Graeme Fergusson sees life within the demise of an oil area.
Five years in the past, the blonde-haired native of Aberdeen, Scotland had a reasonably typical position within the business, specializing in squeezing each drop of crude from reservoirs within the North Sea. But a brush with the worst oil hunch in a era despatched his profession on a detour and he’s now extra inclined to carry out final rites on a area than to maintain it alive.
Fergusson is the managing director of Fairfield Decom Ltd., which makes a speciality of dismantling offshore oil and gasoline platforms. It will not be as glamorous as frontier exploration, nevertheless it’s doubtlessly an enormous enterprise.
“Over $26 billion is to be spent on UK decommissioning by 2030,” stated Paul Main, a Wood Mackenzie Ltd. analyst centered on the upstream provide chain. By the center of the following decade, firms will likely be spending extra on eradicating redundant oil and gasoline services than creating new fields within the space, he stated.
Historic Slump. When Fergusson turned chief monetary officer of Fairfield Energy in 2015, the corporate managed the Greater Dunlin Area of the North Sea. Dunlin was an previous area, first found by Royal Dutch Shell Plc in 1973, however was nonetheless pumping. Then got here a historic hunch in oil costs, from above $100 a barrel in 2014 to beneath $30 two years later.
Cheap crude and looming upkeep prices meant the enterprise was not viable, Fergusson stated in an interview. In June 2015, Fairfield turned off the faucets at Dunlin after 37 years of manufacturing.
“We needed to convert and grow to be one thing else, which was the start of the Fairfield Decom story,” Fergusson stated. There was heaps to be taught as a result of the Greater Dunlin Area, which incorporates the Osprey and Merlin area, plus related infrastructure is “as difficult as it might probably get from a decommissioning perspective.”
Cleaning Up. Dunlin is a concrete gravity-based construction, not dissimilar to Shell’s Brent platforms. On the large submerged base sits a 20,000-ton construction made up of 30 modules, a drilling derrick, a flare increase and a helipad. Beneath the water are dozens of wells, a few of which had been drilled way back to the 1970s.
Fairfield Decom is structured as a three way partnership between Fairfield Energy’s guardian Decom Energy, Heerema Marine Contractors and AF Offshore Decom. Dunlin’s decommissioning course of is about two-thirds full. All 16 subsea wells have been plugged and deserted, plus 1 / 4 of the 45 platform wells within the space. The firm has eliminated subsea infrastructure and is now making ready to eliminate the topsides — essentially the most seen a part of an oilfield.
Shell truly constructed the Dunlin platform, however lately oil majors have been promoting ageing North Sea fields to smaller firms, in some circumstances additionally transferring the decommissioning liabilities.
In 2016, the biggest firms within the North Sea weren’t keen at hand over their decommissioning actions to smaller operators, stated Fergusson. “The dial has moved massively” since then as firms notice decommissioning isn’t their core enterprise, he stated.
The course of will be controversial, particularly for well-known firms like Shell. The Anglo-Dutch firm is searching for to depart the legs of its Brent platform in place, saying that eradicating them would pose a better environmental danger. Greenpeace opposes the plan and not too long ago boarded two of the sphere’s platforms, calling on the corporate to “clear up your mess!”
Fairfield has but to submit a ultimate decommissioning program to the federal government for the sphere’s concrete legs, every of which weigh as a lot because the Eiffel Tower.
Business Opportunity. So far, Greater Dunlin is Fairfield’s solely decommissioning venture, however Fergusson stated the corporate has drawn curiosity from a lot of North Sea gamers, from which it has “a lot of propositions.”
The UK Department for Business, Energy & Industrial Strategy has required operators to put aside 844 million kilos up to now to cowl decommissioning prices. Fairfield Energy, with its accomplice Mitsubishi…