Decom Offshore 2016: Industry veterans launch new decom company

Well Decom: Peter Greaves, Graeme Johnston, Stephen Jewell
Well Decom: Peter Greaves, Graeme Johnston, Stephen Jewell

Three oil and gas industry veterans have pooled their years of experience in well management to launch a new company focused on plugging and abandonment in the North Sea.

Aberdeen-based Well Decom has been launched to offer strategic advice to operators to help companies manage costs by minimising the risks inherent in the planning of well decommissioning operations.

More than half of the estimated £40 to £70 billion which will be spent decommissioning infrastructure in the North Sea will go on plugging and abandonment.

Founder Stephen Jewell has previously held high level positions with Amerada Hess, co-founded and subsequently sold an independent exploration and production company – Composite Energy – and founded Xodus Subsurface, before establishing his own consultancy.

He said: “Despite the industry’s best efforts to extend field life, the North Sea is a mature basin and there are around 8,000 wells which will ultimately require decommissioning. The industry estimates that two thirds of those will have to be decommissioned in the next 30 years.

“More than half of the money spent on decommissioning will be spent on the wells – the bits you don’t see – and as well as being the costliest part of the total project it carries particular risks and uncertainties. When a well is plugged and abandoned it needs to be sealed, forever.

Jewell said P&A which has been done in the North Sea to date has been on exploration or appraisal wells, which can regularly be hydrocarbon free.

“That’s not the case with mature wells. These have been producing for perhaps 10 or 20 years and generally present more surprises and risks. It is the ability to manage those risks which is key to a successful decommissioning programme and a satisfactory budget outcome,” said Jewell.

Jewell, along with co-founders Graeme Johnston and Peter Greaves, each have 30 years’ experience in the industry, including a considerable amount in well decommissioning.

While new technology has an important role to play in helping bring down decommissioning costs, it is very important that operators don’t see it as the only option, said Jewell, who was talking at the Decom Offshore 2016 conference at Aberdeen Exhibition and Conference Centre.

“Managing the risks and uncertainties involved in re-entering old wells is not just about having a new technology, it’s about careful planning and preparation,” he said.