Page 54: of Offshore Engineer Magazine (Jan/Feb 2020)

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FEATURE Decommissioning

LIABILITIES AND CHALLENGES

Speck says. This can happen if an asset owner folds, in

While it is necessary to decommission assets once they’ve which case BSEE will work its way up the chain of title reached the end of their useful life, Speck says, operators don’t seeking a previous owner to take responsibility for a liabil- want to spend any more on the operation than necessary. ity thought to be shed years before. “Decommissioning is a zero-pro? t effort,” Speck says. Speck cites a recent case where a pipeline was abandoned in “The more money you spend, the more money you spend. place in the 1990s, but the area was recently identi? ed as hav-

You’re not getting anything in return.” ing desirable sediment resources. As a result, BSEE noti? ed

As Boudoin puts it, decommissioning is the operator’s the former owner the pipeline must now be removed entirely. largest liability on the balance sheet.

THE POWER OF GOOD DATA “Having an accurate snapshot of that is very important” for the operators as well as their auditors, certi? ed public “With decommissioning, there are a large number of attorneys and equity investors, Boudoin says. unknowns,” Speck says.

One client wanted a full understanding of their decom- One of the best ways to minimize costs for decom- missioning liabilities in the Gulf of Mexico, where there missioning is minimize those unknowns by maintaining were more than 20 platforms, 60 pipelines and 200 wells. quality data about the assets. Over the years, he says, he’s “We reduced their total liability estimate by more than worked on projects where ? les have been inattentively kept $150 million,” Speck says. or worse, misplaced or damaged in ? oods.

One of TSB Offshore’s roles is to help operators deter- “The quality of the information will directly impact the mine how much and when to spend on decommissioning ef? ciency of the operation,” Speck says.

and help potential asset buyers understand the decommis- TSB Offshore relies on its Platform Abandonment Esti- sioning liabilities they may be taking on with the purchase. mating System (PAES) software to perform fast, repeatable

But sometimes even after an asset is sold, decommission- and detailed decommissioning cost estimates. PAES was ing liabilities can “boomerang” back to a previous owner, developed more than 30 years ago so it has gone through

Source: Generated by TSB Offshore based on BSEE data 54 OFFSHORE ENGINEER OEDIGITAL.COM