New regulation on decommissioning enters final stretch and mobilizes industry

October 2, 2018

There is a joke among oil and gas engineers that there are three things you can not avoid in life: death, taxes, and decommissioning.

On the eve of the resolution of the ANP that disciplines the deactivation of oil and gas production systems enter into public consultation, industry and government move to trim last edges and reach a common denominator.

Regulator and industry still have some natural disagreements. The high number of players and different interests at stake seems to be a difficulty in reaching a result with a good degree of economic rationality. But everything indicates that there will be a definition soon.

Regulation is lagging behind the original deadline. The draft resolution was expected to be brought for public consultation in February this year. The proposal began to be elaborated in September of last year and in that period underwent many changes. The new deadline is now December.

The changes concern, above all, the preservation of the economic activity and the protection of the environment and navigation safety.

The safety of navigation is a concern of the navy. In the Campos Basin, where there is a great density of platforms and navigation in general, the removal of the upper structures of the platforms can create a minefield for vessels that travel through the region.

“It is necessary to identify areas where platforms have been cut to avoid accidents with unsuspecting vessels,” warns the head of the Department of Research and Works in Navigable Waterways, captain Marcelo da Silva Coelho.

The economicity of the activity involves several aspects. From the decision whether or not to withdraw from the seabed structures, to the actual authorization of a project. Given this, the ANP wants to have instruments to evaluate if, for example, the production of the area to be returned / decommissioned can be extended through new investments. There are also issues related to the use of structures such as artificial reefs or tourist attractions.

Comparative analysis

The best alternative to preserve the economics of the projects seems to be the comparative analysis of the different options that are at hand. Often, in international experiences, these analyzes have led to the conclusion that it is better to leave the structures at the bottom of the ocean than to move an entire service chain to withdraw them. However, in order to have this analysis it is necessary that the criteria is well defined and is what the regulator proposes to do.

In industry, there is a growing consensus that, in line with safety and environmental requirements, the ideal solution is to choose the lowest cost activity. “We need to change the mindset of decommissioning,” says Shell’s decommissioning leader, George Oliva.

Regarding the environment, there are several concerns, such as Coral Sol, a foreign species that, despite its beauty, kills native species of coral, causing damage to the marine fauna. “In some cases, it has to be assessed whether removal does not have more impact than leaving facilities where they are,” explains Destri Consulting’s Mauro Destri, who also warns of impacts on rhodolites – algae occupying the bottom of ocean and allow the existence of coral reefs.

The generation of waste is also a factor to consider when dismantling these systems. Only decommissioning of platforms P-07, P-12, P-15 and P-33, FPSO Rio de Janeiro and FPSO City of Rio das Ostras include 26 anchors (31 t), 48 wet Christmas trees (960 t), eight manifolds (2,400 t), among other equipment.

Predictability is key factor

One of the main focuses of the industry is the opportunity to create a platform decommissioning market in the country. In the world, it is estimated that US $ 160 billion will be spent with the deactivation of platforms, without revenue generation. Half of the costs are relative to wells. Underwater platforms and systems represent 35%.

In Brazil, according to the Navy, there are 191 platforms between fixed and mobile, of which 49 are out of operation and will need to be dismantled.

Despite knowing the number of platforms that will be decommissioned, the great difficulty for the formation of this market is to have a predictability of what will be deactivated in a certain time horizon. “The bodies are discussing a lot of details, but what you need to have, especially, is predictability,” says Jon Clark, EMEIA (Europe, Middle East, India and Africa) Oil & Gas Business Leader.

New regulation

The ANP recognizes that planning is one of the main uncertainties associated with the decommissioning of E & P facilities. The proposal for a revision of the regulation provides that oil companies report, five years in advance, the planning of decommissioning activities in the event of the closure of field production. When the abandonment is partial, three years. The project must be submitted to ANP, Ibama and Marinha simultaneously. Each body will consider different aspects in its analysis.

“The difficulties of planning decommissioning hamper the supply chain of seeing business opportunities,” says the agency’s Decommissioning Coordinator, Edson Montez.

The comparative analyzes will take into account three alternatives: removal of all structures, partial removal or maintenance of all in the location. In order to make a decision, safety, environmental, technical, social and economic aspects will be taken into account. In case of leaving the equipment, it will be necessary to do environmental monitoring.

Source: Brasil Energia

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