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BSEE: Offshore decommissioning accelerates in Gulf of Mexico

By Nina Rach

The Bureau of Safety and Environmental Enforcement (BSEE) has Notice to Lessees (NTL) 2010-G05 defnes “No longer useful for jurisdiction over decommissioning of “idle iron” wells and structures, operations” which is used in the regulations for: pipelines, and the Rigs-to-Reefs program. Wells with no production for 5 years or no plans for future operations;

According to BSEE, there were about 2,996 production platforms on and the US Outer Continental Shelf (OCS), as of March 2013. Platforms that have toppled or have not been used in past 5 years for

Decommissioning

About 27% of the existing platforms (813) are non-producing operations associated with exploration, development, or production or otherwise ft BSEE’s defnition of “idle iron,” which means there of oil/gas.

are plentiful opportunities for companies that specialize in remov-

NTL requirements: ing structures and seabed debris. According to Dean Murphy,

Idle wells must perform one of the following within 3 years of making

DecomWorld, the decommissioning market is valued at US$30-40 the idle iron list: billion.

PA the well in accordance 250.1712 -.1717; or TA the well in accordance 250.1721; or Provide the well with downhole isolation. Within two years

Idle Iron directive of setting downhole plugs, they [operators] must either PA/TA the

On 15 September 2010, then-Secretary of the Interior Ken Salazar and well.

Bureau of Ocean Energy Management, Regulation and Enforcement

Idle platforms must be removed as soon as possible, but not longer

Director Michael R. Bromwich announced a new Notice to Lessees than fve years after it became no longer useful.

(NTL) requiring companies “to set permanent plugs in nearly 3,500 nonproducing wells … and dismantle about 650 oil and gas produc-

Implementation tion platforms.” NTL 2010-G05 went into effect 30 days later, on 15

BSEE is tracking companies’ compliance with their submitted idle iron

October, and companies were allowed 120 days to submit plans for abandonment plans.

decommissioning. Subsequently, 2011 was a record year for decom-

Inventory of idle iron at time of NTL issuance (9/15/2010): missioning activity in the Gulf of Mexico. • 3233 total idle wells

DecomWorld reported that 2012 was the second largest market • 617 total idle platforms.

for structure removal ($835 million), and the fourth largest year for

Current Inventory of idle iron (as of 2/22/2013): revenue generated through well abandonment ($737 million).

• 2016 total idle wells (including 260 newly idle since NTL)

Decommissioning strategy is driven not only by the Idle Iron NTL, but • 400 total idle platforms (including 62 newly idle since NTL).

also by the threat of hurricane activity, operator’s aversion to risk, and expanded budgets. Platform removal permits approved since Oct. 15, 2010:

Michael J. Saucier, feld operations supervisor in BSEE’s Gulf of • 770 total platform removal permits approved since the NTL

Mexico OCS regional offce, noted that some facilities topple during • Major structure – Platform containing at least 6 completions or hurricanes, risking pollution, and that it costs signifcantly more to contains more than 2 pieces of production equipment.

clean up, plug, and abandon a toppled well. Saucier said that BSEE

Well abandonment permits (APMs) approved since Oct. 15, 2010: received 97 idle iron plans, covering:

TA Approved 2388 (51%); PA approved 2324 (49%) = 4712 total TA/ – 3092 idle wells (96 %) of 3233 total idle wells.

PA permits approved since the NTL.

– 1056 expired wells (85 %) of 1246 total expired wells.

– 600 idle platforms (97 %) of 617 total idle platforms.

Pipelines – 259 expired platforms (89 %) of 292 total expired platforms.

Decommissioning pipelines is governed by 30 CFR §250.1750- 250.1754. Pipelines may be decommissioned when they do not

Regulations constitute a hazard or obstruction…unduly interfere with other users

Decommissioning activities in US waters are governed by Title 30 of the OCS, or have adverse environmental effects. Pipelines must be (Mineral Resources) of the Code of Federal Regulations (30 CFR) Part removed if the Regional Supervisor determines that the pipeline is an 250, Subpart Q and the following subparts: obstruction.

§250.1700 Defnitions (a) meansDecommissioning

Table 1: Gulf of Mexico Pipelines (1) Ending oil, gas, or sulphur operations; and

Status Miles (2) Returning the lease or pipeline right-of-way to a condition that

Active 24,126 meets the requirements of regulations of BSEE and other agen-

Abandoned 12,628 cies that have jurisdiction over decommissioning activities.

(b) mean structures, equipment, or objects…or marine Proposed to be installed 2409

Obstructions growth that, if left in place, would hinder other users of the OCS.

Proposed to be abandoned 2264 (c) means any installation other than a pipeline…that is Facility

Out-of-service 2425 permanently or temporarily attached to the seabed on the OCS.

Facilities include production and pipeline risers, templates, pilings,

Table 2: Pipeline permits, Jan. 1, 2010-March 19, 2013 and any other facility or equipment that constitutes an obstruction

Permits for: Received Approved such as jumper assemblies, termination skids, umbilicals, anchors,

Installation 369 546 and mooring lines.

Decommissioning 1367 1369 §250.1703 What are the general requirements for decommissioning?

Repairs 638 610

When your facilities are no longer useful for operations, you must: (a) Remove all platforms and other facilities.

Saucier acknowledged that BSEE will have to increase staff to meet enforcement challenges, and expects that continued development on §250.1711 When will BSEE order me to permanently plug a well?

the OCS will lead to more decommissioning activity.

BSEE will order you to permanently plug a well if that well: (a) Poses a hazard to safety or the environment; or

Note: Some data drawn from presentation by Michael J. Saucier, (b) Is not useful for lease operations and is not capable of oil, gas, or

BSEE Gulf of Mexico OCS Region, at 5th Annual Decommissioning & sulphur production in paying quantities.

Abandonment Summit, March 2013, Houston.

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