SHELLS P&A PERSPECTIVES

I-PARK P&A WORKSHOP

STAVANGER, 10TH FEB 2015

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Jan Sby
Norske Shell PT DL

Shell International Petroleum Co Ltd 1

 Decommissioning (incl. P&A) Liabilities High, and getting even
higher

18

16

14

12
$bn

10

For Shell, 70% of total cost is from offshore assets, with large part in UK and US.
Cost estimates are generally inconsistent across countries and tend to be on the low side => low
confidence in estimates.
Review in progress to get real costs based on new Cost Estimating Guidelines. Further cost escalation
is likely
Plugging of wells
Shell International Petroleumrepresents
Co Ltd a significant part of the
2 total cost
 BACKGROUND

Well Abandonment has previously been seen as something that will happen in
the future, no need to focus on it just now
Value generating activities usually got higher priorities, i.e. new wells before
abandonments
Abandonment Scope and Cost have been largely underestimated in the past
Currently increasing focus, abandonment campaigns initiated in various Shell
companies, more realism in estimates
Increased regulatory focus, the industry needs a push

Current Shell view

Large well portfolio, Shells WI Management system (eWIMS) carries >19,000
wells
Decommissioning and Removal (D&R) estimates > $ 20 billion (Shell share in
operated assets) and increasing
D&R Estimates and Asset Value are directly linked to P&A Performance
Internal Technology development effort is low, not seen as a major enabler

Shell International Petroleum Co Ltd 3

 PDO (Oman) Well Abandonment Dimensions
PDO Historical (and future) Drilling Activity Future Well Abandonment Profile
400 14000
300 7000
350 12000 Wells to be abandoned
6000

No eells abandoned annually

250
Cumulative abandoned wells

Cumulative wells to be
300

Cumulative nos wells

10000 5000
Nos wells per year

No wells 200 Average: 135 wells abandoned

abandoned
250
Cum wells annually next 44 years 4000
8000
200 150
6000
3000
150 100
2000
4000
100
50 1000
50 2000
0 0
0 0

07

10

13

16

19

22

25

28

31

34

37

40

43

46

49
20

20

20

20

20

20

20

20

20

20

20

20

20

20

20
56

61

66

71

76

81

86

91

96

01

06

11

16

21

26

31
19

19

19

19

19

19

19

19

19

20

20

20

20

20

20

20
Year
Year

PDO Historical Abandonment Activity It will take 4 hoists to work continuously for around 75
140 700 years to abandon a well stock of 9000 wells (i.e. expected
120 600
well stock in 2020).
No abandoned wells
Cum abandoned wells
Cumulative nos wells With 20 hoists in continuous operation, it will take around
100 500
15 years to abandon the same well stock.
Nos wells per year

80 400 Total abandonment cost for PDOs well stock in 2020 was
estimated to $ 1.8 bln. Unless continuous abandonment
60 300
with most of the expense occurring at the end of
40 200 production life or concession period when the revenue
stream is low.
Campaign in 2007-2009: P&Aed +/- 250 wells with ring
20 100

0 0
fenced team and 4 dedicataed hoists
56

61

66

71

76

81

86

91

96

01

06

19

19

19

19

19

19

19

19

19

20

20

Year
Avg. Abandonment time/cost per well: 14 days/$ 0.2 mln
Continued focus and continuous abandonment is
Shell International Petroleum Co Ltd 4
required
 WHERE ARE WE NOW? BRENT P&A and DECOMMISSIONING
Four platforms Northern
Gas Line
D
142 wellbores & 240 sidetracks, near 1000 km of wellbore, 30+ yrs old Oil to Sullom Voe

Platform rigs used for operations (through tubing abandonment not C

possible in most cases), extensive refurbishment was required B

Western
Plug & Lubricate operations performed offline where possible Gas Line A
Penguin tieback
15 year campaign (if single rig) Ninian Gas

Gas to St. Fergus

Brent Delta Plug and Abandonment
Started in Dec-2008.
BC BB BA
BD
All wells abandoned (48 wells)
25 conductors pulled with main rig
Brent Bravo Plug and Abandonment
Started in Jan 2011: 17 of 38 wells abandoned
Brent Alpha Plug and Abandonment
Due to commence 2016
Brent Charlie Plug and Abandonment
Due to commence 2017 The unseen
Shell International Petroleum Co Ltd 5
scope
 Brent field abandonment philosophy
Three barriers Barrier concept
Philosophy

Characterise
the wells
Prepare the
Rig
Contracting
Strategy

Execution

Challenges

Continuous
Improvement

Key requirement: Restoring the cap rock. Top, mid and reservoir barriers.
Comply with Regulations, Standards and Guidelines for well suspension and abandonment.
Wellbore and annulus barriers need to be restored and verified
Well integrity compliance: Acoustic and Ultrasonic logs to assess bond.
Section milling is the preferred method for achieving annulus isolation
Shell International Petroleum Co Ltd 6
ITS ALWAYS HARDER THAN YOU THINK

Major Risks.
Scope creep as we begin to
work old Wells (Poor cement
bonds)
Surprises from old wells (live
annuli, bad corrosion)
HSE & Process Safety Risks
with ageing platforms &
infrastructure (Single barriers
on wells)

Shell International Petroleum Co Ltd 7

7
 Challenges

Casing section Corroded/collapsed tubulars

milling swarf
Dual section milling
handling

Well Structural Integrity Tension

table required to support BOPs Fishing operations

Shell International Petroleum Co Ltd 8

UNPREDICTABLE OPERATIONS
Brent Bravo Well Times
180.0

170.0

160.0

150.0

140.0 NPT outwith Well Operations control

Well Ops related NPT
130.0
Scope Growth
120.0 Clean Time
Crane failure + Platform
110.0
Top Drive damaged when Shutdown
100.0 pulling casing.
Days

90.0

80.0 Tubing sheared + fishing operations

Well not P&Ad

70.0

60.0
Premature Corroded
50.0 Cement tubing
40.0
Setting

30.0
Corroded
20.0 tubing
10.0

0.0
BB30 BB23 BB35 BB37 BB21 BB25 BB20 BB12 BB11 RESTRICTED
BB09 BB19 BB08 BB10 BB06
Brent P&A Performance Improvement Staircase

Most efficiency improvements expected in planning and work

processes
New Technology not seen as a major enabler, but will contribute to
efficiency improvements and cost reductions
In the performance and efficiency improvement staircase, there is no
room for compromising the quality of the abandonments
RESTRICTED
 DRAUGEN P&A CONSIDERATIONS

Asset in production since 1993, now Generic P&A Schematic

tail end production
Developed with 24 wells, platform
and subsea producers, water
injection, gas injection
Draugen P&A Strategy:
Platform wells: at end of field life
(need to install costly rig on
platform)
Subsea wells: on an opportunity
basis
Maintain wells if WI issues
Developed Draugen Abandonment
Philosophy
More complete view, incl. Subsea
scope (disconnect, flush and
removal)
3 obsolete subsea wells with
Integrity issues matured for
abandonment
Available rig time on West Navigator
and TransOcean Barents
A-53 and A-58 abandoned in 2014
A-55 to be abandoned in 2015
Significant learnings from each job
RESTRICTED
 Key Success Factors and Technology Areas
Ball-
activated
circulating
Fit for purpose rig/vessels and tools, no need for expensive rigs
sub
Under-
Larger Abandonment Campaigns will give steep learning curves
reamer
and continuous efficiency improvement
Use of dedicated ring-fenced resources and earmarked budgets
Maximise use of Light well intervention vessels, offline operations
and rigless techniques, e.g. for well pre-work
Milling tool Improve conventional section milling, multiple casing milling,
improved tool designs
Qualification of alternatives for annulus barriers, new barrier
material
Prove concept of squeezing shale as accepted barrier
Bridge plug Use of combination barriers instead of two barriers
Verification of annulus barriers, CBL/acoustic logging

Planning, Planning, Planning

Bridge plug
setting tool
One-trip milling system 3 runs reduced to 1 run
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Shell International Petroleum Co Ltd 13