Rising to the Challenge: The Essential Role of Innovation in UKCS Well Decommissioning with Hogarth Energy

Back in May I was asked to present at DecomWeek. My contribution, entitled “Plugging the Wells – The brutal reality” was well attended and I was really pleased to see the robust dialogue it prompted with those who followed up with me afterwards.

Six months on and I’m looking forward to attending the sold out OEUK Offshore Decommissioning conference in St. Andrews. When it comes to well decommissioning, I am still a believer that we can learn from Stockdale & Watt. By balancing optimism with a realistic assessment of the current reality, together with applying constraints as a positive drive to innovate and implement, we can deliver in key three areas as we tackle the UK Continental Shelf (UKCS) well decommissioning challenge: namely, safety, cost and volume.

However, the updated realistic assessment highlights a fairly major change since May. Rachel Reeves got the keys to No.11 and our industry is now adjusting strategies as it reacts to the impact of her first, very recent budget. One thing for sure is that funds are even further constrained than previously, and this is impacting on business plans at all levels in the wells community. It is difficult to say exactly where these impacts will lead, but there have been a few early movers, publicly announcing their intent. These changes to the landscape in the UKCS may accelerate cessation of production on some assets, thus increasing the well stock to be decommissioned. They may also delay well decommissioning programs, which we all know are cost rather than profit centres. Budgets must be carefully planned and are hugely susceptible to change and uncertainty in fiscal policy, never mind oil and gas product prices. I really believe that a healthy oil and gas industry, as part of a pragmatic energy mix working towards net zero, is fundamental to enable safe, reliable and cost-effective well decommissioning and that government policy puts this at risk.

In a very healthy international wells market, demanding equipment and skills for drilling, well intervention and indeed well decommissioning, we need to look much deeper than the traditional “unit cost reduction” to enable the change that is required to realise the annual forecast of wells to be decommissioned here in UKCS.

We have all heard the proverb “Necessity is the mother of invention” and I believe that the well decommissioning market conditions are rife for innovation. We are a tremendously innovative community who must fully collaborate and bring that innovation to the well site. Failure to do so – I believe – could result in under-performance in well decommissioning at all levels. We must also learn from others and ensure we avoid a situation of “Orphan” or “Zombie” wells that has reared its head on land in the USA.

Innovative well decommissioning surface and down hole solutions, continuous improvement to guidelines and regulation and alternative contracting and funding models can be worked together to deliver change. Hogarth Energy creates value through wells for its customers through collaborative partnering, accessing knowledge and technology that provides safe and sustainable solutions that make a difference. I compliment the people and companies involved driving innovation and change and encourage industry to support and accelerate implementation of innovation at the wellsite.

The DecomMission wells workgroup which I lead, has recently agreed its charter, with a purpose of being “An influencing voice of well decommissioning, inspiring others to deliver fit for purpose well decommissioning through engagement, sharing and learning”.

We look forward to playing our part and engaging with you all to help our industry make a positive difference for the future, despite the many challenges we face.

The information and opinions contained in this blog are for information only.  They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice.  Before acting on any information contained in this blog, please seek solicitor’s advice from Gilson Gray.