study a fish farm Pipeline rides Pirate radio station Place for bankers Port project Prison Prisons Reality tv show, Big Brother style Reefing Refueling facility Rehab centre Research & rescue centre Rigs - reefs Seafood in the middle of the sea Sell as observatory - clear skies Some sort of defence use? Speed dating location Steel town - offshore steel mill Storage Sustainable developments Target practice The magic of oil rigs Training centres for military etc Transit stations Turn into plant nursery Use for target practice Use the power of internet blogs to generate ideas from around the world Use to farm seafood Vessel parking space available Win a heritage home away from home for holidays More underwater activity 12 nights for only £273 per person A room with a view Adventure holidays - extreme sports Adventure playground Award them civil licenses for marriages -hotel/conference facility Christmas/New Year get-away Discovery trail on an oil rig / unexplored oil rigs Diving training centre Escape/adventure sites Great British get-aways for 2009 Health spa Honeymoon suites Luxury on a budget - holiday on a rig Offshore hotel Offshore sailing centre Retirement apartments Sanctuary spa Sporting centre of excellence Sports diving Tourism - Diving/Fishing/Sailing - island Tourist attraction Water Wonder - water sports Re-use jackets for building projects Ask someone to do 17 for 14 price Bigger single projects Jump from one platform to other - bundling Gas/carbon storage Re-use for CCS - carbon capture & store Store nuclear waste down the deep holes Use for storing something that can't be (safely) stored on land Connect to wind mills Electrification plans - power hub for wind farms Fresh water generation - points in global warming climate

Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Other Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recreation Recycle scale up scale up scale up Storage Storage Storage Storage Utilities Utilities Utilities

Mid term use as gas fired power stations until CCS and clean coal and nuclear new build - energy shortage Mobile phone tower Nuclear plant Platforms as communications towers Re-use as hubs - renewable Re-use them as wireless telephone masts in situ Solar power Use platforms/wells to produce thermal heat - for use onshore Utility investments Wind energy Wind power sites Be different - don't follow the herd! Brothel Chasing rainbows Circuit theory Delay the better economic times Do short intense workouts Extend life - re-use Flexible load carrier Good weather Keep them for post global warming above sea level dwelling Latest tricks Living legacy Location location - minimise transport dilema Romance, mystery & magic Thinking out of the box Unmanned production Use offshore techniques Wooley jumpers World War 3

Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities x? x? x? x? x? x? x? x? x? x? x? x? x? x? x? x? x? x? x?

Environment & Public Idea

Theme

Are there any health benefits of living on an oil rig? Balance of energy used - carbon footprint Emotionally driven Environmental pay-off Global risks How long will it last if left Manage risk - societal risk of doing less Performance objective - how clean is clean? Press the last drop of oil/gas out Sell the idea to do less Track/poll long term releases - building ENVIRO trust Whole life costing - invest in environmental Age defying Anti gravity Climate changer Global coverage Less CO2 Reduce marine spread use

perception change perception change perception change perception change perception change perception change perception change perception change perception change perception change perception change perception change x? x? x? x? x? x?

Scottish Enterprise - Innovative Decommissioning 30th March 2009

How do you change stakeholder behaviours to be more receptive to the collaborative approach and facilitate cost effective and sustainable contractor approaches? 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44

Transfer all assets to a single company Establish contractor groupings Eliminate risk Eliminate greed Common company/collective funding (consortia funding) Pilot Government initiative Government funding for common industry practices - benefit to risk reduction especially in area of innovation Demonstrate improved value proposition for all parties Education - stakeholders - highlight benefits to environment (industry brand) Accepting complete flexibility on schedule - not an event - a campaign Contracting model needs improved Predictability model - better time frames - R&D Show benefits to stakeholders Perform beyong their expectation Reward collaborative innovation Sharing of risk - contractors with customers Better sharing of knowledge - open forums for info/solutions Develop a code of practice Rewarded as a discriminator by customer Project ideas Learning from other industry models Opertor openess on schedules Keep contractors going whilst unprecitability carries on - investment by Government? De-risk innovation via a common fund - ok to try and fail or succeed Third party toolbox available to all JV customer groupings Create co-operation models - operators and contractors Central body to analyse failures for forward development Culture of continuous improvement Identify safe collaboratrive areas Don't expect cost saving straight away - takes time/experience Central fund for decommissioning innovation Work collaboratively to make as cost effective as possible Keep as simple as possible Competition as catalyst for ideas Individual project managers - how to get them to take more risks - rewards? Impartial Government body to dictate how next batch of work undertaken DECC's role too passive (50% of costs are after all from taxpayer) - what are they investing in process? Create a separate decomm unit in DECC They need to fix C.O.P determination method Address need for support to innovation Address level of appropriate residual risk Look at CO2 impact - stimulate innovation Clarify responsibility within DECC

Scottish Enterprise - Innovative Decommissioning 30th March 2009

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Demonstrate positives for supporting collaborative interventions Structure of DECC - causes conflicts of interest? Voters/Taxpayers (returns to them) Pro-active joint industry lobbying to Government Make decomm look good to the public (jobs etc) Lobby Ministers & local MP's - all levels, top to bottom Take advantage of opportunity for jobs in a lean economic time Create a value proposition for Government (and for DECC) Jobs Return money to treasury Money re-invested in development Cost savings Supply chain anchored in UK (jobs) Less money spent by treasury Scale up to world's market Grow SME base UK PLC opportunity Save CO2/energy/environment Public credibility for Government Contribution of supply chain to economy Less energy Imported from abroad to do decomm if better processes Learning from other industries e.g. salvage Defining sustainability and opportunity for the industry How to get round standard competitive bidding? (alternatives) - bidding vs 68 consortium

Scottish Enterprise - Innovative Decommissioning 30th March 2009

Assumptions Stakeholders sceptical Self focus We can do it better always Need for change Credibility issue on when it's going to happen Must be a cheaper way of doing it Need alignment between drivers Some form of facilitation Risk protection leads to cost increase Common understanding of risk Stakeholder preception operators have funds to implement Innovation is individually owned

What stifles Innovation? Stealing ideas Not been tried here before Not invented here Risk aversion I win, you lose Threat to practices/jobs Uncertainty over timings Failure of premature deployment Corporate directives Rewards for Collaborative Innovation It’s missing It's beneficial There are "benchmark" examples (MoD, Dtech C, DDA) - joint industry projects Mechanism Tax relief Access to facilities Part funding of critical technologies (R&D) Definition of ownership of IP Removes risk (apportions risk) Provides a platform to showcase success - public & industries Removes influence of scale - SME's/Universities have same weight as majors Regulation "Impartial" body to chose projects and assess benefits/rewards Additional Suggestion Conference to exchange "papers" Ties and supports into other "collaboration" benefits i.e. DECC - contractor risk etc

Scottish Enterprise - Innovative Decommissioning 30th March 2009

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How can we create central offshore service centres that are commercially viable? Shut down hotels Bangalore Call centres Create a workable regulatory structure Cost savings Public sector support for ongoing maintenance Transport network Id USP Power generator Military application Emergency response Exclusive/luxury retreat Safe havens Gas storage Metrological Renewables - offshore wind Communication centre Offshore fish farm Operated by contractors Maintenance centres Warehouse/logistics/spares Nuclear waste storage Reservoir structures Fully automated units Training Recording studio - electric guitars! Wave Wind Solar Storage for renewables Substation - power from onshore Renewables for hydrogen water Fast track testing centre Heavy water capture EU high voltage network Large scale heat pumps Pineapple restaurant Internet server farm Scientific survey Business recovery centre - data storage Offshore designer label - tax free Yacht race service centre Make watches from oil rigs! Prisons Prisons & call centres combined Battery farm (animal to be decided) Peace & reconciliation centres Team building

North Sea Decommissioning Supply Chain Steering Group Report on industry consultation

Appendix 6 – Decom North Sea outline business plan

The consultation process identified a number of key issues to be addressed, of which the most predominant was the need for an independent, industry-led decommissioning forum to maximise the new business opportunities of this market and develop cost-efficient decommissioning strategies to benefit the overall industry. The attached pages comprise a preliminary summary proposal which explores how such a body might be structured, what its main objectives would be and how it could be funded. As such, it should be viewed only as an outline of intent development of a detailed and costed business plan will be an early deliverable of the new forum’s Supervisory Board and Executive Team.

April 2009

North Sea Decommissioning Forum Outline Business Plan

March 2009

Page 1 of 9

1.0

Introduction

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Background

In March 2008, Scottish Enterprise led the establishment of a Steering Group set up to assess the capability and market-readiness of the supply chain for the North Sea offshore decommissioning market. In particular, the Decommissioning Supply Chain Steering Group was tasked with consulting potential, intending and active participants in this market to identify the main challenges they faced and the barriers which would have to be overcome to enable successful market entry. Regular opportunity reviews produced by Scottish Enterprise since 2002 had already confirmed the market potential of the decommissioning supply chain – both for North Sea and international installations – while also noting widespread uncertainties over issues like timing, seasonality, cost, contractual responsibilities, technical capability and other critical factors. The Decommissioning Steering Group consisted primarily of UK and Norwegian companies and organisations and it’s work was essentially an industry consultation programme carried out between June 2008 and February 2009. 50% of meetings were held in the UK and the other 50% were held in Norway. This consultation process identified a number of key issues to be addressed, of which the most predominant was the need for an independent, industry-led decommissioning forum to maximise the new business opportunities of this market and develop cost-efficient decommissioning strategies to benefit the overall industry. Membership would be open to all interested companies in the North Sea Region. This document is a preliminary summary proposal which explores how such a body might be structured, what its main objectives would be and how it could be funded. As such, it should be viewed only as an outline of intent - development of a detailed and costed business plan will be an early deliverable of the new forum’s Supervisory Board and Executive Team.

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1.1

Outline proposal

In December 2008, the Decommissioning Supply Chain Steering Group delegated a small working group to make further consultation with the industry on the concept of a decommissioning supply chain forum, and to examine the operational feasibility of such an organisation. In the light of this group’s recommendations, it was proposed that a new industry association be created – set up as a not-for-profit company limited by guarantee, funded jointly by industry (on a subscription basis) and by Scottish and UK government agencies for its first two years of operation. The name of the new organisation is Decom North Sea, having as its principal aims: 

to develop and promote North Sea decommissioning supply-chain capability



to respond to economic, technological and strategic challenges facing the North Sea decommissioning supply chain



to initiate and deliver strategic action plans, market research and coordinated activities in support of the whole North Sea decommissioning industry

The scope of the operational activities of Decom North Sea will be clearly defined at all stages to complement and enhance the work of other decommissioning organisations and work groups. The “North Sea” element in its title is deliberately placed to emphasise the organisation’s inclusive focus – i.e. to continue the founding Steering Group principals of full integration with other North Sea decommissioning markets. The concept of establishing this industry-led, demand-driven organisation is endorsed by Scottish Enterprise (SE), the Department of Energy and Climate Change (DECC), Highlands and Islands Enterprise (HIE) and Oil & Gas UK. SE, DECC and HIE have been approached to support the establishment and initial operational phase with public sector funding. Decom North Sea will work closely with relevant government agencies and, through Memoranda of Understanding, complement the activities of other industry associations operating in the North Sea decommissioning region to formulate effective, fully-coordinated strategies to accomplish our joint objectives.

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1.2

The research and consultation processes

The industry consultation process involved the Steering Group participating in four full-day group workshops held in Scotland and Norway between June 2008 and February 2009. The consultation workshops were held in Aberdeen, Stavanger, Lerwick and Bergen with representatives participating from national oil and gas operating companies, independent operating companies, offshore and subsea contractors, service providers, decommissioning consultants, government departments and economic development agencies. Each workshop was chaired by an independent facilitator, and wide-ranging issues were covered regarding the challenges, opportunities and possible structure of the future North Sea decommissioning supply chain. Following the final consultation in Bergen in February 2009, the outcomes of these processes will be collated and summarised. A distinct and compelling requirement has already emerged from these workshops for the creation of a new supply-chain organisation which can unify the disparate clusters of bodies and initiatives in the North Sea decommissioning market, and bring clarity and commonality to an emerging and currently disjointed sector of the offshore oil and gas industry. To confirm the demand for such an industry association, the Steering Group supplemented its consultation workshops with an emailed questionnaire issued to a wider audience of potential participants in the new organisation. From the responses received to date, there has been almost unanimous support both for the concept of a dedicated North Sea decommissioning association and for opportunities to network with other companies on potentially collaborative decommissioning projects. The majority of questionnaire responses also confirm perceptions that information about North Sea decommissioning projects is difficult to access, that there is a general lack of awareness of the supplychain’s capability, and that there exists a widespread lack of understanding of the many issues which influence and drive this market.

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2.0

About Decom North Sea

Decom North Sea’s primary aim is to develop and establish a competitive UK decommissioning supply chain. The consultation process has confirmed a consensus view that the relatively immature UK decommissioning market will be most efficiently developed through fostering technical, strategic and commercial collaboration across the North Sea market. As the main industry body and focal point for the North Sea decommissioning sector, Decom North Sea‘s principal objective is to increase business opportunities for its members in both domestic and international markets. To do this, Decom North Sea aims to unify the fragmented supply chain and create a strong group identity for the North Sea companies and organisations which have the competency and aspiration to become involved in offshore decommissioning. Bringing together the supply chain in this way in a cohesive format will increase the pace of innovation, increase competition in the supply chain and work towards the goal of driving down the costs of North Sea decommissioning, as well as enhancing the international competitiveness of the North Sea decommissioning sector in the global market.

2.1

Decom North Sea – initial objectives

Decom North Sea will provide an effective forum for collaboration, diversification, innovation and coordinated global marketing of the North Sea’s decommissioning capability in an industry which currently consists of disjointed groups and initiatives. Early objectives will include: Development and promotion 

Promotion of North Sea decommissioning supply-chain capability at local, national and international levels



Unified representation of members’ interests at all levels of government and industry



Production and promotion of a strong group identity to support members’ marketing

Response capability 

Set up working groups to respond to technological and strategic challenges



Provide an effective first point of contact for enquiries about operating in the North Sea decommissioning market

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Work in conjunction with government agencies and industry associations in the region to define effective strategies for the development of the North Sea decommissioning supply chain

Industry support 

Deliver cost-efficient and coordinated support to enable the supply chain to achieve its strategic objectives



Develop and deliver an effective events programme including market intelligence seminars, business mentoring workshops, promotional events and networking opportunities



Develop a strategic plan for a sustainable, internationally-competitive North Sea decommissioning supply chain

2.2

Long-term objectives

Based on the example of the Nuclear Decommissioning Authority, further objectives may extend to: 

Improved focus on decommissioning requirements and the implementation process;



Coordination of decommissioning strategies;



Incentivisation of the supply chain to invest in decommissioning technologies, equipment, facilities and personnel;



Packaging of decommissioning work (eg by type, location or risk profile) to optimise economic and technological benefits.

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2.3

Organisation and membership –

Management a)

The Supervisory Board

A Supervisory Board of around 20 will be established, led by a chairman with a proven trackrecord of operational business success in offshore decommissioning. The Decom North Sea Supervisory Board will have overall responsibility for operational matters, including directing the preparation of business plans, establishing aims, strategy, participants, long-term organisational structure, membership levels, research areas, and key performance indicators. The Supervisory Board will also have responsibility for developing membership rules and regulations. th

The first formal meeting of Decom North Sea will take place in Aberdeen on Thursday 16 April, at which the following formal board nominations will be made – Chairman Murdo McIver – Peterson SBS Supervisory Board Members 1. Donald Michie – ASCO Group 2. Simon Coles – Dounreay 3. Jim French – URS Corporation 4. Bill Yuile – PSN 5. Richard Cockburn – Shepherd & Wedderburn 6. Mark Stanley – Veolia Environmental Services Ltd 7. Alex West – Wood Group 8. Norman McLennan – Oil & Gas UK 9. Kare Kristing – Design Alpha AS Plus 11 others – still to be identified. Plus public sector “observers”: 1. Bill Cattanach – Head of PILOT Secretariat, Department of Energy & Climate Change (DECC); 2. Katrina Wiseman – Head of Transformational Projects, Highlands & Islands Enterprise (HIE); 3. Fiona Ogilvie – Project Manager, Scottish Enterprise (SE). Note: UK and Scottish Government departments are not normally able to accept Board appointments. Instead, each of the participating government departments – DECC, SE and HIE – will reserve the right for a staff member to attend all board and workgroup meetings in the capacity of “observer”.

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b)

The operational management team

The Supervisory Board will have responsibility for appointing an operational management team of initially two full-time employees: 1. Chief Executive Officer – reporting to the Supervisory Board – Decom North Sea’s CEO will be a recognisable, high-profile industry figure with, ideally, at least 10 years experience at a senior business executive level (Director or above). Energetic and pro-active the CEO will demonstrate considerable market credibility and have in-depth knowledge of the domestic and international decommissioning industry and the challenges facing its UK supply chain. He or she will demonstrate an active and current senior contact 2. Operations Director – reporting to the Operations Director – This could be the first appointment. The OD will demonstrate an ability to hit the ground running and quickly develop and implement plans for the launch, business development, marketing and membership attraction of Decom North Sea. Operational business experience in the oil & gas industry is deemed to be essential as is international marketing, commercial oversight and operational business administration/management. Membership Tiered levels of membership will be open to any individual or organisation who wishes to join. Membership of Decom North Sea will be available in the following (nominal) categories: Associate Members

£250 per annum

Educational Institutions

£525 per annum

< 5 employees

£525 per annum

5-11 employees

£750 per annum

12-20 employees

£1,000 per annum

21-35 employees

£1,575 per annum

36-50 employees

£2,000 per annum

50-99 employees

£2,750 per annum

> 100 employees

£5,000 per annum

Research undertaken during the consultation period indicates that there are potentially 200 UK businesses and organisations with the capability and ambitions to be actively engaged in the North Sea decommissioning market.

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3.0

Funding

The Decom North Sea finance strategy is based on securing funding from industry (membership and business streams) and the public sector during the two-year start-up phase. In the short-term (two years), Decom North Sea will require funding to cover operating costs and to establish its sustainable position. Start-up plus first- and second-year operating costs are estimated at approximately £550k over the first 2 years of operation. This start-up funding will be sought on a shared-cost basis between industry, and public-sector grant contributions. The industry support will be delivered on a subscription basis but it is important to note that this industry revenue will only accrue through time and as a result of consistent and aggressive marketing effort. From Year 3 onwards, Decom North Sea will be expected to sustain itself through membership fees, donations, sponsorship and chargeable services. Summary financial projections appear at Appendix 1. The Supervisory Board will have responsibility for developing a full operational budget and projections.

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