Relatively stable oil prices and a growing global oil demand is creating favourable dynamics for the oil and gas community in the near-future, however uncertainty is rife over how long this will last as the race to meet the Paris Agreement 2050 target intensifies.
While this is raising questions over further drilling activity offshore Australia, it is suggesting a promising future for the country’s well intervention market as operators seek to squeeze the last drops of oil out of existing assets and perform end-of-life work in preparation for the substantial decommissioning task ahead. At the same time, the offshore carbon capture and storage space is garnering significant interest and marks another tantalising frontier that is receiving Government backing.
Read Offshore Network’s full report to understand the background and nuances of Australia’s offshore well intervention market as well as the potential challenges (such as labour shortages and vessel availability) which threatens to stifle it.
McDermott has been awarded an engineering, procurement and removal contract for offshore decommissioning work by Woodside Energy.
The award is for the full removal of the Stybarrow disconnectable turret mooring (DTM) buoy, as part of the decommissioning of the Stybarrow field located in the north-western Cape of Western Australia.
Under the contract scope, McDermott will provide project management and engineering services for the recovery, transportation and offloading of the DTM buoy to an onshore yard for dismantling and disposal.
Mahesh Swaminathan, Senior Vice President, Subsea and Floating Facilities, McDermott, said, “This award not only demonstrates McDermott’s proven track record in undertaking deepwater projects of diverse scopes, but it also highlights the critical importance of decommissioning in the offshore industry.
“With our seamless integration of engineering, fabrication, and offshore mobilisation expertise, we believe we are well-equipped to execute this project efficiently and responsibly, ensuring the safe recovery and removal of the Stybarrow DTM buoy.”
The DTM buoy will be removed utilising McDermott’s DLV2000 vessel, with the Perth-based team overseeing project management while engineering and fabrication support will be provided by the team in Kuala Lumpur, Malaysia, and Batam, Indonesia.
Global energy consultancy Xodus has been awarded a contract to provide technical and project support services for Phase One of the decommissioning of the Northern Endeavour FPSO.
Phase One covers activities to facilitate the disconnection and removal of the FPSO including topsides and subsea flushing and well suspension.
Xodus will be working on behalf of the Australian Government, providing advice and project coordination, regulatory and environment, health and safety, technical, quality assurance, and contract management as part of the agreement.
Alasdair Gray, Late Life and Decommissioning Lead at Xodus, said, “We have a highly experienced local team with several of our colleagues having extensive experience of the Northern Endeavour either from the early design and installation phase of the project or during production operations. This means that whilst being able to bring a fresh approach, the facility is already familiar to much of the team.
“We understand environmental sensitivities and the impact these can have on any proposed activity or execution plan. Expert technical advice and careful planning will be critical to the successful decommissioning of the offshore field in a safe and responsible manner. We are pleased to provide the necessary support to ensure that the decommissioning strategy is robust and ultimately compliant with regulatory expectations.”
The Northern Endeavour is a 274 m long FPOS which is permanently moored between the Laminaria and Corallina oil fields in the Timor Sea. The now redundant production system comprises a network of subsea wells tied back to the permanently moored vessel unit through a system of subsea manifolds, flowlines, umbilicals, and dynamic risers.
Helix Energy Solutions’ Q7000 vessel has berthed in Port Taranaki to carry out a crew exchange and load up on supplies before heading to complete the third stage of the Tui oil field decommissioning campaign, which is set to take approximately three months to complete.
Port Taranaki’s head of commercial, Ross Dingle, said the port was pleased to support the project, having also provided berthing services and laydown facilities for the first two stages.
Port Taranaki is working with New Plymouth-headquartered energy consultancy, Elemental Group, which is providing project management assistance of New Zealand operations for Helix Energy Solutions.
Nick Jackson, Elemental Group Director, said, “All up, there will be a team of more than 100 on the Q7000, over half being Kiwis and Aussies in operations roles working alongside the Helix crews, as well as several specialist roles, such as wireline and cementing.
“We’re excited to be a part of the project. I worked on some of the original Tui exploration wells, so it’s nice to be involved in restoring the mauri of the area.”
Following new developments to the Decommissioning and Abandonment Australia 2023 programme, Offshore Network has released a revised agenda.
More than 250 decommissioning experts are expected to attend this year’s D&A AUS conference, being held at the Duxton Hotel, Perth, from 30-31 May. As the country’s largest decommissioning summit, attendees will receive unique access to updated regulatory guidelines, innovative technologies and valuable lessons which contribute to the success of upcoming campaigns.
With the forthcoming decommissioning wave more visible than ever, D&A AUS 2023, like its predecessors, will serve as a meeting point for the industry to get ahead of the challenge and unlock the opportunities held within. Now, there is more incentive to join the community in Perth this year, with new presentations and tech displays added to the agenda.
Notably, Craig Baxter, Decommissioning Technical Manager from Claxton Engineering will present on innovation and collaboration in underwater laser cutting, allowing attendees to access insights into the tools capabilities and understanding of where the technology can be utilised best.
Visitors will now also be looking forward to a presentation from Richard Bazen, Sales Director of Energy from RemSense. At the conference, Bazen will look at mitigating the risk of HSE and decommissioning liabilities using photogrammetry based digital twins. With the digital age firmly upon us all, this is one session not to be missed.
Offshore Network has now announced additional facets with AF Offshore Decom presenting and Trident Australia exhibiting at the conference. Furthermore, the organiser has revealed group bookings from Woodside, Santos, Weatherford, Mann Group, Tetra Tech and more.
Find all relevant information and the agenda in the brochure here: https://offsnetevents.com/da-aus/
Or contact:
Erin Smith
Global Accounts & Australasia Regional Manager
Offshore Network Ltd.
t: +64 (0) 3 569 3074 | e:
Jadestone Energy plc, an independent oil and gas production company headquartered in Singapore, has announced the Montara Venture FPSO offshore Australia restarted production operations last week.
Following what the company called a ‘carefully planned’ restart programme, production recommenced from the H6 well within the Montara field, with further wells set to follow, including the first Skua subsea well.
With the systematic opening of additional wells in line with the restart plan, production rates are set to increase, and the company will announce its production guidance for 2023 once output has stabilised.
Paul Blakeley, President and CEO at Jadestone Energy, said, “I would like to thank everyone in Jadestone who has contributed to the safe and successful restart of Montara operations as well look forward to putting this challenging period behind us and returning to business as usual.
“It is a relief to see operations at Montara being restored and we look forward to increasing production and cash flow. We also plan to return to growth, having completed three acquisitions within the last six months, with several new acquisition opportunities in the pipeline.”
The restart programme was instigated after the initial shutdown of production in July 2022 after a small leak from the crude oil tank aboard the FPSO was detected and required permanent repair.
Pressing climate concerns and an overall healthy oil price across 2022 have set the stage for Australia's decommissioning industry to flourish, according to a new report published by Offshore Network.
Reports estimating that oil prices through 2027 will stay at a healthy rate of approximately US$90 per barrel bodes well for the decommissioning industry as companies can consider liability expenses even more open-handedly.
The government-backed Northern Endeavour project has triggered a flurry of decommissioning prospects to swing into action; a trend that is expected to continue over the next few years. Because of this, promising engineering companies like Wood and Monadelphous are being shot into the limelight, as the government onboarded them for various roles on the Northern Endeavour decommissioning.
Companies like Santos, Woodside, BHP and Vermillion Energy have signed up for kick-starting end-of-life activities, with ExxonMobil leading the way. Chevron has ongoing decommissioning projects onshore and offshore at Thevenard Island, which was rendered inactive in 2014. NOPSEMA has granted decommissioning approval to companies like Woodside, BHP and Cooper Energy early last year. Decommissioning activities in the Enfield Oil Field are being conducted by Woodside in phases, and is expected to be completed by 2024. Australia is financing research initiatives and organisations are tying up to tackle the challenges of decommissioning through knowledge sharing. Xodus, along with ANSTO, SA Radiation, Total Hazardous Integrated Solutions and Qa3, form the Contaminant Advisory Group that helps operators to work through the government’s OPGGS bill.
This flurry of activity has been prompted by a government determined to ensure that decommissioning responsibilities are carried out. The new Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Amendment and other Measures) Act 2021, makes sure the entities intending to carry out petroleum or greenhouse gas activities are capable, competent and responsible in proper discharge of obligations under the act.
The Centre of Decommissioning Australia (CODA) has estimated the decommissioning expenses of the Australian oil and gas industry to reach as high as US$40.5bn, considering the nation's significant asset stock. According to a report by Rystad Energy, 890 offshore wells in total were drilled in Australia before 2015, of which 108 have been permanently abandoned. Around 440 wells are P&A candidates, the majority of which are in the Gippsland Basin.
Based on the identified numbers, CODA has come up with a comprehensive liability report, to serve as the go-to manual for operators when it comes to making smart economical choices. Critical to this, as stressed by Francis Norman, CEO and Managing Director of CODA, is the importance of collaborative campaigning and in-situ decommissioning as effective cost-cutting measures.
Players like CODA are guiding the Australian decommissioning industry through the climate conundrum through strikingly innovative approaches. One of them is the rig-to-reef concept, which involves a special combination of materials that resulted in the Exmouth Integrated Artificial Reef, better known as the 'King Reef' in the Exmouth community. It combined 49 purpose-built concrete modules with six steel structures from a BHP-operated field that is no longer in use, providing home to 27,000 cu/m of new marine habitat. As incredible as that sounds, operators must have clarity about the risks involved as well, so that they can keep pushing barriers through innovation.
With every stakeholder working in tandem and taking onboard lessons from other more developed regions, the Australian industry can ensure that the forthcoming decommissioning wave can be weathered.
Esso Australia, a subsidiary of Exxonmobil Australia, has entered into an agreement with Helix Energy Solutions to charter the Helix Q7000 semisubmersible vessel to support decommissioning activity across the Gippsland Basin.
The vessel will join Esso Australia’s growing fleet, with its roster of mobile offshore assets now including Rig 22, the HWT600 and a DOF Subsea Multi-Purpose Support Vessel.
Dylan Pugh, ExxonMobil Australia’s Chair, said, “The Helix Q7000 is a welcome addition to our extensive fleet of vessels and rigs currently operating across the Gippsland Basin. It is the forth mobile offshore asset we have added to our decommissioning fleet, and marks the first time we will be using a light well intervention vessel for subsea work locally.
“We are committed to sourcing the right assets for the work we are completing, given the variety of fields we have operated for over 50 years. Our priority is to remain safe, whilst using fit for purpose solutions which ensure we are meeting our decommissioning requirements.”
The Helix Q7000 is set to support decommissioning activities in Bass Strait from the end of 2023.
Well-SENSE, a downhole sensing specialist, has deployed its FiberLine Intervention (FLI) technology at a large carbon capture and storage (CCS) facility, in an industry-first application.
FLI has already been well-proven in a variety of seismic, acoustic and temperature monitoring applications in the oil and gas sector and has just completed its first geothermal well survey for Eden Geothermal in Cornwall.
The fibre-optic monitoring system has since been deployed for a leading integrated energy operator in Australia and marks the first time that fibre has been used to survey live CCS wells and reservoirs.
The new application in the carbon sequestration sector provides a safe, low-risk monitoring solution in a highly corrosive CO2 environment where traditional intervention solutions are often detrimentally affected.
The energy operator employed FLI in a field trial to study well integrity, CO2 flow characterisation and plume movement within the reservoir. FLI’s distributed temperature sensing (DTS) enabled assessment of the reservoir zones, while its distributed acoustic sensing (DAS) simultaneously acquired vertical and passive seismic data.
Annabel Green, CEO at Well-SENSE, commented, “Our FiberLine Intervention system was selected by this leading operator, to be evaluated as a potential alternative to the use of wireline production logging tools. Our system’s advantages include its extremely compact rig-up, much lighter surface pressure control equipment which uses a static rather than a dynamic seal and a simpler deployment method compared to conventional techniques. FLI also uses a bare fibre that is impervious to the corrosive effect of CO2, which helped to make this intervention possible.
“Several challenges were overcome efficiently, including the requirement to leave the fibre in the well for four days with exposure to strong fluid cross flows, the requirement for immediate Cloud data transfer from the wellsite to the operator’s technical centre and servicing a remote wellsite near live infrastructure. We are delighted that operations were performed incident free with no major NPT events and that our unique technology provided valuable, high-quality data from multiple wells.”
The decommissioning of the Northern Endeavour facility has reached a significant milestone as contractor Petrofac Facilities Management Limited (Petrofac) has begun Phase One of the decommissioning process.
The process will see the Northern Endeavour disconnected from subsea equipment and the suspension of the oil wells.
The facility is moored in the Commonwealth waters in the Timor Sea, between the Laminaria and Corallina oil fields. It stopped oil production in 2019, after being shut down by National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) for immediate breeches in health and safety.
“The Australian Government remains committed to the successful decommissioning of the Northern Endeavour, the removal of infrastructure and the remediation of the Laminaria and Corallina oil fields,” said Madeleine King, Minister of Resources and Northern Australia.
“Petrofac taking operational control is a significant step in the decommissioning process.”
The US$355mn contract was drawn up with Petrofac in March 2022 to deliver the first phase of the decommissioning project.
Engineering company Monadelphous Group Limited has secured a contract to provide operations, maintenance and industrial services to support Petrofac in the decommissioning of the Northern Endeavour Floating Production, Storage and Offtake (FPSO) facility.
The Northern Endeavour is a 274 m long FPSO, permanently moored between the Laminaria and Corallina oilfields, approximately 550 km northwest of Darwin in the Timor Sea. Production began in 1999 and peaked at 170,000 barrels of oil per day.
In 2019, the facility was shut down by NOPSEMA after an immediate threat to health and safety was found at the facility. After owners Northern Oil & Gas Australia went into liquidation, it fell to the Government to maintain and ultimately decommission it.
Petrofac was contracted earlier this year as outsourced operator responsible for decommissioning and disconnection of the FPSO. The scope includes the provision of its unique integrated services, working with both local and global suppliers.
The support to Petrofac represents Monadelphous’ first offshore decommissioning contract with work expected to be completed in the second half of 2023.
It represents a host of new contracts and contract extensions awarded to Monadelphous totalling approximately US$160mn.
As part of the early decommissioning works in Bass Strait, Esso Australia’s wells team is moving to the next stage of plug and abandonment work, applying key learnings from the recently completed conductor removal operations on Kingfish B and Mackerel.
Following its successful work at Kingfish B, Rig 22 will now be utilised for plug and abandonment activities at the non-producing platform, Flounder.
“The professional crew deployed with Rig 22 safely and efficiently completed operations at Kingfish B. The results proved the combination of our capable workforce and the refurbished Rig 22 can deliver world class performance for plug and abandonments,” said Wells Operations Superintendent, Ryan Turton.
“We now have a long programme ahead, and we are excited to further optimise our processes and continue to responsibly meet our plug and abandonment obligations.”
The team is also preparing for the arrival of the DOF Multi-Purpose Support Vessel (MPSV) Skandi Darwin, which is arriving at the Barry Beach Marine Terminal early August.
“One of the MPSV’s first tasks will be to support works at our steel gravity based monotowers, Dolphin and Perch,” said Matt Barney, Marine Field Superintendent.
The MPSV provides a floating support asset that will allow the complete abandonment operations on our non-producing facilities which do not have accommodation based on them.
“The MPSV hosts the workforce and means we don’t have to fly workers in and out of the area each day,” said Matt.
“We’re excited to start utilising the MPSV to expand our capabilities and adopt new technology to identify efficiencies, while ensuring the work can be completed safely.”
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