First rig to be acquired by Well-Safe

Silhouette of an oil rig
Oil and Gas UK published a business outlook report earlier this week

Fledgling decommissioning firm Well-Safe Solutions is close to tying up the acquisition of its first rig a year on from its launch.

Chief executive Phil Milton said the purchase of a semi-submersible rig was at an advanced stage and that talks were ongoing for two other assets.

Well-Safe is also tendering for well plugging and abandonment (P&A) contracts with North Sea operators and in Europe.

Mr Milton, who was involved in the P&A campaign on CNR’s Murchison field, said the company had come a long way in its first year.

At the time of its launch in summer 2017, Well-Safe said it would invest £200 million in marine assets and create 400 jobs in three years.

It currently has 35 employees and has secured a 40,000 sq ft marine and logistics base in Dundee.

Mr Milton said a “lot of money” had already been invested, though the greater part of the £200m spend will come when it starts buying rigs.

The shopping list currently includes onshore land rigs, two semi-submersibles and potentially two jack-up rigs, as well as a light intervention mono hull vessels and support vessels.

Well-Safe intends to buy second-hand to keep costs down, but the assets will require a degree of modification.

Mr Milton acknowledges that start-ups can only carry on spending for so long without winning major contracts.

He said: “All these investments are clearly driven by collaboration with industry and operators committing to our programme of work.

“If they don’t commit, we won’t invest the money. Therefore there’s only a defined period of time when we can continue to invest.

“We’ve put a lot of money in already but we need operators to work with us to go forward.

“We’ve certainly got a year in front of us before we have to reassess the strategy or approach. If there’s not much forward movement we’d need to take another look.”

The early signs indicate that Well-Safe’s positive start to life will continue, however, as feedback from industry has been very good.

Mr Milton is hopeful that one of the tenders will result in a first P&A contract award before the end of this year.

The company also has a revenue stream in the form of consultancy and engineering work in the UK.

“We have contracts and are doing engineering work for people in Aberdeen and the UK, so we have
revenue,” Mr Milton said.

“Our teams are running a number of consultancy and engineering projects for operators in the UK, so business is progressing.

“But to get where we want to be we need support from industry. We have to build and put the foundations in place.”

Mr Milton said Well-Safe had received a positive response from industry for its “P&A Club” model.

Each club will have a different type of decommissioning asset at its disposal, for example, land rigs for onshore wells, or jack-ups, semi-
submersibles, intervention vessels and deepwater assets for offshore wells.

Well-Safe intends to build up a backlog of wells with various operators.

It will then tackle a large number of wells as part of a single campaign, rather than decommissioning a small number at a time.

The approach would cut down on mobilisation costs and save time.

Well-Safe’s engineering team would also be kept together to retain the lessons learned from previous jobs, leading to lower costs.

The company’s primary focus is on UKCS decommissioning, but its approach has also attracted interest from continental Europe, where huge numbers of onshore wells will need to be abandoned.

Norway could also become a happy hunting ground.

Mr Milton said: “Norway is an area we’re looking to move into when the time is right. If you look at the maturity of the basin, there are more wells coming to an end in the UKCS than NCS.

“The UK is further ahead. That helps us learn how to deliver P&A efficiently and export it around the globe.

“Lots of parts of the world look to the UK and how we are doing decommissioning. The way we do P&A here can be transferred anywhere else.”

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