Well-Safe lands "step-change" decommissioning contract in North Sea
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Well-Safe lands “step-change” decommissioning contract in North Sea

By Sam Tabahriti 16 Sep 2021 (Last Updated September 16th, 2021 16:02)

It is believed the contract will secure work for 120 jobs on board the vessel and support positions onshore.

Well-Safe lands “step-change” decommissioning contract in North Sea
The contract is the first fully inclusive well decommissioning contract of its kind. Credit: Well-Safe Solutions

Starting in 2022, the Aberdeen-headquartered firm Well-Safe Solutions will plug and abandon (P&A) 14 wells in the Buchan and Hannay fields in the North Sea, using the Well-Safe Guardian rig as part of a multi-million-pound deal with Repsol Sinopec.

The contract is the first fully inclusive well decommissioning contract of its kind according to Well-Safe Solutions, and enables Repsol Sinopec and Well-Safe Solutions to manage efficiencies, knowledge, and cost.

Well-Safe Solutions is a decommissioning specialist and launched in 2017 to take the sting out of costly P&A. It describes itself as “ground-breaking” for its contracting delivery method and its approach to the safe and cost-efficient decommissioning of on and offshore wells.

The contract, hailed as a “step-change” from traditional, outcome-based models by the regulator and industry body Oil and Gas UK, will secure work for 120 jobs on board the vessel and support positions onshore.

Phil Milton, Well-Safe Solutions’ chief executive officer,  commented that this is a great achievement for the company: “Our team has worked closely with the team at Repsol Sinopec to develop a contracting delivery model that enables this project to be delivered in a manner that aligns with Repsol Sinopec’s decommissioning strategy, OGA’s decommissioning strategy, and Well-Safe’s P&A Club approach.

“With complete schedule control this enables us to optimise our efficiencies, retain learnings, and deliver a multi-operator, multi-well campaign.”

The self-proclaimed “ground-breaking” firm brings together a wealth of decommissioning oil and gas expertise and dedicated, bespoke P&A marine and land-based assets and equipment.

Well-Safe Solutions is the first-of-its-kind “Tier One” company with the complete P&A package, from front-end engineering and design through to project execution and the retention of key lessons to be fed back into future projects. It also believes that by combining competitive asset day rates and long-term service and support contracts at an “open book” day rate, they will be able to offer higher efficiency and utilisation at lower cost.

P&A accounts for about 50% of all decommissioning costs in the sector, and the Oil and Gas Authority has repeatedly made calls for campaign approaches involving multiple fields in order to reduce the sector’s £46bn decommissioning bill.

The principle of UK legislation on the decommissioning bill is that all oil and gas infrastructure installed or drilled on the UK Continental Shelf must be removed at the end of its life.

Back in 2020, Oil and Gas UK found that spending on decommissioning amounted to around £1.5bn per annum, meaning that decommissioning is an important and lucrative business for the UK oil and gas sector.

Decommissioning, alongside exploration, has become a normal part of doing business in the UK North Sea. Well-Safe Solutions wants to take away the need for multiple contracts with different providers and instead offers what it calls a “complete package” to meet the operators’ P&A requirements.

The firm will take care of the well engineering, planning, logistics, and execution of the P&A projects via a single contract.

José Luis Muñoz, Repsol Sinopec’s chief executive officer, said: “We are pleased the contract has been awarded to an Aberdeen-based company – the agreement will exceed the UK local content target, as set in the North Sea Transition deal, of over 50% for decommissioning projects.”