Siems_subbed.qxp 27/3/09 02:27 Page 63
Well Abandonment and Decommissioning – Current Issues
Figure 1: Upstream Capital Cost Index Figure 2: Upstream Capital Cost Index and Crude Oil Prices
300
2008 extrapolated
300 300
2009 cost index –
cost index
likely range
250 250 250
200 200 200
Upstream
cost index
150
150 150
Cost index
Cost index
100
100 100
Price per barrel (US$)
50 50
50 2009
average
0 0
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Upstream cost index Oil prices – inflation-adjusted
Source: Cambridge Energy Research Associates (CERA).
1 Inflation-indexed to 2007. Source: Cambridge Energy Research Associates (CERA)
1
and InflationData.com
13
number and strength of tropical cyclones (hurricanes) occurring in the infrastructure in the region – some of the earliest of which were
tropical regions of the Atlantic Ocean. The number of hurricanes that installed over 60 years ago – has significantly and permanently changed
develop each year has more than doubled over the past century, from the way in which abandonment and decommissioning plans and
an average of 3.5 hurricanes per year in the 25-year period from 1905 schedules are viewed by lease operators. Wind and storm surge from
to 1930 to an average of 8.4 per year in the 11-year period from 1995 Hurricanes Katrina and Rita in 2005 destroyed 113 of the nearly 3,800
to 2005. Greg Holland of the National Center for Atmospheric production platforms in the GOM,
6
with Hurricanes Gustav and Ike
Research in Colorado states, “We’re seeing a quite substantial increase destroying an additional 60 platform structures during the 2008
in hurricanes over the last century, very closely related to increase in hurricane season.
7
sea-surface temperatures in the tropical Atlantic Ocean.”
5
The collateral damage to platforms and associated infrastructure by
The increase in the quantity and strength of tropical storms passing wind and storm surge, commonly referred to as ‘downers’, causes an
through the GOM combined with the ageing oil and gas production increase in operating costs in at least two ways. The first is a direct
Maritime Montering is one of Europe’s largest
supplier of marine accommodation systems.
High quality, cost effective solutions and focus on customer
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Maritime Montering AS
Address: Bjorvikstranda, 6977 Bygstad, Norway
Tel: +47 57 71 60 00 • Fax: +47 57 71 60 01
E-mail: post@maritimemontering.no
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