TechnipFMC was awarded a substantial contract by Shell Nigeria Exploration and Production Company Limited to supply Subsea 2.0 production systems for the Bonga North development in Nigeria.
The contract covered the design and manufacture of subsea tree systems, manifolds, jumpers, controls, and services, marking a significant step in advancing deepwater technology in the region.
Jonathan Landes, President, Subsea at TechnipFMC, commented, “Shell was the first to adopt our Subsea 2.0® configure-to-order solution, and continues to deploy it across multiple basins—underscoring its commitment to the technology globally. This award further positions us for future deepwater opportunities in the region.”
For TechnipFMC, a “substantial” contract is between US$250 million and US$500 million. This award was included in inbound orders in the fourth quarter of 2024. The contract highlights TechnipFMC's growing footprint in the subsea market and its strategic partnership with Shell.
Failure to decommission offshore oil and gas infrastructure on time and in compliance with requirements poses safety, environmental, and financial risks.
Failure to maintain offshore oil structures, while leaving them idle and unused can degrade these structures and pose safety risks to employees and regulators visiting the site. Moreover, a lack of maintenance can restrict access to the platform, requiring them to undergo expensive repairs and further contributing to delays in decommissioning operations. Moreover, poorly maintained structures lack appropriate lighting which can behave as a navigational hazard by disrupting ships that are operating in the area.
Delays and noncompliance with decommissioning requirements can give birth to financial risks, particularly to the US government and taxpayers. In most cases, post-bankruptcy decommissioning liabilities in federal waters have been met by co-owners, previous owners, or new owners. However, some instances have had the government having to use taxpayer dollars to pay the costs of cleaning up after delinquent oil companies. When a current leaseholder is unwilling or unable to pay decommissioning costs, federal regulators can, under a system known as 'joint and several liability,' require any or all co-owners or previous lease-holders to pay the decommissioning costs for that infrastructure. For big oil companies with operations in the Gulf of Mexico, these 'contingent liabilities' could amount to two to six times the amount of their direct decommissioning liabilities. Oil companies often do not report these contingent liabilities on their balance sheets.
Some observers have voiced concern and doubt about the strength of federal joint and several liability regulations and the government’s ability to force previous lease-holders to pay decommissioning costs as more offshore oil and gas facilities reach the end of their productive lives.
Stagnant oil and gas infrastructures in the Gulf of Mexico can be vulnerable to deterioration and decay, thereby becoming a source of pollution. This is because detereoration and decay of these structures can lead to oil spills due to a failure of tanks and pipelines. The resulting release of corroded metal into the water can cause chronic pollution. Generally, offshore wells that are either improperly plugged or unplugged are found to become a source of pollution along with leaky or shallow-water wells or abandoned platforms that could be significant sources of greenhouse gas emissions.
While oil spills from idle or unused oil and gas infrastructure are unlikely to discharge high volumes of material, even small amounts of oil are toxic to marine organisms—from plankton to marine mammals—and can cause adverse impacts to their health or their ability to reproduce.
Moreover, deteriorated infrastructures can be prone to hurricanes and other major weather events, which have been increasing in frequency and intensity due to climate change. The Gulf of Mexico is subject to powerful hurricanes that can destroy equipment such as oil storage tanks, move subsea pipelines, or even topple entire platforms.52 Any of these events can trigger oil spills, either directly from the damaged equipment or through impacts to connecting or adjacent facilities.
Following Australia's first operator-supported offshore decommissioning liability assessment, several measures have been identified to reduce cost based on the insights generated from the asset databases.
By adjusting the work breakdown structure of the costed decommissioning database, a quantum of reduction that can be targeted for key measures has been estimated:
In order to maintain continuity of savings on the liability, effective industry-wide knowledge sharing should be ensured, failure of which will risk sub-optimal cost reduction outcomes.
Amidst the stringent regulations in place regarding liability in the face of end-of-life assets, and the substantial cost associated with decommissioning activities, the ‘Rigs-to-Reef’ policy the Bureau of Safety and Environmental Enforcement (BSEE) has adopted has presented itself as an attractive option in light of the sheer scope of end-of-life work ahead.
BSEE have previously stated that the policy can help operator’s cut their decommissioning costs by up at least a quarter, while remaining sustainably conscious in a process where concerns have been raised about environmental ramifications associated with decommissioning.
Looking deeper into the reefing process, as outlined in Offshore Network’s Gulf of Mexico Decommissioning and Abandonment 2024 conference (D&A GOM 2024), there are various types of reef constructions. Those consist of:
The process of rigs-to-reef operations include vehement survey and evaluation tests to ensure the rig structure is compatible with reef development (all of which is outlined on the BSEE website). The size of the platforms, structural integrity and locations of the structure of key factors to consider when determining the validity of the project. Thus far within the region, the Department of the Interior has approved approximately 600 rigs-to-reef proposals, with only a handful denied since the policy’s introduction in 1986.
Countless studies have been conducted by the US Government to examine the impact the reefs have both on the structures themselves and the surrounding marine ecosystem. One benefit is that of marine restoration and biodiversity enhancement – the deployment of artificial reefs in areas that have been affected by situations such as coral bleaching and destructive fishing practices allows new habitats to house a variety of marine life and play a significant contribution to ecosystem restoration.
Other benefits can include the enhancement of fisheries around the localised area; a rise in ecotourism, in particular destination diving; added coastal protection from erosion as the rigs act as submerged breakwaters; advancement in marine research; increased maintenance of nutrient cycling and water quality; contribution to environmentally responsible practices; and coral restoration and conservation.
On the other side of the coin, however, there has been some pushback within the industry regarding rigs-to-reef operations due to a number of posed risks associated with the process.
Some of the concerns include habitat displacement as some reefs can alter local marine habitats; the risk of pollution from improperly prepared materials; physical damage to the seafloor if the design or placement of the rig is not appropriate; damage to the surrounding ecosystem if the construction has not been actioned properly; the negative impacts associated with long-term maintenance of the rigs; the economic costs of reef management; and design flaws which may create conflict with the local environmental conditions.
While these concerns remain a continuous reminder about the fragility of rigs-to-reef operations, operator’s must decide whether shouldering the financial burden of fully decommissioning their assets outweighs the benefits presented by the reef policies. Even with these risks in min, the Gulf is currently one of the world’s leading nations for rigs-to-reefs projects, and the future continues to look bright for the environmentally-friendly alternative to decommissioning.
Playing a key role D&A GOM 2024, reefing discussions will once again shine in the spotlight for the 2025 edition of the world’s biggest decommissioning event. All of the details regarding the upcoming conference in April can be found here.
Australia’s offshore oil and gas industry is undergoing a seismic shift, with an estimated 5,695 kilotons of infrastructure set to be decommissioned from its coastal waters by 2060 and beyond.
This monumental effort, spanning both onshore and offshore activities, involves a broad range of businesses, from initial planning and permitting to dismantling offshore platforms and recycling materials. It’s a complex process that includes plugging oil and gas wells, removing pipelines, dismantling steel structures, and safely disposing of waste materials. As the industry adapts to the future, the scale of decommissioning is expected to evolve, and the potential impact on Australia’s economy, environment, and job markets is immense.
The expanding offshore decommissioning value chain
Australia’s offshore decommissioning value chain is vast, with many key players involved in various stages of the process. Key activities include:
* Planning and securing necessary approvals: Obtaining government permits and satisfying environmental regulations are crucial first steps.
* Removal of subsea infrastructure: This includes plugging and abandoning over 1,000 wells, removing more than 4,960 km of pipelines and 1,700 km of flowlines from the seabed, and dismantling a host of offshore facilities such as fixed production platforms and floating production storage facilities
* Waste management and recycling: Steel, plastics, and other materials are salvaged and recycled, while hazardous materials are safely disposed of.
The Gippsland Basin, located off the coast of Victoria, holds a significant portion of the offshore infrastructure, accounting for about 9% of the total materials slated for decommissioning. However, the bulk of the work lies in Western Australia, where 89% of the material to be removed is concentrated. The sheer scale of this operation requires a coordinated effort among various stakeholders, including government agencies, private companies, and environmental organizations, to ensure that decommissioning is done responsibly and efficiently.
The costs and economic implications
The cost of decommissioning in Gippsland Basin and North Carnarvon Basin alone is projected at US$11bn by 2032. This is just the beginning, as decommissioning peaks are expected in 2033-2037 and 2043-2047, corresponding with the end of life for large infrastructure projects.
With the ongoing evolution of offshore wind, decommissioning activities will only become more extensive and expensive. The pipeline of decommissioning projects is projected to continue expanding well into the second half of this century, shaping Australia’s energy landscape for decades to come.
The information in this article is sourced from the Department of Industry, Science and Resources. You can read more here
Ultra-deepwater applications require high performance, modular well stimulation services.
The digital control system in Caltex’s Rigless Stimulation Tool (RST) helps in minimising flow path restrictions as its fast response time and seamless integration into a Multi-Purpose Service Vessel (MPSV) with multiple command stations ensure prompt addressal.
The tool can withstand any chemicals used in stimulations and scale treatments, ranging from acids, solvents, paraffin treatments, fines, and asphaltene deposits in production tubing, completions, and reservoirs. Operators can deploy RST to access candidate wells, particularly the ones with limited direct vertical access (DVA) under production facilities, to safely operate interventions as well as other activities.
Caltex’s RST is rated for sub-ambient pressure operations where the well mudline pressure is lower than hydrostatic conditions. The company's instrumentation and conduits are suitable from near 0 PSIA to 15,000 PSIA at 10,000 feet subsea.
Learn more about Offshore Network's well intervention conferences here.
The Middle East, home to vast oil and gas reserves, continues to play a central role in meeting global energy demands. Nations like Saudi Arabia, the UAE, and others remain key players in shaping the global energy landscape. The region’s reliance on fossil fuels, however, faces increasing scrutiny amid the global push for sustainability and net-zero goals.
This dynamic was evident at COP28, where debates centred on reconciling fossil fuel use with climate action. Saudi Arabia, a leading voice in the Organisation of the Petroleum Exporting Countries (OPEC), supported a compromise in the summit's final agreement, advocating for an equitable transition that respects each nation's unique circumstances. This approach aligns with Saudi Arabia's efforts to lead the region in adopting technologies like carbon capture and storage (CCUS) to reduce emissions without abandoning its economic backbone.
Key developments at COP28 included the signing of the Oil and Gas Decarbonisation Charter (OGDC) by 50 companies, including Aramco and ADNOC. The charter commits signatories to lower greenhouse gas emissions, enhance transparency, and phase out routine flaring by 2030. It also promotes investments in low-carbon fuels and negative emissions technologies to address methane emissions effectively.
“At ADNOC our aim is to reduce the methane intensity from our operated oil and gas assets, at the same time as we meet the forecast growth in energy demand for decades to come. We will do this by making significant investments in new technologies to improve our environmental performance, strengthening our commitment to responsible production and demonstrating our support for the UAE’s Global Methane Pledge,” said Abdulmunim Saif Al Kindy, Executive Director, People, Technology & Corporate Support Directorate at ADNOC.
Methane reduction remains a focal point, with proven measures capable of cutting emissions by over 75%. Saudi Arabia’s Middle East Green Initiative (MGI) aims for a regional emissions reduction of 670 million tonnes of CO2, contributing to national and collective goals. ADNOC, targeting net-zero emissions by 2045, has set a methane intensity reduction target of 0.15% by 2025—the region's lowest. It employs advanced methods such as flare gas recovery, infrared leak detection, and drone-mounted sensors to curb methane emissions.
Emerging technologies also play a crucial role. Well integrity issues, a significant source of methane leaks, are addressed with solutions like metal expandable packers (MEP) by Welltec. Successful trials in ADNOC’s Bab field have demonstrated MEP’s efficacy in preventing methane leakage, underscoring the industry's shift toward sustainable practices.
Malaysia is set to receive Shelf Drilling’s 1983-built Baltic jack-up rig to kickstart a multi-year plug and abandonment programme
Last upgraded in 2015, the rig can support up to 120 crewmen, and comes with the Marathon LeTourneau Super 300 design.
It is anticipated that T7 Global has acquired the rig from the Dubai-based provider to facilitate Petronas Carigali’s P&A initiative.
As Petronas continue to invest in innovative well solutions to boost production, the operator also has plans to permanently plug more than 500 wells over the next five years.
A groundbreaking offshore construction vessel is being used for a Gippsland Basin decom contract, which will provide a safer and more cost-effective removal of platforms.
The Esso Australia Pty Ltd (Esso Australia), a subsidiary of ExxonMobil Australia, recently awarded Switzerland-headquartered Allseas, a leading contractor in the offshore energy market, the contract to remove up to 12 retired platforms from the Gippsland Basin in the Bass Strait, with a combined weight of approximately 60,000 tonnes. It covers up to 12 topsides and up to 11 steel jackets.
Allseas will utilise the Pioneering Spirit, which the company says is the largest, most versatile offshore construction vessel in the world, designed for the single-lift installation and removal of offshore platforms and the installation of record-weight pipelines.
The emergence of Pioneering Spirit sets new standards in offshore installation and decommissioning, according to Allseas. Capable of lifting entire platform topsides of up to 48,000 t and jackets up to 20,000 t in a single piece, it significantly reduces the amount of offshore work associated with installation and decommissioning, moving the work onshore where it is safer and more cost effective and reducing the time required to execute such contracts. The vessel set a new world record for the heaviest lift ever performed in July 2024, when it removed the last platform of the Shell Brent field in the North Sea, Brent Charlie, with topsides weighing 31,000 t.
Allseas plan to remove all the structures with Pioneering Spirit in just three to four months, starting late 2027. Once removed, the facilities will be transferred to barges or vessels for load-in to the Barry Beach Marine Terminal in Victoria for dismantling and recycling by a separate onshore contractor. Planning and engineering work is already underway.
Fishing forms an integral part of even the plugging and abandoning process, besides its significance in drilling, completing or recompleting.
A North American company called Wellbore Fishing & Rental Tools LLC provides operators with these services, with a special emphasis on risks, costs and downtime reduction.
With strategically located yards in Port Fourchon and Texas City, the company's position near the loading docks serve as holding locations for fishing tools, eliminating shipping time, thus in turn, working wonders in bringing down NPT.
Comprising of a workforce with decades-long experience in the industry, the company personnel works on the basis of continued research and development to meet the demands and challenges of an ever-evolving industry. Personnel training in the company is usually driven by exposure to new equipment and process solution. Currently, the team is focusing on adapting real time technology to monitor tool performance parameters and high performance tool properties for extreme deep-water service applications.
The European offshore well intervention market is witnessing dynamic growth, driven by geopolitical shifts and strategic investments in the region. According to industry data, the onshore segment dominates Europe’s oil production landscape, accounting for 65% of rigs. However, the offshore sector, including the Norwegian Continental Shelf and the Mediterranean Sea, is rapidly emerging as a critical area for well intervention activities, particularly due to evolving energy demands and sanctions on Russia.
Norway leads offshore expansion
Russia remains the largest exporter of oil and natural gas in Europe. However, sanctions imposed by European and North American countries have significantly impacted the Russian oil and gas industry. These sanctions, however, present growth opportunities for Norway, Europe’s second-largest natural gas producer, to strengthen its position in the offshore well intervention market.
In 2021, natural gas demand showed recovery to pre-crisis levels and was projected to rise modestly during the forecast period. Exploration activities in offshore regions like the North Sea have surged, driven by Norway’s strategic investments. The Norwegian Petroleum Directorate’s Awards in Predefined Areas (APA) 2020 offered 30 companies ownership interests in 61 production licenses, with 34 licenses located in the North Sea. This offshore region alone holds 18% of Norway’s undiscovered oil and gas potential, highlighting the growing importance of offshore well intervention activities.
Equinor and its partners have also focused on offshore development, investing NOK 3 billion (approx. US$300mn) in the Statfjord Øst field in 2020. This project involves installing gas lift pipelines, modifications on the Statfjord C platform, and drilling new offshore wells. These interventions are designed to recover an additional 23 million barrels of oil, with production expected to start by 2024.
In recent years, Norway has prioritised sustainable offshore operations. Companies are adopting advanced upstream technologies to reduce greenhouse gas emissions, aligning with the European Union’s 2030 targets and the long-term goal of net-zero emissions by 2050. These efforts position Norway as a leader in the offshore well intervention market, especially as European countries seek reliable energy sources amidst Russian sanctions.
Conclusion
The European offshore well intervention market is poised for significant growth, with Norway leading the charge. As geopolitical factors reshape energy dynamics, offshore activities will play an essential role in ensuring reliable energy supplies while addressing environmental sustainability.
This analysis is based on the Europe Well Intervention Market report by Mordor Intelligence. For further insights into both onshore and offshore well intervention, visit, Mordor Intelligence.
On January 15, 2025, Chevron has announced that it did not find commercial hydrocarbon reserves in its exploration well, Kapana 1X, located in Namibia’s Orange Basin within the PEL90 block.
Despite the absence of viable reserves, the company emphasised that the well provided valuable geological data, enhancing its understanding of the basin. Chevron indicated that it plans to continue exploring Namibia in the future, as the country remains a key area of interest for oil producers.
Namibia has recently become a hotbed for offshore oil discoveries, with several large-scale finds making headlines as some of the biggest of the century. However, not all exploration efforts have been successful. Last week, Shell revealed a US$400 million write-down on an offshore discovery in Namibia, deeming it commercially unviable.
In a separate development, Namibia’s national oil company announced in April that it had entered into a deal with Chevron, granting the US company an 80% operating working interest in an offshore block in the Walvis Basin, marking a new phase in Chevron’s involvement in the country’s energy sector.
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