COVID-19, a low oil price and an industry facing increased environmental scrutiny has resulted in a turbulent 2020 for the oil and gas sector. As many North Sea fields reach maturity, stakeholders will be carefully considering their options including decommissioning and diversifying the energy mix.
The National Decommissioning Centre (NDC) (a partnership between the University of Aberdeen, the Oil & Gas Technology Centre (OGTC), and industry) has said that efficient late-life management and decommissioning of assets is a "societal and economic necessity". Emerging tech and artificial intelligence (AI) can help achieve this. However, the contribution AI and new technology could have on decommissioning cannot be considered in isolation. The picture is complex, with a variety of issues at play.
Successful use of AI requires investment, innovation and diversification. Recent developments have seen TAQA team up with Texo DSI for the use of drones in collecting data for maximising economic recovery in late life assets but also planning for decommissioning. Spirit Energy has been working with OGTC on the trialling of new tech for plugging and abandoning wells, and Neptune has also been making use of drone tech to generate 'walk-throughs' of the Cygnus platform for maintenance and inspection to be managed onshore. In another OGTC collaboration, CAN Group has diversified and developed a new data visualisation business stream predicted to achieve cost savings of around £1.6million per year.
Over the last 18 months the OGTC, Opportunity North East and other industry bodies have launched various initiatives with the aim of promoting the use of new technologies in offshore operations and decommissioning. Operators are keen to engage, but more commercial innovation is required for these technologies to have significant impact. Entering into bespoke contracts, revising contracting principles or using framework agreements with call off capabilities as the tech is developed can all support innovation in a low-cost, efficient manner. Another approach could be overhauling the way decommissioning is managed in the North Sea. Lessons might be learned from an innovative Canadian model where liability for undertaking decommissioning work is transferred to a third party (making the actual decommissioning work more cost effective), before the decommissioned asset is sold back to the duty holder. Such a drastic change in the UK would of course require input and engagement with the regulator.
Use of AI also needs to be compliant with regulatory requirements. Operators should engage with the Offshore Petroleum Regulator for Environment and Decommissioning through every stage of decommissioning. In addition, the Oil and Gas Authority's proposed revised strategy should be considered. This intends to reposition the "principal objective" of MER UK against the backdrop of the UK Government's commitment to achieve Net Zero by 2050. This, combined with the fluctuating oil price, may mean that a decommissioning boom is just around the corner. AI has the potential to significantly contribute to achieving cost efficiencies and Net Zero.
COVID-19 has also put energy transition into sharper focus. Recognising the importance of AI and new technology both for the economic recovery post-pandemic and longer-term economic sustainability, the Scottish Government recently commissioned a review in which education and talent were identified as being key to the success of the Scottish technology ecosystem.
This theme can be readily applied to the oil and gas industry. There is a massive knowledge and skills base in the "North East corridor" to draw from, with decades of industry experience. This experience should be retained and embraced. Decommissioning is the perfect opportunity to springboard these skills into the energy transition. The Acorn CCS project at St Fergus involves the repurposing of the existing Goldeneye pipeline and the development of a CCS hub and is a current example of harnessing existing skills with new tech, all while taking the next step in energy diversity.
Considering the examples discussed, AI, while no silver bullet, certainly has the potential to drive cost-efficiencies in decommissioning while supporting energy transition and ultimately, the long-term sustainability of the industry.
Read the latest issue of the OGV Energy magazine HERE.
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