More than 7,800 wells were drilled on the UK continental shelf over the 50 years through to the end of 2017.
According to the Oil and Gas Authority (OGA), this actually required the drilling of in excess of 11,900 wellbores, including sidetracks.
It has been calculated that around half of all wells drilled are still active, of which some 3,000 are development wells, but with about 3,500 wells of all types plugged and abandoned to date.
The balance of ownership has changed across the decades, becoming more diverse over the past 20 years especially.
The UKCS today has 12 companies operating 77% of the development well stock – each holding between 100 and 350 wells – and 60 further companies holding the remaining 750 wells.
The OGA’s first Wells Insight Report notes too that:
• More than 600 wells, around 30% of existing active well stock, are currently shut-in and well surveillance and intervention rates are low at 8% and 14% respectively;
• Well abandonment activity has increased four-fold since 2016, with a similar forward trend predicted, with more than 150 wells per annum being plugged and abandoned;
• There are 240 suspended exploration and appraisal wells, which require permanent abandonment, with 12 operators holding 70% of the well stock.
All of the above wells, plus those yet to be drilled, have to be abandoned and it must be carried out in an orderly, controlled manner.
Despite there being many more operators today, OGA operations director Gunther Newcombe believes significant efficiencies can be achieved. But there are also many challenges to overcome if there is to be an orderly exit and this looks set to run for at least 50 years.
Mr Newcombe, who used to work for BP and was vice-president for decommissioning for five years, overseeing NW Hutton’s dismantling, said the best time to do production well plugging and abandonment (P&A) is during the late life of a field, not after production has ceased.
Of the two well families, production wells are in the majority, but the 240 open-water exploration and appraisal (E&A) wells are also very important.
“The average age of those E&A wells is 27 years,” Mr Newcombe said. “They’re all temporarily abandoned, not permanently.”
However, some date back to the start of UK offshore exploration. It’s the sort of thing that the OGA will no longer brook and, to drive the point home, the offshore industry’s regulator has just published external guidance for well suspension.
“This doesn’t currently exist as a guidance document,” he said. “It basically says that we will provide operators with approval to suspend a well for up to two years.
“What it also says is that, if you have a well that’s been suspended for more than two years, you need to come to us with a plan for what you’re going to do about it. You can’t just leave it.
“What I want to make clear is that this doesn’t mean that everyone has to abandon 240 E&A wells within two years.
“We’re looking for operators to come back with a plan for such wells. And when we talk about a plan, it includes the option of operators potentially working with others through co-ordinated rig programmes.
“What we don’t want is a rush leading to higher costs. But what they do need to do is come to us and say: ‘OK, we realise that we have wells that have been suspended for more than two years.
Here’s our plan for what we actually want to do’.
“We will listen to the plan if it makes sense. If, for example, a company says it needs another five years because it wants a well to become a part of a bigger, regional E&A programme working with other operators we could go along with the proposal.
“If it’s a good reason then that’s fine. If it’s not, then the operator will have to deal with the well.
“We don’t want to precipitate panic. But at the same time we want them to come to us with a plan.
“At the moment, what we get every year is an ‘Oh, can we please extend this suspension for another year?’
“It’s simple; what we’re looking for is a plan, not just, ‘Oh, can we move it to the right?’ Those days are gone.”
Nearly 80% of those 240 or so wells lie with seven or eight operators – mostly majors that have sat on them for a very long time.
The OGA estimates that this portfolio of E&A wells adds up to about £500 million in decom costs at present. Ad hoc abandonments are expensive, which is why Mr Newcombe’s call for companies to co-ordinate abandonment efforts makes sense as that should deliver economies of scale.
However, whether the focus is E&A wells or the much larger population of production-related wells, his message is clear. Work together where possible and learn from the experiences of others, past and current.
“We’re obviously working closely with all of the operators that hold onto the majority of well stock that is due to be abandoned in the coming years to make sure that lessons are learned and that people are working together,” Mr Newcombe added.
“Also, for instance and as an example, in the East Shetland Basin there are many hundreds of wells and the overall decommissioning cost is £8bn.
“Half of that is well P&A. So we’re working with Taqa, Total, EnQuest and CNR to look at the big picture. In fact, we’ve been working with those four operators for at least nine months. They’ve formed a number of work-groups that are looking at various issues, not just decom.
“In parallel, we’re talking toTier-2 operators regarding their decommissioning stock and offering benchmarking to help.”
According to the insights report, decommissioning operators in the northern North Sea have improved platform well P&A costs very significantly, through a combination of new technology, leveraging batch P&A methods, de-risking through wellbore surveys when setting mechanical reservoir plugs, improved casing milling performance and using risk-based methods when defining scope.
But it reports wide variations in operator performance, with certain operators having large fractions of their outcomes in the third and fourth quartiles, and other operators predominantly in the first and second quartiles.
It notes that, while platform well P&A costs have also improved in the southern North Sea, these are much more incremental in nature. The obvious difference is that all platform well abandonments in the SNS are carried out via jack-up rigs rather than platform rigs.
In 2016, £402 million was spend on 76 abandonments while, last year, £446 million was spent on 163.
Fortunately, a “dramatic decrease” in average P&A cost is reported – a direct result of operators and contractors getting a lot smarter.
“We have a microsite on OGA’s website which is all about decom lessons learned,” Mr Newcombe said.
“So you can go in and benchmark the cost of your well using the information and tools provided. You can see what a P50 cost should be based on real stats.
“And if somebody comes to us saying ‘here’s our well decommissioning programme and’ we see that their costs appear way out, we tell them that there are other operators doing similar well abandonments for half the cost. Do they know that? Most of the time they don’t. It’s about not doing things the hard way when it’s clearly not necessary.
“We connect people up. We connect operators that can demonstrate good performance with others that want to learn and vice- versa. So when a decommissioning programme comes in we use that benchmark process and we work with them.
“We talking to operators that have a decommissioning programme coming up and ask to look at their intended plan.
“We ask whether they have picked up on lessons learned by others.
“Happily, there’s tremendous collaboration between the operators over the entire decommissioning cycle and not just the wells piece. This sort of thing helps with the efficiency of well abandonment.”
How are the standards set? Whose rulebook do they use?
To be clear, it is not the OGA but trade body Oil and Gas UK (OGUK) that publishes the guidelines to which the industry works. However, ultimate primary responsibility currently lies with the Health & Safety Executive.
“What we do look at, however, is technology,” Mr Newcombe said. “On that side one of the key pieces of work ongoing is the thermite plug, with the Oil and Gas Technology Centre (OGTC) leading and which is currently being trialled onshore UK.
“There’s also the bismuth plug that’s just been run by Aker BP in the Norwegian sector on Valhall. We’re looking at new technologies such as these as alternatives to the classic cement plugs.”
Mr Newcombe is confident that decommissioning work is pretty joined up between the UK and Norway.
“The work that’s going on is really well connected in my opinion,” he said. “For instance the bismuth plug project is receiving sponsorship through the OGTC even though the trial was in Norway. We’re not relearning what others have already learned. Our people meet with the Norwegian Petroleum Directorate regularly.
“On top of that the supply chain is looking at regional well P&A programmes for operators involving specialist firms such as Well-Safe Solutions.
“We’re trying to support the supply-chain, which is a key part of the decommissioning effort. There’s also a taskforce that has a wells representative on it. There’s Decom North Sea too. OGUK also has representatives from other work groups who are in the decom taskforce. Everything’s connected.
“This is really important; facilitating connections is one of the OGA’s roles and it’s a really active agenda.
“Don’t forget, well costs to the UK are in the order of £24bn; that’s 43% of overall decom costs. So we have an eye on it big-time across all fronts.”
But one aspect that’s not being examined and worked on by anyone it seems is the minimum life expectancy of a plugged and abandoned well? In essence, returning the well to nature in perpetuity.
There are leaking wells around the world, including in the North Sea.
European scientists have said the thousands of wells drilled in the North Sea could constitute a “significantly more important source of methane, a strong greenhouse gas, than previously thought”.
According to research, shallow gas migration along wells may release around 3,000 to 17,000 tonnes of methane from the North Sea seafloor per year and is considered to be a “significant contribution to the so-called North Sea methane budget”.
This type of leakage is currently neither considered by operators nor regulators, but could be just as important as fugitive emissions through damaged wells, which are usually recognised and quickly repaired.
Mr Newcombe said there’s natural leakage of methane and oil worldwide.
That said, he’s interested: “I think it would be a very good idea to do a statistical analysis of plugged and abandoned wells. However, it’s not in OGA’s remit.
“I’m not aware of any statistical analysis having been done.
“What we know from the UKCS, which is more qualitative than quantitative, we’re only aware of one well that has leakage. All I can say is that it’s a rare occurrence right now.
“I’m a geologist by background and this is my personal view. Will the decommissioned wells of today still have integrity in hundreds of years’ time? I honestly don’t know.”