Comparative study of two cost assessment approaches to models for offshore oil and gas platform decommissioning

Abstract

Offshore oil and gas facilities have been developed for over a century. The current exploration, development, and mining technologies are already perfect. However, the offshore oil and gas facilities in the world's major offshore oil-producing countries face serious aging challenges and many are overdue for service. Moreover, many oil and gas platforms are in urgent need of decommissioning. The cost of decommissioning is one of the most concerning issues for energy companies and governments. This study compared two different approaches to cost assessment models built by using United Kingdom Continental Shelf (UKCS) decommissioned platforms: a model constructed using a popular top-down approach, and one created by a novel bottom-up approach. Both models use the completed decommissioning projects in the UKCS area as research and verification resources. According to the results, although the cost assessment model constructed using the bottom-up method is challenging, it has higher accuracy and more robust versatility. The top-down approach model is more suitable for governments and energy companies to make rough assessments of the market and projects. The bottom-up approach model is more suitable for a more detailed cost assessment of the decommissioning of individual facilities and can be integrated with results from other assessment models (such as risk and impact assessment models) to obtain more accurate cost assessment results. Both approaches have great room for improvement at present, and further integration of disciplines may be the key to breakthroughs in this field.