Managing Repurposed Offshore
The current trend of removing fixed or floating offshore Oil and Gas platforms either for demolition or for the rigs-to-reefs program misses the opportunity of creating new revenue streams, particularly in the ever-expanding energy transition arena. Repurposing these platforms for green energy or other commercial use involves, by default, managing aging infrastructure. This presents challenges to ensure the facilities continue to preserve the safety of the environment, life, and property for the extended life while creating acceptable return on investment. This needs to be achieved in a holistic way where the risks of catastrophic HSE, engineering, and business failure are managed to acceptably low levels.
The six interactive factors that govern the feasibility of repurposing an aging offshore platform and, where applicable, the associated pipeline(s) are location, regulations, infrastructure integrity, operations, ESG, and risk. Managing these critical factors is a holistic and interactive process that includes technology, regulatory, and business drivers. The process is ever evolving during the asset life and must be kept evergreen through periodic reassessments over the extended operational life. HSE (health, safety, and environmental) issues must be considered in each of these factors.
Whether a platform under consideration for repurposing is decommissioned and awaiting removal or if it’s still in production and nearing the end of the field life, the unknowns are largely the same when assessing the viability of a reuse concept.
Location: In addition to the obvious of here is it and what the water depth is, what’s needed are other details such as metocean conditions and the proximity to onshore facilities for operational support and getting the new production to market. There may be other factors depending on the situation.
Regulation: When a platform is repurposed, regulations other than those familiar to the conventional offshore Oil and Gas industry may apply and these are ever-evolving, which can bring surprises.
Infrastructure Integrity: This is a broad subject covering all the technical codes & standards that must be addressed in assessing ‘fit for purpose’ of the structure (and pipelines if applicable) plus all upgrades, modifications, and additions needed for the intended new service.
Operations: The full life cycle of the planned new operations must be carefully examined. It would normally include normal and upset operational conditions, emergency response, and inspection and maintenance. Both technical and human factors need to be considered.
Risk: All the above must be subject to assessments that examine and rank the risk of failures over the full life cycle. Typically, these risks would be defined with respect to health safety and environment (HSE), engineering, operations, and business cost and impact.
ESG: Environmental, social, and (corporate) governance (ESG) impacts are likely to be a factor in investment decisions and in gaining acceptance by the community. An evaluation of the environmental and sustainability concerns associated with the transition process and future operations is a key factor.
Creating an analytical decision model of the entire offshore asset that includes all these aspects will be hugely beneficial in order to evaluate and compare the capex, opex, operational efficiency, engineering integrity, safety, environmental and social parameters. This would allow the complete picture to be fully understood and “what if” considerations to be made, making it invaluable for all parties involved including investors, the operator, and regulators.
To learn more about how Endeavor Management can work with you to repurpose these platforms for green energy or other commercial use reach out to us today.