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Too soon to dismantle CI platforms Two more offshore structures head for the mothballs but it will likely be a long time before the demolition crews arrive on the scene Alan Bailey Petroleum News
As production slowly declines from the offshore oil and gas platforms in Alaska’s Cook Inlet, inevitable questions arise regarding when the platforms will reach the end of their useful lives, and how and when the platforms will ultimately be removed and scrapped.
The wells on a platform will be shut-in at a point when oil or gas production from the platform drops below the level required for economic viability. But, although oil and gas leases typically require the removal of the field infrastructure from a defunct field, the fact that production from a platform has ceased does not necessarily trigger immediate removal of the platform. Instead, a shut-down platform may be mothballed, or “lighthoused” to use oil industry parlance, for several years, until a final decision can be made on any future use of the platform, and on how exactly the platform will be dismembered and removed.
Two lighthoused So far, no offshore platforms have actually been removed from Cook Inlet. In fact, just two platforms, Chevron’s Baker and Dillon platforms at the northern and southern ends of the Middle Ground Shoal field, have been lighthoused in response to the declining oil and gas production trend. Dillon was shutdown in 2002 and Baker was shutdown in 2003, with both facilities being placed in lighthouse mode in 2003, Chevron spokeswoman Roxanne Sinz told Petroleum News. The wells drilled from the platform have not been plugged and abandoned, but remain shut in, with just one well on each platform producing natural gas to provide platform power and heat, Sinz said.
Marathon Oil Co. has proposed the lighthousing of two other platforms, the Spark and Spurr platforms in the North Trading Bay unit on the west side of the Inlet, Jonne Slemons, petroleum land manager in Alaska’s Division of Oil and Gas, told Petroleum News Sept. 1. Production from these platforms has ceased and the company has started plugging and abandoning wells, Slemons said.
But a major factor in deciding when to eventually dismantle any platforms will likely be the economies of scale achievable from the removal of a series of platforms in a single large project — major costs such as that incurred in bringing from the Lower 48 the heavy equipment required to lift and haul out the massive components of a platform would be best spread across as many salvage exercises as possible.
“If you’re looking at actual dismantlement and removal, then the economies of scale that can be realized by a shared rig become a huge issue and a huge help, if you can arrange it,” Slemons said.
State requirements And another critical factor in the dismantlement of the platforms will be the State of Alaska’s specification of what exactly constitutes platform removal, a specification that DOG has yet to determine.
As more platforms become lighthoused and the day when platforms will need to be removed approaches, the state is considering the various removal options and what stipulations it will require.
“We’re certainly coming up on this and the division is working it actively,” Slemons said. “However, we have not reached any hard and fast conclusions about what state requirements might be, and what kind of input we would want from the companies and other stakeholders.”
The division will determine some dismantlement options and then discuss these options with the oil companies, and with organizations such as the Cook Inlet Regional Citizens Advisory Council and Cook Inlet Keeper, to develop a final state position. The state anticipates a back-and-forth conversation on the requirements and, at the moment, it would be premature to speculate on what those requirements might be, Slemons said.
And, just to complicate the issue, the wide variety of platform designs in the Cook Inlet will drive a need to consider the requirements for each platform individually.
“How it would be accomplished in each case is always going to be individually treated by the state,” Slemons said.
Future uses? The other variable in the platform removal equation is the question of whether all possible use has been made of a platform, or whether the platform might serve some future role in the development of additional hydrocarbon resources.
“That’s why we have purposely not required full-blown, detailed DR&R (dismantlement, removal and restoration) plans, because we wanted to leave some discretion to the (DNR) commissioner to decide at what point we wanted to move ahead with that,” Slemons said.
Future platform roles could, for example, include exploration of new prospects either through directional drilling out from the platform, or by deep drilling below the exhausted reservoirs.
“We don’t want to preclude that kind of activity from happening, especially given the gas situation in Cook Inlet,” Slemons said.
So, the state is in no rush to insist on platform removal as long as the platforms remain in good structural condition. And the state checks on the condition of each platform annually, Slemons said.
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