No abstract

To explore, delineate, and produce hydrocarbon reserves, holes must be drilled into geologic formations. During the course of production, wells may become inactive because of diminished economic returns or technical problems, and be shut-in or temporarily abandoned. At the end of the life of every well, the well will be permanently plugged and abandoned (P&A). The P&A process is the first stage of a decommissioning program in which a site is returned to its original greenfield status in accord with regulatory requirements. The purpose of this paper is to describe the factors that influence P&A operations and summarize cost statistics from a sample of 118 jobs and 390 wells performed by Tetra Applied Technologies in the Gulf of Mexico from 2002-2003. Descriptive statistics are summarized and the impact of learning and scale economies are examined. Regression models are derived that estimate the cost of P&A activities based on job characteristics.

Decommissioning represents the end of the production life cycle of offshore structures, when wells are plugged and abandoned, infrastructure is removed and the site is cleared of debris. Decommissioning operations are generally routine, involving standard, low-technology methods, over distinct stages and relatively short time horizons. The removal of the topside facilities, deck, conductors, piles and jacket is the core of all decommissioning projects and typically the most expensive stage. In this paper, we examine the cost of removal operations in the shallow-water Gulf of Mexico for operations performed by Tetra Applied Technologies LLC between 2003-2008. Our data set consists of 120 projects representing $178 million in expenditures and is the largest group of decommissioning operations to be analysed in the Gulf of Mexico. We summarise cost statistics for removal operations and describe the factors that impact cost. We examine preparation, pipeline abandonment, and removal cost across several levels of categorisation and develop first-order regression models for the cost of removal. [