When your company holds equity in wells, either as an E&P operator or joint venture partner, we can assist in establishing the strategies how to best manage the forward plan of abandoning wells and decommissioning assets. We have been involved in defining country wide and corporate strategies and road maps for decommissioning projects.
Maximising key opportunities
A well defined planning strategy identifies opportunities and challenges to optimally managing future abandonment expenditures, integrated with late life asset management, and bespoke approaches for execution. There are a significant number of boundary conditions that have to be acknowledged, ranging from legal, environment, condition of asset components, E&P operator and supply chain expertise, production timing, and of course financial and commercial positions.
A key opportunity often missed out on is an early start of planning, perhaps as early as five years before cessation of production albeit as an intermittent effort. The planning complexity is often underestimated. A late start allow fewer opportunities to be matured, which are mostly also the ones with the highest impact.
Abandonment Expenditure
Obviously, well abandonment is an investment without return (returns have been enjoyed prior). A successful well abandonment will allow removal of liabilities from the financial books, which can improve credit rating and associated access to operating funding. It is a key target in execution that actual cost are below the estimated liabilities in the financial books; this is mostly not achieved by a trial and error; ensure expertise is attracted right from the start so all opportunities of multi-year decommissioning campaigns can be harvested to their fullest extent.
