Optimisation of Offshore Structures Decommissioning – Cost Considerations

Abstract

The petroleum industry is currently being faced with a growing number of ageing offshore platforms that are no longer in use and require to be decommissioned. Offshore decommissioning is a complex venture, and such projects are expected to cost the industry billions of dollars in the next two decades. Early knowledge of decommissioning cost is important to platform owners who bear the asset retirement obligation. However, obtaining the cost estimate for decommissioning an offshore platform is a challenging task that requires extensive structural and economic studies. This is further complicated by the existence of several decommissioning options such as complete and partial removal. In this paper, project costs for decommissioning 23 offshore platforms under three different scenarios are estimated using information from a publicly available source which only specified the costs of completely removing the platforms. A novel mathematical model for predicting the decommissioning cost for a platform based on its features is developed. The development included curve-fitting with the aid of generalised reduced gradient tool in Excel® Solver and a training dataset. The developed model predicted, with a very high degree of accuracy, platform decommissioning costs for four (4) different options under the Pacific Outer Continental Shelf conditions. Model performance was evaluated by calculating the Mean Absolute Percentage Error of predictions using a test dataset. This yielded a value of about 6%, implying a 94% chance of correctly predicting decommissioning cost.