Gulf of Mexico deepwater removals still “in infancy”, says new report

A new report suggests that the industry will shortly have to face the challenge of decommissioning and well plugging and abandonment in the deepwater Gulf of Mexico (GOM).

To date only seven structures have been removed from water deeper than 500 ft but in those depths the same number of structures now stand on expired and terminated leases and will require decommissioning in 2013-2014, a new report warns.

In water depths greater than 500 ft, Apache had two structures on terminated leases before it sold its assets to Fieldwood, and Shell, Unocal, SandRidge and Stone Energy each have one structure on terminated leases, according to this year’s Gulf of Mexico Offshore Decommissioning Report, 2013-14. (Access a free extract here.)

Anadarko has one structure on an expired lease in 5,155 ft water depth.

Overall in the deepwater GOM there are 31 wells situated in leases that are expired, terminated or have been relinquished.

Meanwhile, the industry’s experience of deepwater decommissioning is limited.

Since 2009 only four deepwater fixed platforms have been removed. One of those, Chevron’s Typhoon mini tension leg platform, was reefed after being destroyed by a hurricane.

“Removal activity in the deepwater GOM is in its infancy,” writes report author, Prof. Mark Kaiser.

In 2010, Chevron removed a fixed platform in 685 ft of water, and in 2011 removed a structure in 620 ft water depth.

In 2010, Sojitz Energy removed a fixed platform in 582 ft water depth. In 2009, BP removed a fixed platform in 530 ft water depth.

But clearly the industry will need to face the challenge, the report suggests.

In water depths greater than 500 ft there are currently 65 producing structures and one auxiliary structure, with two structures being idle for five years or more, and five structures idle less than five years.

Shell operates more deepwater structures and wells than any other operator in the Gulf of Mexico – 10 structures and 319 wells.

The fourth edition of The Offshore Decommissioning Report, 2013-14, prepared and written by Prof. Mark Kaiser of Louisiana State University, offers comprehensive insight into transactions, deep- and shallow-water inventories and other key GoM market data. Access your free extract here.