Comparative Economic Analysis of Offshore Platform Decommissioning Methods

Saturday Ebigenibo Genuine; Amusat Waheed Olaide

doi:doi:10.11648/j.eas.20190401.12

| Peer-Reviewed

Comparative Economic Analysis of Offshore Platform Decommissioning Methods

Saturday Ebigenibo Genuine, Amusat Waheed Olaide

Published in Engineering and Applied Sciences (Volume 4, Issue 1)

Received: 21 January 2019 Accepted: 25 February 2019 Published: 18 March 2019

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

In this work, three basic approaches for removing offshore facilities-piece small, piece large and single lift methods were considered and applied to six different platforms (A, B, C, D, E and F) using data obtained from Proserv Offshore. The aim is to ascertain the decommissioning costs, salvage values and the onshore real value of each platform in the future when decommissioning will take place. The decommissioning cost for piece large obtained was used to generate piece small and single lift decommissioning costs exploiting analytical method/using relevant relations. The annual interest rate was derived from the data which was provided for 2010 and 2014 and the future decommissioning costs for each method was estimated for all the six platforms. The decommissioning costs (in million US dollars (M$)) for the six platforms A, B, C, D, E and F with respective weights 2012, 15128, 42100, 54660, 112392 and 130178 tons for piece small method are respectively 25.1, 164.5, 851.7, 1321.3, 5051.4 and 6196.5. The salvage values (in M$) for these platforms using the piece small method are 105.76, 217.87, 468.04, 570.64, 1099.47 and 1169.77 respectively while the onshore real values after decommissioning are 80.66, 53.37, -383.66, -750.66, -3951.93 and -5026.73. Results were also obtained for the other two methods. Comparing the results of the different methods it was observed that the most appropriate decommissioning option for Nigeria offshore is piece large with decommissioning cost, salvage Value and onshore real value of 16.7 M$, 100.2 M$ and 83.5 M$ respectively for platform A.

Published in	Engineering and Applied Sciences (Volume 4, Issue 1)
DOI	10.11648/j.eas.20190401.12
Page(s)	11-15
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Decommissioning Cost, Piece Large, Piece Small, Salvage Value, Single Lift, Onshore Real Value

References

[1]	ABB (2015). Offshore Oil and Gas Decommissioning, A Technical Report. Available at: https://library.e.abb.com/public/d689c2f70f0c447586610ac566c9aa7e/ ABB- Offshore- Oil- and-Gas-Decommissioning-2015.pdf. Accessed on 20/08/2018.
[2]	ICF Incorporated (2018). Decommissioning Methodology and Cost Evaluation. Available at: https://www.bsee.gov/sites/bsee.gov/files/tap-technical-assessment-program/ 738aa. pdf. Accessed on 25/08/2018.
[3]	Fowler, A. M., Macreadie, P. I., Jones, D. O. B. and Booth, D. J. (2014). A Multi-Criteria Decision Approach to Decommissioning of Offshore Oil and Gas Infrastructure, Ocean and coastal Management, Vol. 87, pp. 20-29.
[4]	Wilkinson, W. B., Bakke, T., Clauss, G. F., Clements, R. Dover, W. D. Rullkötter, J. and Shepherd, J. G. (2016). Decommissioning of Large Offshore Structures – The Role of an Independent Review Group (IRG), Ocean Engineering, Vol. 113, pp. 11-17.
[5]	Techera, E. J. and Chandler, J. (2015), Offshore Installations, Decommissioning and Artificial Reefs: Do Current Legal Frameworks Best Serve The Marine Environment?, Marine Policy, Vol. 59, pp. 53-60.
[6]	Fam, M. L., Tan, H. K., Konovessis, D. and Ong, L. S. (2017). A Review of Offshore Decommissioning Regulations in Three Countries: Strengths and Weaknesses, ASME 2017 36th International Conference on Ocean, Offshore and Arctic Engineering, Trondheim, Norway, June 25–30, 2017.
[7]	Fam, M. L., Konovessis, D., Ong, L. S. and Tan, H. K. (2018). A review of offshore decommissioning regulations in five countries – Strengths and weaknesses, Ocean engineering, Vol. 160, pp. 244-263.
[8]	Parente, V., Ferreira, D., dos Santos, E. M. and Luczynski, E. (2006). Offshore Decommissioning Issues: Deductibility and Transferability, Energy Policy, Elsevier, Vol. 34, Issue 15, pp. 1992-2001.
[9]	Chandler, J. White, D. Techera, E. J., Gourvenec, S. and Draper, S. (2017). Engineering and Legal Considerations For Decommissioning Of Offshore Oil and Gas Infrastructure in Australia, Ocean Engineering, Vol. 131, pp. 338-347.
[10]	Friederichs, C., Dibello, F., Tignanelli, A. and Garzia. (2015). Reliable and Innovative Approach for Decommissioning Study of Oil & Gas Plants, in the Proceedings of Offshore Mediterranean Conference and Exhibition, 25-27 March, 2015, Ravenna, Italy.
[11]	Bressler, A. and Bernstein, B. B. (2015). A Costing Model For Offshore Decommissioning in California, Integrated Environmental Assessment and Management, Vol. 11, Issue 4, pp. 554–563.
[12]	Kaiser, M. J. and Liu, M. (2014). Decommissioning Cost Estimation in the Deep Water U.S. Gulf of Mexico – Fixed platforms and Compliant Towers, Marine Structures, Vol. 37, pp. 1-32.
[13]	Lun, N. K., Zawawi, N. A. W. A. and Liew, M. S. (2012). Conceptual Framework: Semi-PSS for Sustainable Decommissioning of Offshore Platforms in Malaysia, 2012 International Conference on Statistics in Science, Business and Engineering (ICSSBE), 10-12 Sept. 2012, Langkawi, Malaysia.
[14]	Burns & McDonnell (2018). Decommissioning Plan and Decommissioning Obligation Cost Evaluation. Available at: https://www.mcleancountyil.gov/ Document Center/ View/11312/AP-EX-8--Revised. Accessed on 20/08/2018.
[15]	Macreadie, P. I., Fowler, A. M., Booth, D. J. (2012). Rigs-to-Reefs Policy: Can Science Trump Public Sentiment? Front Ecol Environ, Vol. 10, pp. 179-180.
[16]	Macreadie, P. I., Fowler, A. M., Booth, D. J. (2011). Rigs-to-Reefs: Will the Deep Sea Benefit from Artificial Habitat? Front Ecol Environ, Vol. 9, pp. 455-461.
[17]	Stacey, A., Birkinshaw, M. and Sharp, J. (2008). Life Extension Issues for Ageing Offshore Installations, International Conference on Offshore Mechanics and Arctic Engineering, (June), pp. 1–17.
[18]	Proserv Offshore (2010). Decommissioning Cost Update for Removing Pacific OCS Region Offshore Oil and Gas Facilities, Minerals Management Service Report MMS M09P C00024. Available at: https://www.bsee.gov/sites/bsee.gov/files/tap-technical-assessment-program//646aa.pdf. Accessed on 22/08/2018.

Cite This Article

Plain Text BibTeX RIS

APA Style

Saturday Ebigenibo Genuine, Amusat Waheed Olaide. (2019). Comparative Economic Analysis of Offshore Platform Decommissioning Methods. Engineering and Applied Sciences, 4(1), 11-15. https://doi.org/10.11648/j.eas.20190401.12

Copy | Download

ACS Style

Saturday Ebigenibo Genuine; Amusat Waheed Olaide. Comparative Economic Analysis of Offshore Platform Decommissioning Methods. Eng. Appl. Sci. 2019, 4(1), 11-15. doi: 10.11648/j.eas.20190401.12

Copy | Download

AMA Style

Saturday Ebigenibo Genuine, Amusat Waheed Olaide. Comparative Economic Analysis of Offshore Platform Decommissioning Methods. Eng Appl Sci. 2019;4(1):11-15. doi: 10.11648/j.eas.20190401.12

Copy | Download

@article{10.11648/j.eas.20190401.12,
  author = {Saturday Ebigenibo Genuine and Amusat Waheed Olaide},
  title = {Comparative Economic Analysis of Offshore Platform Decommissioning Methods},
  journal = {Engineering and Applied Sciences},
  volume = {4},
  number = {1},
  pages = {11-15},
  doi = {10.11648/j.eas.20190401.12},
  url = {https://doi.org/10.11648/j.eas.20190401.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eas.20190401.12},
  abstract = {In this work, three basic approaches for removing offshore facilities-piece small, piece large and single lift methods were considered and applied to six different platforms (A, B, C, D, E and F) using data obtained from Proserv Offshore. The aim is to ascertain the decommissioning costs, salvage values and the onshore real value of each platform in the future when decommissioning will take place. The decommissioning cost for piece large obtained was used to generate piece small and single lift decommissioning costs exploiting analytical method/using relevant relations. The annual interest rate was derived from the data which was provided for 2010 and 2014 and the future decommissioning costs for each method was estimated for all the six platforms. The decommissioning costs (in million US dollars (M$)) for the six platforms A, B, C, D, E and F with respective weights 2012, 15128, 42100, 54660, 112392 and 130178 tons for piece small method are respectively 25.1, 164.5, 851.7, 1321.3, 5051.4 and 6196.5. The salvage values (in M$) for these platforms using the piece small method are 105.76, 217.87, 468.04, 570.64, 1099.47 and 1169.77 respectively while the onshore real values after decommissioning are 80.66, 53.37, -383.66, -750.66, -3951.93 and -5026.73. Results were also obtained for the other two methods. Comparing the results of the different methods it was observed that the most appropriate decommissioning option for Nigeria offshore is piece large with decommissioning cost, salvage Value and onshore real value of 16.7 M$, 100.2 M$ and 83.5 M$ respectively for platform A.},
 year = {2019}
}

Copy | Download

TY  - JOUR
T1  - Comparative Economic Analysis of Offshore Platform Decommissioning Methods
AU  - Saturday Ebigenibo Genuine
AU  - Amusat Waheed Olaide
Y1  - 2019/03/18
PY  - 2019
N1  - https://doi.org/10.11648/j.eas.20190401.12
DO  - 10.11648/j.eas.20190401.12
T2  - Engineering and Applied Sciences
JF  - Engineering and Applied Sciences
JO  - Engineering and Applied Sciences
SP  - 11
EP  - 15
PB  - Science Publishing Group
SN  - 2575-1468
UR  - https://doi.org/10.11648/j.eas.20190401.12
AB  - In this work, three basic approaches for removing offshore facilities-piece small, piece large and single lift methods were considered and applied to six different platforms (A, B, C, D, E and F) using data obtained from Proserv Offshore. The aim is to ascertain the decommissioning costs, salvage values and the onshore real value of each platform in the future when decommissioning will take place. The decommissioning cost for piece large obtained was used to generate piece small and single lift decommissioning costs exploiting analytical method/using relevant relations. The annual interest rate was derived from the data which was provided for 2010 and 2014 and the future decommissioning costs for each method was estimated for all the six platforms. The decommissioning costs (in million US dollars (M$)) for the six platforms A, B, C, D, E and F with respective weights 2012, 15128, 42100, 54660, 112392 and 130178 tons for piece small method are respectively 25.1, 164.5, 851.7, 1321.3, 5051.4 and 6196.5. The salvage values (in M$) for these platforms using the piece small method are 105.76, 217.87, 468.04, 570.64, 1099.47 and 1169.77 respectively while the onshore real values after decommissioning are 80.66, 53.37, -383.66, -750.66, -3951.93 and -5026.73. Results were also obtained for the other two methods. Comparing the results of the different methods it was observed that the most appropriate decommissioning option for Nigeria offshore is piece large with decommissioning cost, salvage Value and onshore real value of 16.7 M$, 100.2 M$ and 83.5 M$ respectively for platform A.
VL  - 4
IS  - 1
ER  -

Copy | Download

Author Information

Saturday Ebigenibo Genuine

Department of Mechanical Engineering, University of Port Harcourt, Port Harcourt, Nigeria
Amusat Waheed Olaide

Offshore Technology Institute (OTI), University of Port Harcourt, Port Harcourt, Nigeria

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Saturday Ebigenibo Genuine, Amusat Waheed Olaide. (2019). Comparative Economic Analysis of Offshore Platform Decommissioning Methods. Engineering and Applied Sciences, 4(1), 11-15. https://doi.org/10.11648/j.eas.20190401.12

Copy | Download

ACS Style

Saturday Ebigenibo Genuine; Amusat Waheed Olaide. Comparative Economic Analysis of Offshore Platform Decommissioning Methods. Eng. Appl. Sci. 2019, 4(1), 11-15. doi: 10.11648/j.eas.20190401.12

Copy | Download

AMA Style

Saturday Ebigenibo Genuine, Amusat Waheed Olaide. Comparative Economic Analysis of Offshore Platform Decommissioning Methods. Eng Appl Sci. 2019;4(1):11-15. doi: 10.11648/j.eas.20190401.12

Copy | Download

@article{10.11648/j.eas.20190401.12,
  author = {Saturday Ebigenibo Genuine and Amusat Waheed Olaide},
  title = {Comparative Economic Analysis of Offshore Platform Decommissioning Methods},
  journal = {Engineering and Applied Sciences},
  volume = {4},
  number = {1},
  pages = {11-15},
  doi = {10.11648/j.eas.20190401.12},
  url = {https://doi.org/10.11648/j.eas.20190401.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eas.20190401.12},
  abstract = {In this work, three basic approaches for removing offshore facilities-piece small, piece large and single lift methods were considered and applied to six different platforms (A, B, C, D, E and F) using data obtained from Proserv Offshore. The aim is to ascertain the decommissioning costs, salvage values and the onshore real value of each platform in the future when decommissioning will take place. The decommissioning cost for piece large obtained was used to generate piece small and single lift decommissioning costs exploiting analytical method/using relevant relations. The annual interest rate was derived from the data which was provided for 2010 and 2014 and the future decommissioning costs for each method was estimated for all the six platforms. The decommissioning costs (in million US dollars (M$)) for the six platforms A, B, C, D, E and F with respective weights 2012, 15128, 42100, 54660, 112392 and 130178 tons for piece small method are respectively 25.1, 164.5, 851.7, 1321.3, 5051.4 and 6196.5. The salvage values (in M$) for these platforms using the piece small method are 105.76, 217.87, 468.04, 570.64, 1099.47 and 1169.77 respectively while the onshore real values after decommissioning are 80.66, 53.37, -383.66, -750.66, -3951.93 and -5026.73. Results were also obtained for the other two methods. Comparing the results of the different methods it was observed that the most appropriate decommissioning option for Nigeria offshore is piece large with decommissioning cost, salvage Value and onshore real value of 16.7 M$, 100.2 M$ and 83.5 M$ respectively for platform A.},
 year = {2019}
}

Copy | Download

TY  - JOUR
T1  - Comparative Economic Analysis of Offshore Platform Decommissioning Methods
AU  - Saturday Ebigenibo Genuine
AU  - Amusat Waheed Olaide
Y1  - 2019/03/18
PY  - 2019
N1  - https://doi.org/10.11648/j.eas.20190401.12
DO  - 10.11648/j.eas.20190401.12
T2  - Engineering and Applied Sciences
JF  - Engineering and Applied Sciences
JO  - Engineering and Applied Sciences
SP  - 11
EP  - 15
PB  - Science Publishing Group
SN  - 2575-1468
UR  - https://doi.org/10.11648/j.eas.20190401.12
AB  - In this work, three basic approaches for removing offshore facilities-piece small, piece large and single lift methods were considered and applied to six different platforms (A, B, C, D, E and F) using data obtained from Proserv Offshore. The aim is to ascertain the decommissioning costs, salvage values and the onshore real value of each platform in the future when decommissioning will take place. The decommissioning cost for piece large obtained was used to generate piece small and single lift decommissioning costs exploiting analytical method/using relevant relations. The annual interest rate was derived from the data which was provided for 2010 and 2014 and the future decommissioning costs for each method was estimated for all the six platforms. The decommissioning costs (in million US dollars (M$)) for the six platforms A, B, C, D, E and F with respective weights 2012, 15128, 42100, 54660, 112392 and 130178 tons for piece small method are respectively 25.1, 164.5, 851.7, 1321.3, 5051.4 and 6196.5. The salvage values (in M$) for these platforms using the piece small method are 105.76, 217.87, 468.04, 570.64, 1099.47 and 1169.77 respectively while the onshore real values after decommissioning are 80.66, 53.37, -383.66, -750.66, -3951.93 and -5026.73. Results were also obtained for the other two methods. Comparing the results of the different methods it was observed that the most appropriate decommissioning option for Nigeria offshore is piece large with decommissioning cost, salvage Value and onshore real value of 16.7 M$, 100.2 M$ and 83.5 M$ respectively for platform A.
VL  - 4
IS  - 1
ER  -

Copy | Download