Industry veteran Jim Christie left the Oil and Gas Authority (OGA) in June having helped deliver a key piece of research – the cost estimate for UKCS decommissioning.
A short time later, Mr Christie arrived at fledgling Aberdeen decommissioning specialist Well-Safe Solutions, where he was appointed director of programmes.
What prompted the change?
“I was aware of Well-Safe, but leaving the OGA and joining Well-Safe was not a single event,” he said.
“I had the opportunity to work with the OGA to deliver a number of things, including the cost estimate for decommissioning, and I did that.
“I enjoyed my time there, but felt the opportunities to deliver what the OGA wanted would be greater from outside government.
“I left on good terms. We need the OGA to be a good ally and I hope we are delivering their goals.”
Mr Christie feels he can have a bigger impact at a supply chain company.
He said: “Ultimately, the government isn’t carrying out the work. They set the regulations, then it becomes about implementation.
“It’s a slow process to change things. Even though I worked for an operator, Marathon Oil, for 30 years, I have always felt that innovation and speed comes from the supply chain.
“Suppliers are less risk averse than operators and government is even less risk averse again.”
Mr Christie is confident North Sea industry can deliver on the OGA’s target of reducing the decommissioning cost estimate by at least 35% to about £39billion.
He said: “I’ve been asked many times, ‘why 35%?’. That is the figure many other industries have achieved when they have embarked on a co-ordinated approach to solving problems.
“The automotive and aviation industries, for example, have all achieved 35% or more.
“I see no reason why we can’t continue to be innovative and match that number.”
So where does Well-Safe fit in?
Launched in July, the business has had a “hectic” start to life as it rapidly builds up its team and works on developing an offering which it can take to operators.
The firm intends to become a one-stop-shop for well plugging and abandonment (P&A), which is the most expensive aspect of decommissioning, accounting for about half of the cost.
Mr Christie said P&A was so expensive because of the location of the wells and the fact they are the most critical piece of the puzzle.
“It’s your connection to the reservoir – it’s the most critical piece and there are thousands of them out there,” he said.
“But does it need to be as expensive as it is? No.”
Well-Safe’s model is based on the idea of “continuous campaigning”.
The firm intends to work with multiple operators to build up a portfolio of wells, essentially an order book stretching well into the future.
It also plans to buy its own rigs.
If Well-Safe comes up against a challenging well which can’t be solved straight away, its team can move on to the next one before returning with a remedy. The team will also be kept together, which means that lessons learned should be retained.
Mr Christie said: “Our model is continuous campaigning, industrialisation of processes and continuous improvement and learning.
“Having a portfolio of wells is critical. We do not want to be tackling them one by one.
“Having a backlog means you’re not spending a lot of money sitting over a well. You can move the expensive equipment and personnel on to a well that you can resolve.
“We may want to start with some wells that are highly predictable so that we can get down the learning curve before tackling some of the older wells which have been there for 30-40 years.”
Mr Christie said gathering data and investigating the wells thoroughly before starting work would be crucial.
Because some North Sea wells are 40 years old and have changed hands several times, important data may have been lost.
Mr Christie said: “Data varies from operator to operator. After a sale, there is an obligation to pass data over.
“The best efforts would have been made to do that, but if you’re looking at hard copy data compared to electronic data, then that’s a challenge.
“Data management varies from individual to individual, never mind company to company.
“So it requires a level of care. There’s no guarantee that what’s shown on the paperwork is exactly what you’re dealing with.
“Even on topsides, you’ll go offshore with a drawing that shows what the topside should look like, but you get into a module and it’s different. It has been modified for good reason during the life of the asset, but it hasn’t been recorded on the drawings.”
Mr Christie also said industry cannot rely on a handful of innovative companies like Well-Safe to bring down costs by more than a third.
A lot of effort is going into developing technology, but that won’t deliver on the 35% alone.
A completely different approach is needed, with everyone involved.
Mr Christie said: “We need to have a decommissioning mind-set and get away from the exploration and production industry doing decommissioning.
“Industry has done operations and maintenance very well, but decommissioning is different and needs a different approach.
“Lowering of costs requires groups of operators coming together, sharing portfolios of wells and sharing learning so everyone is getting better.
“That will allow us to go from a fragmented approach to a co-ordinated one and make well P&A a repeatable process.”
While developing an integrated approach is unlikely to be easy, it is in everyone’s interests, just about.
Mr Christie said: “The costs associated with carrying out a project are driven by the prize at the end called hydrocarbons.
“With decommissioning, that prize is getting the job done safely and at a low cost.
“A key element is getting a decommissioning industry together with campaigns and operators working together because there is no competitive advantage for an operator in decommissioning.”
Time is on the operator’s side, however.
Mr Christie said: “I come from project background and found that working with a partner tended to slow everything down.
“In decommissioning you have flexibility of schedule – it becomes your friend rather than a con-
“If it takes a bit longer to get things done, but you get the job done safely and at a lower cost, you have been successful.”