Planning and preparation are underway for Australia’s largest offshore decommissioning project. Esso Australia Pty Ltd, a subsidiary of ExxonMobil Australia, has awarded Allseas the contract to dismantle up to 12 retired platforms from the Gippsland Basin in the Bass Strait.
The platforms, with a combined weight of approximately 60,000 tonnes, mark a historic milestone for offshore operations in the region.
For the first time, Pioneering Spirit will bring its revolutionary single-lift technology to Australian waters. This cutting-edge capability enables the removal of entire offshore structures – both topsides and jackets – in a single lift, allowing the massive scope of work to be completed within just a few months.
“This landmark decommissioning project represents a significant milestone for Allseas in Australia,” said Evert van Herel, General Manager of Allseas Australia. “Over the past 20 years, we’ve built a strong track record delivering subsea pipelay and construction services for major greenfield projects in these waters. It’s an honour to now bring our expertise to the first removal of platforms of this scale from Australian waters.”
The ambitious timeline includes the removal of up to 12 topsides and 11 steel jackets during a 3–4-month campaign set to begin in late 2027. Once removed, the structures will be loaded onto barges or vessels for transport to the Barry Beach Marine Terminal in Victoria, where they will be dismantled and recycled by an onshore contractor.
The engineering and project management work is being led from Perth and Melbourne, with additional support from Allseas’ offices in Delft and Kuala Lumpur.
“This historic project gives us an opportunity to showcase the capability of our single-lift technology in challenging environments like the Bass Strait,” added Evert. “We’re very much looking forward to working with Esso Australia to make this a successful project and thank them for their trust in Allseas to carry out this landmark project!”
Helix's Q7000 purpose-built DP3 semi-submersible vessel will undergo hull clearance among other maintenance activities at Namibia’s Port of Walvis Bay before it is all set to start for delivering a decommissioning contract off the coast of Brazil as agreed with Shell in 2022
The year-long contract also mandates plug and abandonment services at the Bijupira and Salema fields in Brazil’s Campos Basin.
It will take an estimated 10 days – that will also involve the removal of maring growth from the pontoons – to have the vessel prepared for operations offshore Brazil.
Helix's Q7000 vessel that was built in 2019 is equipped for riser-based subsea well intervention and decommissioning operations. With a capacity to withstand harsh environmental conditions, the unit supports production enhancement operations, well-cleanup, and field development. With a variable deck load capacity of about 3,000 metric tons besides well intervention and service fluids, Q7000 can support a crew of as many as 140 people.
The upper deck has a 600-metric-ton well intervention tower with active and passive heave compensation, and a skidding system for well intervention support equipment and tubular storage make up the large flush deck. The below deck comprises twin work-class ROV systems, bulk fluid storage, and pumping systems.
As a reflection of the energy transition, the offshore industry is ushering in a new age of optimisation to hit production targets rather than chasing after new discoveries.
Operators are hence increasingly looking at marginal fields or brownfield projects and collaborating with service providers to deploy the best digital advancements in the industry to boost production form these assets. The Director of Mature Assets Solutions at Baker Hughes, Guillaume Fauchille, notes that maximising production from existing assets have turned out to be cheaper than investing in new fields. The reason behind 70% of today's oil and gas production coming from mature fields is being attributed to faltering investment in greenfields, the Covid-19 hangover and geopolitical turmoil.
Baker Hughes has also found that as less as 1% boost of the recovery factor of mature assets can make a difference by unlocking access to two to three years of additional worldwide consumption.
As market experts predict around 4-6% growth of the global well intervention industry, most agree that this growth will be led by North America, a region that would be responsible for a large part of future expansion. Intervention activities in the Gulf of Mexico will be primarily driven by technological advancements such as automated systems, data analytics, and advanced downhole tools to name a few.
Of the latest examples from the region, Subsea7 will be installing of a production flowline and related subsea infrastructure as part of engineering, procurement, construction, and installation (EPCI) contract for production optimisation from Shell's Phase 3 Silvertip Development.
The National Subsea Centre (NSC) a centre for subsea research and technology development, has received a grant to develop a subsea decommissioning optimisation software demonstrator with PlanSea in a move which could make waves across the global offshore sector.
The scale of the decommissioning challenge facing the global offshore oil and gas sector remains a formidable one, to say the least. While there are certainly more instances of such operations being conducted, this is largely outweighed by the number of new wells coming online, an action that will ultimately only serve to increase the size of the decommissioning bill that must be paid. This invoice has already reached eye-watering proportions; as of June 2023, there was an estimated US$40-70bn cost accrued in the Gulf of Mexico alone. As a result, any efforts to simplify the decommissioning process and potentially reduce the decommissioning bill are a welcome sight to those who will ultimately have to foot it.
In receiving the new grant, NSC will work with PlanSea and utilise its expertise in offering world-leading marine logistics AI technology. The two have already collaborated for many years but will now deploy their technology and skills to address the needs of the subsea decommissioning sector.
Specifically, the two are developing a robust task-based formalisation of offshore decommissioning activities that will extend the benefits of PlanSea marine-logistics AI. Decision-makers will have the ability to stimulate with a high degree of accuracy the cause-effect relationship between different strategies and KPIs of interest.
“The AI demonstrator is aimed at addressing both standalone and collaborative campaign optimisation of current and future decommissioning,” remarked Jim Cargill, CEO of PlanSea. “Additionally, as in marine logistics, we offer a digitalised process for users whilst at the same time enhancing visibility of operational activity.”
The robust AI tool that will be produced has been fast-tracked for initial trials in Q2 2025.
James Njuguna, NSC Director of Research & Innovation, added, “Our centre is uniquely positioned to address the subsea industry’s most pressing challenges. Our in-depth knowledge of marine operations offers a great opportunity to collaborate with PlanSea to provide operators with substantial savings and reduce emissions. I am confident that this collaborative project will harness our research expertise and PlanSea’s cutting-edge industrial knowledge to deliver a pioneering solution for the energy transition.”
Adverse weather conditions have disrupted TotalEnergies EP Danmark’s operations, delaying production from the remaining fields at its natural gas redevelopment project in the Danish sector of the North Sea.
As a result, the company has updated its timeline for achieving full production capacity at the Tyra gas field, Denmark’s largest natural gas field.
The Tyra redevelopment project has been underway since March 2024, with the first gas export from Tyra II marking the successful initial production following a major revamp. However, challenges have emerged in the process of reactivating and optimising offshore wells, particularly in relation to the reactivation of the Tyra satellite wells. These wells are critical to achieving the anticipated production plateau, and the necessary well interventions have been delayed by adverse offshore weather.
A key operational challenge arose from issues related to two transformers supplying power to essential gas compressors, which have impeded the full commissioning of the project. Despite these setbacks, TotalEnergies has made significant progress in repairing and commissioning equipment, although the anticipated timeline for full technical capacity was initially set for mid-November 2024. Uncertainties about remaining operational conditions have led to delays.
The ramp-up phase, which is closely tied to well intervention activities, has allowed for gas production to be restored from three of the six fields. However, due to weather conditions and other operational issues, the reactivation of the Tyra satellite wells has faced further delays. Offshore weather constraints, including limited weather windows, have hindered the progress of well interventions and postponed the critical reactivation of these satellite wells.
Given the current weather forecasts, the timeline for reactivating all satellite wells to achieve plateau production has been extended by approximately three weeks. The revised timeline now places the expected achievement of plateau production in the second half of January 2025.
The Tyra field is part of the Danish Underground Consortium, with TotalEnergies EP Danmark (43.2%), BlueNord (36.8%), and Nordsøfonden (20%) as the key stakeholders.
Euan Shirlaw, CEO of BlueNord, commented, “Although it is disappointing that plateau production is now expected in the new year, we are confident that the recent above-ground challenges are well understood. Once the remaining satellite wells have been reactivated, the performance of the field will no longer be constrained by weather, as has been the case during the startup phase. We look forward to reaching plateau production in January 2025 and sharing the promising results of our HEMJ program.”
TotalEnergies points out that oil and gas supply nearly 50% of Denmark’s energy needs, and once the Tyra field reaches plateau production, it is expected to contribute around 6% of the European Union's natural gas output, marking Denmark’s return as a net gas exporter.
Additionally, in June 2024, drilling operations in the Harald East area, conducted with the Shelf Drilling Winner jack-up rig, led to the discovery of additional gas condensate resources in the Harald field, which is located in shallow waters 250 km off Denmark's west coast. These new reserves could further boost production from the region, with ongoing well intervention efforts to optimise the production from the field.
Amidst the tightening up of decommissioning regulations, and the substantial amount of infrastructure coming to the end of its operational life, the Rigs-to-Reef programme has emerged as an attractive option in the Gulf of Mexico in the face of spiralling decommissioning costs.
Over the course of their lives, oil and gas structures in the marine environment become a haven for marine life. The Rigs-to-Reef programme, operated by the Bureau of Safety and Environmental Enforcement (BSEE) provides an alternative to the obligation to onshore disposal by converting retired platforms into permanently submerged ‘artificial reefs’. Such a method (achieved through tow-and-place, topple-in-place, or partial removal) allows operators to save an estimated quarter of the cost of a full service removal and is something of a trademark of the region, with around 600 platforms turned into reefs since conception in 1984. According to an article in the Scientific American, of the 15 structures decommissioned in the Gulf of Mexico in depths greater than 400 feet, 14 have been “reefed.”
According to the BSEE, the benefits of such an approach include saving fuel emissions that otherwise would be expended transporting and disposing of obsolete structures; enriching the marine life in the area, given the natural bottom of the Gulf of Mexico offers very little natural hard bottom and reef habitat; attracting recreational and commercial fishing and diving; and promoting biodiversity. A typical eight-leg structure provides a home for 12,000 to14,000 fish, according to a study by the Coastal Marine Institute, while a typical four-leg structure provides two to three acres of habitat for hundreds of marine species. For the oil and gas companies themselves, repurposing obsolete structures saves them the costs of removing, transporting, and disposing of them onshore. BSEE regulations require that, within one year of a lease's expiration, the obsolete structure must be removed.
All five Gulf of Mexico coastal states have approved artificial reef plans and have incorporated decommissioned platforms into their artificial reef programmes. Converting into reefs entails meeting strict criteria and requirements, such as the structure being sound, stable, clean, and overall beneficial to the environment, while protecting the Gulf of Mexico's natural resources. The operator is required to make a donation to the state, which goes towards the management of the state’s artificial reef programme. Once the operator has received approval, converts the structure to a permanent artificial reef and has complied with all permits and donation agreements, the title and liability for the structure is transferred from the operator to the state.
While there are examples of rig-to-reef approaches in other regions of the world and interest is growing, there are as yet no international standards governing the reefing of rigs, and the Gulf of Mexico has the most developed and regulated system. While some stress the benefits of the initiative, and the environmental damage that could be caused by complete removal of a rig with the potential destruction of a rich aquatic ecosystem, many are less convinced, and public perception is often not in favour. Many oppose any oil infrastructure being permitted to stay in the ocean given it could be seen to let oil and gas companies off the hook financially, arguing that operators should be required to return the area to its original state.
There has been a number of efforts to expand production in Malaysia’s offshore oil and gas fields, with a number of key industry players increasing their stake in the region.
TotalEnergies, for instance, has finalised the acquisition of interests of OMV and Sapura Upstream Assets in SapuraMOV Upstream, an independent gas producer in Malaysia. SapuraOMV’s main assets are its 40% operated interest in block SK408 and 30% operated interest in block SK310, located offshore Sarawak. In 2024, SapuraOMV’s operated production (100%), supported by the start-up of the Jerun gas field, is expected to reach approximately 590 Mcf/d of natural gas, feeding the Bintulu LNG plant operated by Petronas, as well as 10 kb/d of condensates.
Elsewhere, EnQuest Petroleum Production Malaysia announced in December an agreement to develop approximately 155 Bscf (c.27mn barrels of oil equivalent) of additional Seligi field gas resources along with a 50% equity share.
In partnership with PETRONAS Carilgali Sdn Bhd and E&P Malaysia Venture Sdn Bhd, the agreement enables the parties to develop and commercialise the non-associated gas resources in the PM8E PSC contract area and, in line with expected demand, supply around 70mmscf per day of sales of gas. EnQuest will produce additional Seligi Field non-associated gas by modifying its existing infrastructure, providing a cost-efficient way to deliver new volumes into the Peninsula Malaysia gas system.
“Malaysia is a key area for EnQuest’s growth strategy, and this agreement complements the signing of the DEWA Complex Cluster SFA PSC in October this year,” remarked EnQuest CEO, Amjad Bseisu.
December was also marked by PETRONAS awarding production sharing contracts for three discovered resource opportunities clusters and one exploration block offered under the Malaysia Bid Round (MBR) 2024 which was launched earlier this year. The resources are located next to existing infrastructure, enabling synergistic development and swift monetisation that, PETRONAS said, will allow for efficient and cost-effective resource extraction.
“We are pleased to see our petroleum arrangement contractors growing their portfolios in Malaysia,” said Senior Vice President of MPM, Datuk Ir. Bacho Pilong. “With their strong track records and proven capabilities, they continue to contribute significantly to the growth of Malaysia's petroleum sector… The year 2024 marks another successful year with the award of 18 PSCs across exploration, DRO and Late Life Asset. This is a testament of investors' confidence in PETRONAS' innovative asset offerings with high monetisation potential, solidifying Malaysia’s position as a preferred destination for upstream investments.”
While Malaysia is already a strong point in the APAC region for well intervention services beyond drilling, the expansion of production in the country suggests that even more opportunities will be forthcoming for such service providers.
In a bid to boost production from the Perdido platform that is operational for the Phase 3 Silvertip Development in the US Gulf of Mexico, Shell has onboarded Subsea7 for extensive engineering, procurement, construction, and installation (EPCI) work that will run 3,000 metres deep into the Alaminos Canyon.
Subsea7's services will also include the installation of a production flowline and related subsea infrastructure. The company is currently tackling the project management and engineering of this contract at their office in Houston, Texas.
"This new award strengthens our diverse portfolio of deepwater projects in the Gulf of Mexico. We look forward to continuing our collaboration with Shell," said Craig Broussard, Senior Vice President for Subsea7 Gulf of Mexico.
Owned by Shell (40%) – who is also the operator – and Chevron (60%), the wells within the Silvertip Frio reservoir can achieve a combined yield of nearly 6,000 barrels of oil equivalent per day. A final investment decision has hence been reached to advance production optimisation across two wells that comprise the Phase 3 Silvertip project. The companies are aiming first production in 2026.
"This investment at Perdido is another example of our focus on high margin, lower carbon intensity barrels," said Rich Howe, Shell's Executive Vice President for Deep Water. "As the largest operator in the US Gulf of Mexico, we prioritize opportunities nearby our existing assets in these advantaged corridors, where we are well-positioned to develop shorter-cycle, high value tieback opportunities."
With nearly US$60bn expected to be invested into decommissioning offshore infrastructure over the next three to five decades, the Australian government has formed an Offshore Decommissioning Roadmap aimed at boosting the growth of the country's decommissioning industry.
Growing Australia's domestic decommissioning industry not only benefits the country's economy and environment, it also plays a key role in Australia's transition to net zero.
The roadmap maximises the amount of decommissioning activity that happens domestically and ensures that planned activities are taking place with improved efficiency and transparency. It also sets out a path to grow Australia's industrial capability in the management of decommissioning and materials, create safe, top-tier jobs to service a thriving decommissioning industry, all while ensuring that the industry undertakes its decommissioning obligations in a safe, timely and environmentally responsible way.
The roadmap focuses on five main areas of opportunity including the establishment of a regulatory framework that safeguards the environment while attracting investment, fostering meaningful partnerships with First Nations people and local communities, and maximising infrastructure opportunities and availability. Moreover, it encourages job creation and investment in the recycling and waste management sectors while also developing an offshore decommissioning workforce that is safe, skilled and diverse.
To support the roadmap, the Offshore Decommissioning Directorate was formed this month to encourage collaboration among all parties involved, improve transparency across the pipeline, be a trusted partner and advisor on policy matters, strengthen regulatory frameworks and ensure that industry activities complement the Future Made in Australia agenda.
Over the past few years Latin America has positioned itself on the global stage as an emerging and critical industry across the well lifecycle that addresses the growing need to effectively and efficiently retire infrastructure once the well has reached end of life.
It has not been smooth sailing for the industry as the region has faced a series of complex challenges in light of the energy transition, however with environmental licenses by the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) becoming an integral factor in the materialisation of production interests and an overall increase in environmental awareness from across the industry, stakeholders and key industry players are embracing innovative well intervention methods and ensuring thorough end-of-life measures are in place.
Looking primarily at decommissioning and abandonment (D&A) the main drivers of the market within Latin America are the expiration of production licenses, the need to comply with evolving environmental regulations, and the region’s increasing push toward sustainability. As many oil and gas reserves in the region begin to mature, particularly in major oil-producing countries such as Brazil, Argentina, and Mexico, companies are facing the reality of retiring older, less profitable fields.
The decommissioning process involves safely dismantling infrastructure and restoring sites to environmentally sound conditions. This is becoming increasingly important as Latin American countries adopt stricter environmental laws and regulations.
Beyond regulatory requirements, the economic necessity of decommissioning older fields and facilities also plays a pivotal role. As operational costs rise for aging infrastructure, many companies are opting to decommission older assets to refocus their capital on newer, more productive fields. Furthermore, as the region transitions toward cleaner energy sources, companies and governments must address the legacy of fossil fuel infrastructure, making decommissioning an essential part of the energy transition.
Despite the growth of the D&A market, there are several challenges that the region faces. One of the most significant obstacles is the lack of sufficient funding for decommissioning projects. Decommissioning offshore platforms or dismantling pipelines requires substantial financial investment, and in many cases, the financial burden can often be too much for operators to bare. In countries where oil and gas revenues are a major part of the economy, this financial challenge can become even more complex, as the state often has to step in to fund decommissioning in cases where operators are unable to pay for the safe removal of infrastructure.
Another challenge is the scarcity of local expertise and technology required to carry out these tasks. While the oil and gas industry in Latin America has a skilled workforce, decommissioning often requires new, specific training that many countries have yet to provide in sufficient numbers.
Additionally, the market’s development is hindered by regulatory uncertainty. Some countries in Latin America have evolving or unclear regulations around decommissioning, which can complicate long-term planning and investment decisions.
Despite these challenges, the Latin American D&A market offers considerable opportunities. The region’s large and aging oil and gas infrastructure is a significant driver for decommissioning services. Countries like Brazil, Mexico, and Argentina offer substantial opportunities for international investment into D&A activities.
As the energy landscape shifts towards renewable energy, Latin American countries are emphasising sustainable decommissioning practices, focusing on environmental restoration, and waste management. This presents a chance for innovative solutions and technologies to be implemented on a wider scale.
International collaboration and partnerships are also becoming more common. Several multinational oilfield services companies, along with local firms, are forming joint ventures to navigate the region’s waters and overcome the financial challenges.
Expro, an energy services provider with capabilities spanning well construction, well flow management, subsea well access, and well intervention and integrity solutions, has won a significant contract for the provision of a well decommissioning solution.
The company has agreed to provide a surface fluid management package and its market-leading 7-3/8” large-bore subsea test tree assembly (SSTTA) with surface tree and controls, providing dual barrier and disconnect capability to facilitate re-entry into the subsea wells.
The contract is reportedly valued at more than US$10mn and will see Expro plug and abandon 52 wells – many of which the company had previously been in the construction of.
“Having been involved in the development phase for many of these fields, we have gained a life of well experience that will be invaluable for this P&A campaign,” said Iain Farley, Expro’s Regional Vice President for Europe and Sub-Saharan Africa. “Our expertise and know how will help deliver key technical and commercial benefits for the client across the project.”
In receiving the contract, Expro drew attention to its unrivalled portfolio of standard and bespoke subsea solutions. The company offers subsea well access systems that interface with any Christmas tree type and can operate in open water or within a drilling riser with blow-out preventer. Expro’s surface well test systems equally provide industry-leading solutions that can be configured to specific well conditions and customer requirements.
“The contract reinforces our reputation as the leading provider of subsea safety systems and surface well test equipment, including within the P&A sector,” Farley added. “It demonstrates our commitment to delivering best-in-class equipment, allied with the highest standards of safety and service quality that Expro is renowned for.”
The United Kingdom and Australia have formed a partnership agreement to strengthen cooperation on offshore oil and gas decommissioning.
Announced in a joint statement, the governments of the UK and Australia have sought to establish the partnership that builds on the recently-signed Australia-UK Climate and Energy Partnership. It will combine the 40 years of UK expertise in the North Sea with the blossoming decommissioning services market in Australia.
The agreement was signed by Australian Minister for Resources and Minister for Northern Australia, Madeleine King, and the UK Minister for Services, Small Businesses and Exports, Gareth Thomas. Together, they agreed to encourage cooperation in areas including supply chains, knowledge and skills, regulations, and financing while supporting engagement between UK and Australian businesses engaged in decommissioning.
Furthermore, it will establish a working group comprising industry representatives, academic partners, and regulatory bodies to develop a collaborative framework and partnership programme. This will identify viable decommissioning projects that would benefit from cooperation, delivering these in accordance with international quality and sustainability standards.
Through the identification of capability, equipment gaps and strengths, the group will also facilitate the sharing of decommissioning expertise between the two countries with knowledge transfer opportunities.
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