Decommissioning forecast for deepwater
fxed platforms and compliant towers.
Annual Oil structures Cumulative
Annual Gas structures Cumulative
20172019 2021202320252027202920312033203520372039 20412043204520472049205120532055>2056
New analytical model improves
In part six of this series on the deepwater Gulf of Mexico structure inventory, pro- duction models and cash flow analysis are combined with scheduled removals on idle and marginal structures circa 2016 to generate a 20-year decommissioning forecast. Be-
tween 27 and 51 deepwater GoM structures are
expected to be decommissioned through 2031,
and between 12 and 25 structure removals are
expected over the near term from 2017-2022.
The approach taken is to apply standard economic models, where applicable, and scheduled
removals where economic models cannot be applied. All structures with NR < EL are scheduled
for decommissioning using user-defined model
assumptions, while all structures with NR >
EL employ a production forecast model. Since
side track drilling and tiebacks require capital
spending and are speculative, they are excluded
from consideration, as described in part five.
Three scenarios are used to tie the structure
classifications and model assumptions defined
in part five together – a ‘base’ (expected) case,
a ‘slow’ (or low) case, and a ‘fast’ (or high) case.
For producing structures, economic limits
are used to determine the EL-yr assuming no
capital spending outside of normal maintenance activities, and are adjusted by the user-defined parameter τ based on historical data.
The base case parameters apply average
data on economic limits, removal times, and
$60/bbl oil and $3/Mcf gas price.
Auxiliary structures have an indeterminate
decommissioning date, and although a portion
of idle structures will enter this class in the
future, we assume no transitions occur beyond
the current inventory.
The slow/low case model parameters are se-
lected to schedule idle structures and structures
producing below their economic limit slower
than the base case schedule ( 10 years versus
five years), and for all other structures, decline
curve estimates are used with EL-yr delays based
on the upper range of historic removal times.
Mark J Kaiser
Center for Energy Studies,
Louisiana State University
Academy of Chinese
Structure class scenarios and model assumptions
Class Base Slow/Low Fast/High
Idlestructures U( 5) U( 10) U( 3)
Platforms, NR< EL U( 5) U( 10) U( 3)
Platforms, NR > EL EL-yr + τ1 EL-yr + τ1 EL-yr + τ1
Floaters, NR > EL EL-yr + τ2 EL-yr + τ2 EL-yr + τ2
EL ($ million) 2. 7 0.5 0.5
τ1 (year) 5 10 3
τ2 (year) 2 2 2
Oil Price ($/bbl) 60 80 40
Gas Price ($/Mcf) 3 4 2
Roy(%) 16.67 16.67 16.67
Note: U(T) represents uniform removal of 2016 inventory over T years and EL-yr is determined by decline curve model.