NEWS
Issue No. 2
October 2010
www.decomnorthsea.com
Offshore Oil & Gas Decommissioning
– Contracting Strategies
It is generally recognised that collaboration is going to play an
increasingly important role in the decommissioning sector over the coming
decades. It is therefore entirely appropriate that Decom North Sea should
practice what it preaches!
Fig. 1
Decom North Sea is facilitating
the industry discussion on the
contracting strategies and
models used to manage major,
complex
decommissioning
projects. In support of this
initiative we teamed up with The
Robert Gordon University (RGU)
and Accenture in a project
designed to provide fresh,
independent and unbiased
research, analysis and thinking
on this somewhat, sensitive
issue.
Our partnership was set up as follows. Decom North Sea articulated the general
industry situation relating to decommissioning contracting strategies, and with
input from Chris Gray of ConocoPhillips we set the strategic ambition for the
research. A team of eight oil & gas MBA students at RGU undertook research with
a range of operators, major contractors and service specialists, followed by a
thorough analysis of the data obtained. On Tuesday 7th September the team
presented their findings to an audience of nearly 50 people, most of whom are
Decom North Sea members. Accenture provided sponsorship for the whole project,
supported the students by coaching throughout the course of the twelve week
project, and kindly agreed to share the findings of the study with Decom North Sea
members. A good example of a win-win-win.
Contents
page 2
Director’s foreword
Membership of Decom North Sea
Decomnorthsea.com
Future newsletters
page 3
New Directors Elected at AGM
page 4
Strong turn out for first members’
event
page 5
Forthcoming DNS events and
Taking account of the strategic drivers (see Fig. 1) which influence which
contracting strategy and model is most appropriate, the students analysed the
various contracting strategies (In house, Tier 1, Heavy lift, Project management and
collaboration) against operator and contractor value drivers. They then compared
this with the traditional contracting models of Lump Sum and Cost Plus and
suggested alternative contracting models which could meet both operator and
contractor value drivers.
The presentation by the students at the September workshop was excellent, and
attracted very complimentary remarks from the industry professionals in
attendance. The project has provided Decom North Sea with a valuable perspective
that is recognised as being independently researched and analysed, and which
makes some realistic recommendations on possible future development of
industry models. These recommendations will now be discussed and debated at
the October decommissioning conference in Dunblane, which in turn could
possibly lead to the identification of a model that could be worked up by industry
experts for adoption on future projects and programmes.
exhibitions
pages 6 and 7
Members News:
Proserv Offshore, CSL, People=Positive
and DSL
page 8
Member Listing
page 2
Decom North Sea News
Director’s foreword
Membership
of
Decom
North Sea
As you may be aware, in the last two months since the first Decom North
Sea newsletter we have increased our membership to over 80 member
companies and the events programme for 2010 is well underway.
We held our first event for members at the Marcliffe hotel in Aberdeen where
around 100 members attended to hear about BP’s North Sea
decommissioning plans, our first annual general meeting saw the election
of seven new directors and the first offshore decommissioning conference
was held in Dunblane, Scotland.
It is very encouraging to see growing interest in Decom North Sea from a
wide range of oil and gas supply chain companies across the UK and Europe
as we continue to build a complete picture of North Sea decommissioning
activity through the supply chain matrix and with new contracting models.
We are also looking to strengthen the link between operators and supply
chain companies to provide our members with the information and
knowledge that they need to capitalise on future business opportunities
decommissioning presents and to be able to demonstrate to Government,
regulators and taxpayers that we are doing all we can to build UK capability
and meet decommissioning obligations in an efficient way.
It is our priority to create a vibrant, competent and competitive North Sea
decommissioning supply chain – with your ongoing support and
commitment to Decom North Sea we are confident that together we will
achieve this.
My role as a director of Decom
North Sea is to speak to
members in order to ensure
that we are offering the best
possible support to all
member companies and truly
representing your interests
and issues in the activities we
undertake. This is a very
important task as it is vital that
we at Decom North Sea
understand your needs and
fulfil your membership
aspirations. I am looking
forward very much to
meeting you all over the next
few months.
Alex West
Wood Group
Future newsletters
We welcome contributions from our members for future newsletters
so please send your news and photos to
SHillyear@decomnorthsea.com
We hope by sharing your experiences and successes in the
decommissioning sector with fellow members and the wider
decommissioning industry, further useful connections will be made.
Full membership of Decom North Sea is open
to any commercial organisation involved with
decommissioning. Associate membership is
open to non-commercial organisations and
individuals who wish to be kept informed of
Decom North Sea activity and attend networking
events and conferences.
Benefits of joining Decom North Sea include,
amongst others, :
•
•
•
•
•
Access to operators and major contractors to
understand their future decommissioning
plans and supply chain needs
Opportunity to present and promote your
company at Decom North Sea events
Access to market intelligence reports and
business opportunities
Opportunity to participate in specialist
working groups e.g.
(a) to look at the various contracting
strategies for decommissioning;
(b) packaging of decommissioning projects
Discounted rate for Decom North Sea events
More information on member benefits and how to
apply to join Decom North Sea can be found at
www.decomnorthsea.com
Decom North Sea News
page 3
New Directors Elected at AGM
Seven new directors from across all sectors of the decommissioning industry were elected onto the board of Decom North
Sea at the first annual general meeting, held in Aberdeen on September 14.
The meeting heard that Decom North Sea now has 82 members and has revised the target number by the end of the year from 70
members to 100.
Chairman Murdo MacIver, director of Peterson SBS, opened the agm and thanked directors and members for their time and support
and urged other companies to join the body to ensure the UK supply chain benefits from the £25-30billion worth of
decommissioning work forecast for the North Sea over the coming decades.
Brian Nixon, Decom North Sea’s chief executive, said in his report at the meeting: “We are delighted that the members cover all
sizes of companies and represent the breadth of the supply chain. At the moment, membership is a bit skewed in favour of Scotland
- which is really to be expected because of where clusters of companies are located - but we have had encouraging interest from
England and the Continent.
“We have been overwhelmed by the reception we have had from industry and believe we are well on track to reach 200 members
by the end of 2011 and that will make us genuinely representative of the supply chain.’’
Mr Nixon also gave details of the supply chain matrix being created by Decom North Sea at present. The online facility allows
operators and major contractors to access in-depth profiles of member companies providing specific decommissioning services,
their skills, capabilities and track-records.
“This will help suppliers to promote themselves to operators and major sub-contractors that might not be aware of them and might even
help avoid the need for the pre-qualification stage,’’ he said.
New directors are BP decommissioning vice-president Gunther Newcombe, Halliburton director and country manager for project
management services Tom Leeson, Marine Subsea managing director Alasdair Cowie, AMEC’s head of decommissioning
Roy Aspden, BIS Salamis (M&I) operations director Nigel Lees, Proserv Offshore vice-president group business development
David Dent and Eddie Grant, managing director of Bluegrass Decommissioning Services
They join existing directors Mr MacIver, Alex West, of Wood Group, Bill Yuile, of PSN, Donald Michie, of Asco, Kare Kristing, of Design
Alpha, Mark Stanley, of Veolia Environmental Services, and Simon Coles, of Babcock International Group.
page 4
Decom North Sea News
Strong turn-out for first members’ event
More than 100 senior industry figures gathered in Aberdeen to hear first hand about BP’s decommissioning activities at
Decom North Sea’s first event for its members.
Gunther Newcombe, BP vice-president of Decommissioning, addressed attendees at the member-only event which was held at the
Marcliffe Hotel and Spa.
BP has already successfully completed the removal of North West Hutton, the first of the large fixed steel jacket installations to be
decommissioned in the North Sea and is currently progressing decommissioning for the Miller and Don Fields. Gunther shared with
the audience BPs plans for these two decommissioning projects, their contracting strategies and how the supply chain can engage
with BP in relation to decommissioning.
DNS Chief Executive Brian Nixon said: “We were delighted so many of our members benefitted from an excellent opportunity to
hear directly from BP about the work they are planning in the North Sea, as well as from the fantastic networking platform.’’
“Feedback from this event was excellent and Decom North Sea are currently developing a series of similar events”.
Decom North Sea News
page 5
Forthcoming DNS events and exhibitions
Pilot Share Fair 12, Aberdeen, 3rd November
PILOT Share Fair 12 provides the chance to be among the first to hear about the latest UK oil and gas business development
opportunities from the major oil and gas players, both from the operator and contractor communities, who will unveil their 18 month
forward plans for projects in the UKCS at the event.
Decom North Sea will be exhibiting at the Pilot Share Fair and would be pleased to discuss Decom North Sea in more detail with
potential new members and catch up with current members.
To find out more about the Pilot Share Fair and to register to attend go to
http://www.oilandgasuk.co.uk/events/pilot_share_fair.cfm
Decom North Sea and NOF Energy Networking event, Durham, 11th November
Decom North Sea and NOF Energy are holding a decommissioning themed networking lunch. This will
include an update on Decom North Sea as well as a presentation from Jim Niven, Stakeholder Manager,
Shell on Shell’s decommissioning plans and timescales; contracting strategies; supply chain engagement and
any issues they are facing. This event is open to both members and non-members of Decom North Sea and
NOF Energy. For more information and to register for this event, contact shillyear@decomnorthsea.com
DecomWorld 7th Annual North Sea Decommissioning Conference, Aberdeen,
16th & 17th November
This conference is set to tackle the key issues which are at the heart of the North Sea Decommissioning Industry.
Decom North Sea will be presenting on the ‘Strategy for Supply Chain Mobilisation’.
For more information and to book your place visit http://www.eyeforenergy.com/nsd/index.shtml
Oil and Gas Supply chain Management Conference, London, 29th & 30th November
SMi’s forthcoming Oil and Gas Supply Chain Management conference will address challenges, innovation, solutions and lessons
learned, as influential players from the oil and gas landscape come together to understand how to generate value, create efficiency
and improve productivity.
Decom North Sea are presenting at the conference on ‘Decommissioning Supply Chain Development’.
For more information and to book your place visit www.smi-online.co.uk/supplychain17.asp
Decom North Sea members are eligible for a 25% discount off the delegate rate, please contact Andrew Gibbons on
+44 (0) 20 7827 6156 to receive the discount.
Decom North Sea and The EIC Networking Event, London, 24th January
Decom North Sea and The EIC are holding a decommissioning themed networking event. This will include an update on
Decom North Sea as well as a presentation from Jim Niven, Stakeholder Manager, Shell on Shell’s decommissioning plans
and timescales; contracting strategies; supply chain engagement and any issues they are facing. This event is open to both
members and non-members of Decom North Sea and The EIC. For more information and to register for this event,
contact shillyear@decomnorthsea.com
Future Decom North Sea member’s only events
Decom North Sea is currently in discussions with a couple of operators regarding presenting their decommissioning
plans, strategies and issues and is looking at setting dates for these in early 2011 – information regarding these events
will be circulated to members of Decom North Sea over the next few months.
Decom North Sea is also keen to hear from other operators and major contractors who are willing to share their
decommissioning plans, strategies and issues and would be interested in hosting an event for Decom North Sea
members. To discuss this opportunity in more detail please contact Sarah Hillyear on 01224 224131 or
shillyear@decomnorthsea.com
page 6
Decom North Sea News
Members News
Proserv Offshore completes significant decommissioning contracts
The past 12 months have been a busy and prosperous period for Proserv Offshore with the completion of several significant
decommissioning projects worldwide.
In the Asia Pacific region, the company has completed a major subsea cutting contract for the decommissioning of a platform jacket.
Weighing almost 16,000 metric tons, Proserv Offshore provided all the cutting equipment and services including specialised ROV
operated water abrasive cutting tools designed to cut up to 80”.
Decom North Sea News
CSL Launches Decommissioning Introduction
Course
DSL Announce Decommissioning Work for
Talisman
With more than 800 facilities in the North Sea alone that will
eventually require decommissioning, demand for knowledge
in this area is on the increase.
New Decom North Sea member Derrick Services (UK) Ltd (DSL)
is currently working on the Talisman Auk decommissioning
project.
To meet this demand, CSL has developed a one-day
Decommissioning Introduction course designed to provide
managers, engineers and non-technical personnel with an
overview of the process involved in decommissioning offshore
oil and gas installations, with a focus on the environmental,
safety and financial issues.
The contract involves removing the drilling derrick and
substructure and, using approximately a dozen multidisciplined and OPITO qualified staff, DSL is currently halfway
through the six-month contract.
In the UK, Proserv Offshore recently carried out the removal of subsea manifold protection structure for a client in the North Sea. To
fulfill this project, Proserv Offshore were contracted to provide water abrasive cutting services, dredging equipment and personnel
for the severance and removal of the manifold protection structure in four sections. By being able to provide all the cutting and
dredging services without the assistance of another sub-contractor, this reduced the number of personnel required and overall
project management costs.
“These issues are of critical importance to CSL when undertaking
decommissioning projects and it’s important that people have
access to the relevant knowledge and information”, says Neil
Knowles, CSL Managing Director.
“By demonstrating the challenges and lessons learned from past
decommissioning experiences, it provides delegates with an
understanding of the decommissioning process from a real-life
perspective, which I believe is invaluable.”
Further afield, Proserv Offshore completed the abandonment and removal of St. Mary Land & Exploration’s Gulf of Mexico
Vermillion area platform, pipelines and wells destroyed during Hurricane Ike. The project was awarded based on Proserv Offshore’s
ability to assume asset ownership and provide a complete turnkey project managed service including all subsea tooling,
contracting and third party management.
The course provides delegates with an understanding of the
decision-making, planning, and implementation processes
associated with decommissioning offshore oil and gas
installations.
With over 30 year’s experience, Proserv Offshore has abandoned and decommissioned over 600 structures worldwide. Based on this
impressive track record, the company aims to further increase awareness of its products and services and group wide capabilities
into current and developing markets.
For course dates, locations and booking:
email csltraining@csl-engineering.com
or tel +44(0) 1224 285566
Flawless Exit
Retrieval work after Hurricane Ike
page 7
Mike Smith, Managing Director at DSL, said: “The Talisman Auk
project is the latest in a successful track record of drilling
package decommissioning on platforms both in the North Sea
and overseas by DSL. It further confirms our ability to support the
decommissioning of oil and gas facilities.”
DSL is one of only a few companies that offer the provision of
derrick decommissioning work with a floating ginpole and this
has been utilised for the Talisman Auk project.
The floating ginpole is a specialist piece of equipment that is
ideal for derrick erection, decommissioning or modification. It
is a very cost-effective alternative when the use of barge cranes
is not possible or is too expensive, allowing dismantling of the
derrick piece by piece on site.
Overseas, DSL has most recently worked on the
decommissioning of CTF Rig 05 offshore Tunisia, followed by
the upgrade and modification of this rig to be installed onto
another installation, which DSL then project managed and
provided onsite expertise for.
For over 20 years people=positive™ has been supporting
development projects on and offshore in the Oil & Gas sector.
In the early 90’s we worked with teams on the Gannet field
development, on Curlew with the first ESP technology in the
North Sea, on major re-development projects in the Brent field,
Buzzard and Clair. Our global experience has included involvement in Sakhalin Island with Exxonmobil and with LNG
projects for Qatargas. Currently we are supporting several
mega-construction projects in Papua New Guinea and offshore
Abu Dhabi in the Upper-Zakum field.
DSL is an industry leader supporting drilling contractors and
operators worldwide and is the UK’s only API 4F licensed
company for the design and manufacturing of drilling
structures.
In all of these smart-track© projects, the same principles
applied in achieving Flawless Start-Up are easily transferred
to the decommissioning arena where ‘Flawless Exit’ becomes
the goal. Focus will still be around putting effort into bringing
key stakeholders together from the outset of the project to
build strong collaborative relationships and to facilitate
integrated working at all levels. The themes will still be about
working in a way that delivers ‘No Surprises’ - avoiding
problems down the line where safety may be compromised
and where change becomes costly, time-consuming.
The company employs over 100 staff and has UK offices in
Aberdeen and Great Yarmouth, as well as worldwide in UAE,
Singapore and Brazil, and reported a turnover of £15million in
2009.
In North Sea decommissioning we are already involved with a
number of projects where the goal is now ‘Flawless Exit’. We
work with project leaders to design interventions at staged
intervals throughout the project life-cycle and provide
performance coaching support to individuals and teams
involved across the project.
For more information contact:
Barney Mackie - Director of Knowledge and Innovation
bm@peoplepositive.com
Visit our website: www.peoplepositive.com
DSL is committed to providing a diverse range of services and
innovative solutions to the oil and gas industry. These include
derrick inspection, drilling package decommissioning, derrick
assembly and outfitting, rope access trades personnel,
in-house engineering, design, fabrication and procurement.
page 8
Decom North Sea News
Full membership of Decom North Sea is open to any commercial organisation involved with decommissioning. Associate
membership is open to non-commercial organisations and individuals who wish to be kept informed of Decom North Sea
activity and attend networking events and conferences. For further information, visit www.decomnorthsea.com
Member Listing
Members of Decom North Sea – as at 17th September 2010
60 North Recycling Ltd
Aberdeenshire Council
AF Decom Offshore AS
AGR Subsea Ltd
AKD Engineering Ltd
Aker Solutions
AMEC
APEX Speciality Solutions Ltd
Arnlea Systems Limited
ASCO UK Ltd
Asset Development & Improvement Ltd (ADIL)
Avanteq Ltd
Babcock Marine Rosyth
Balance Point Control B.V
BIS Salamis (M&I) Ltd
BJ Process & Pipeline Services
BOND - Bluegrass Offshore & Nuclear Decommissioning Services Ltd
BP
Caithness Chamber of Commerce
Cape Industrial Services Ltd
Carbon Energy Club
CNR International (UK) Ltd
Codaoctopus Products Ltd
CSL
Cutting Underwater Technologies Ltd
Danish Marine and Offshore Group
Derrick Services (UK) Ltd
E.M.W Consultancy Ltd
East of England Energy Group (EEEGR)
Ethan Consultancy Ltd
Expro North Sea Ltd
Falck Nutec
Geoprober Drilling
Halliburton
Hawk Enviro Ltd
Heavy Decom International
Hess Ltd
Hilti
IRO
JEE Ltd
Keltbray Group Holdings Ltd
Kishorn Port Limited
Ledingham Chalmers
Lloyd’s Register EMEA
Maclay Murray & Spens
Marathon Oil UK Ltd
Marine Subsea (UK) Ltd
Mwaves Ltd
NOF Energy
Norse Cutting & Abandonment Ltd
NSIG
Oceaneering International
Oilmac.com
Oil States MCS Ltd
Pegasus International (UK) Ltd
people = positive
Peterson SBS
Petrofac
Port Services Group
Production Services Network (PSN)
Project Development International (Pdi) Ltd
Proserv Offshore
RBG Ltd
Red Stone Drilling Ltd
Rotech Subsea
Scanmet A.S
Scottish Renewables
Seajacks UK Ltd
Seal-Tite UK LLC
Shepherd & Wedderburn
Silverdot Ltd
SMD Robotics Ltd
Spartan Solutions Ltd
SPEX Services Ltd
Superior - Wild Well Energy Services Ltd
Sureclean Ltd
Talisman Energy UK Ltd
Technical Lifting Solutions
TETRA Technologies Ltd
Thinktank Maths Ltd
Tracerco Ltd
URS Corporation
Veolia Environmental Services
Wood Group
Contact
Decom North Sea, Riverside House, Riverside Drive, Aberdeen AB11 7LH
Tel: +44 1224 224129 Fax +44 1224 224301 email: shillyear@decomnorthsea.com
www.decomnorthsea.com