Offshore well abandonment: challenges and approach with DNV GL guideline of risk based abandonment

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1 Published by International Association of Ocean Engineers Journal of Offshore Engineering and Technology Available online at Offshore well abandonment: challenges and approach with DNV GL guideline of risk based abandonment Simon Ouyang a*, Eric Allen a a DNV GL, 1155 Dairy Ashford Rd # 315, Houston, TX * Corresponding author. simon.ouyang@dnvgl.com ABSTRACT When subsea fields are reaching the end of their productive lives, the aging assets will need to be decommissioned, of which the well abandonment operations can amount to two thirds of all decommissioning expenditures. Therefore, reducing the cost associated with this activity, without compromising safety is the premium goal owners are pursuing, especially with the current economic climate and low oil prices. It is imperative for the industry to explore and expand the current approaches in order to shrink the bill, of which can include: new strategic thinking; new methodologies; and the development of new and innovative technologies. To assist the industry in finding the most cost effective solutions in the offshore well Plug and Abandonment (P&A) area, DNV GL recently released a guideline for the risk based approach to plug and abandonment of offshore wells, which provides an alternative approach to the current access abandonment design. This paper presents the challenges of offshore well P&A in the Gulf of Mexico, the possible approaches to address these issues, and describes how the DNV GL guideline can be used for offshore well abandonment activities. Keywords: Offshore, Well abandonment, Guideline. 1 Introduction 1.1 Well P&A Status Throughout the world, there are growing numbers of aging offshore assets that will need to be decommissioned at the end of their productive lives. It is estimated that in the next fifteen years there are approximate 30,000 wells that need to be plugged and abandoned globally, of which about 30% are subsea wells. In the North Sea there are approximately 6,000 wells that will need to be plugged and abandoned, including 1,400 subsea wells. In the Norwegian sector, more than 350 platforms and over 3,700 wells eventually must be abandoned permanently. In the Gulf of Mexico there are more than 1,000 idle wells in BSEE s idle well list, which is indicated in Fig. 1.

2 72 Journal of Offshore Engineering and Technology (2017) 1: The total number is growing and it is estimated that more than 3,000 wells and 500 structures will need permanent abandonment in the near future. Fig. 1 The Status of Completed and Plugged Wells at All Water Depth in Gulf of Mexico (Byrd, 2015). 1.2 Major Challenges Well Plug and Abandonment is a critical process during the decommissioning phase of an assets lifecycle. Reducing cost, enhancing safety and complying with the regulatory requirements are always the premium goals the liability owners pursuing for. However, to achieve these goals there are challenges encountered for the industry including the following: Strategic thinking and mind changing It takes time for the industry to realize that decommissioning is not just a reverse process for installation, and decommissioning need to be considered in the early stage of design. However, strategic thinking especially at the current low oil price environment needs to be considered, namely: What is the threshold point to determine whether the assets need to be decommissioning right now, or keep them operation even under an unfavorable financial status? If a decommissioning decision is determined, what are the major considerations for the design of the well P&A? Should a one-size-fits-all approach deliver both acceptable quality and reasonable cost to the batch well abandonment? Should the wells with a low risk level take the equal actions compared to the high risk or High Pressure High Temperature (HPHT) wells since early planning of the abandonment? Without a reasonable foreseen plan the owners may lose the changes to select alternative approaches with the results of cost increasing and schedule delaying. Cost estimation and reduction Well P&A is a major process in Decommissioning operations and costs weights significantly high in the overall budget. The data from U.K. North Sea reveals that the P&A cost is approximately up to 63% of the total cost. (Oil & Gas UK Decommissioning Insight, 2015). In

3 Journal of Offshore Engineering and Technology (2017) 1: offshore Norway the P&A can easily contribute to the same amount or even higher than that of U.K. North Sea. In the Gulf of Mexico the well P&A cost weighs heavy in the overall cost due to the deepwater vessel cost. The accurate cost estimation is a challenge due to many factors including: ambiguous well data; extra contingency cost for the unknown situations under the Deepwater plan; or operational uncertainty. The primary cost drivers include water depth, well depth and structure, operation duration, methodology dependent and many decommissioning projects turn out to be over budgeted or the schedule is delayed. There is no doubt that reducing the cost and making accurate estimates is one of the primary goals the industry is pursuing with adopting new optimistic approaches, innovative technologies, and intervention tools and methodologies. Barrier design and management The establishment of barriers to reduce the probability of failures and hazardous and accident conditions, and limit possible harm and disadvantages is important for barrier design and management. During the barrier design phase, to ensure the barriers functions are safeguarded throughout the life, such questions would always be raised like: Where are the barriers and where should they be located? How many are required? Can the dual barriers be replaced with one longer barrier? The operators have to determine the barrier location (e.g. At Perforations, Casing Shoe or Cap Rock), methodology (Annular vs. Cut & Pull), validation approaches (Log, Tag/Weight Test or Pressure Test) depending on the actual well situation. The barrier performance and reliability should also be considered during the barrier design phase (Leeson, 2015). New approaches and technologies application Comparing to the traditional P&A approaches, rigless and riserless well abandonment approaches are significant to improve Deepwater well decommissioning operations. The rigless unit plays a key role to the safety operations and cost saving for the overall project cost. Rigless abandonment is a technical solution for well abandonment from those platforms where the derrick is non-functional. The derrick may have been removed, downgraded or otherwise not of sufficient capability to successfully carry out the well abandonment operation. The rigless abandonment unit allows the platform crane to perform other operations while cutting the casing because the power swivel is supported by the unit. Riserless abandonment may use a lubricator and intervention well control package instead of a riser to perform the abandonment activities. During P&A operations and processes, typically three or more trips are required to cut and remove all the casing strings. To reduce time and cost of cutting and pulling multiple strings, many service companies are exploring integrated cutting tools or the development of multipurpose tools. For example, Bake Hughes s Harpoon Cut & Pull Spear is applied for one-trip multiple attempts solution (Joppe, 2015). Weatherford has the tool called Endura dual-string section mill (DSSM) which enhances the efficiency of P&A operations by milling both inner and

4 74 Journal of Offshore Engineering and Technology (2017) 1: outer casing strings (Segura, 2015). Besides the traditional cement approach and material to seal a well, new techniques such as the reverse cement placement technique (Gubanov et al., 2014) adopted or new materials include resin material explored will reduce the cost and secure successful well seal. Regulatory Compliance Currently, certain regions have the risk-based regulations related to well operations and well integrity. The regulations for petroleum operations offshore and on land in Norway are riskbased and give greater emphasis to principles for reducing health, safety and environmental (HSE) risks. Assessing design and operational risks for well abandonment is required per NORSOK Standard D-010:2013 for well integrity in drilling and well operations. This well integrity standard also use a risk-based approach which specifies The process of managing well integrity by operating wells in compliance with operating limits for all well types that are defined based on exposure of risk to people, environment, assets and reputation per ISO/TS :2014 for Well Integrity. However, most of the P&A regulations worldwide have the prescriptive requirements for the numbers and size of plug required, and the requirements are the same for all types of wells. In the U.S. Outer Continental Shelf, the main regulatory rules for the enforcement including NTL 2010-G05 known as idle Iron policy and 30 CFR 250 Subpart Q. The rules are prescriptive and mainly for barriers and for eternity. The advantage is that it is clear and straightforward, but the prescriptive standards add cost and may not ensure effective barriers. Due to this reason many operators stipulate their own goal oriented standards which are flexible, but may require more intensive oversight. While the regulations have the minimum prescriptive requirement, the operators always refer to their own standard to minimize cost without compromising barrier quality. Another issue is the regulatory approval case for new technology and work processes apply. 30 CFR 250 requires the operators to develop approval case documentation to demonstrate a level of safety and environmental protection that equals or surpasses current BSEE requirements for BSEE s approval. 1.3 Introduction of DNV GL Guideline for Risk-based abandonment of offshore wells Traditional P&A methods tend to be time consuming, costly and have remained unchanged despite technological advances across many other aspects of the industry. Furthermore, the current approaches to the regulations are prescriptive which represents a conservative interpretation of past experience, under which the high risk and hazardous wells have being paid the equal attention to the lower risk and benign wells. Therefore, DNV GL explores a risk approach methodology in which both environmental and safety risk aspects will be key factors. This new DNV GL Risk-based abandonment of offshore wells guideline is intended to provide an alternative approach, based on functional requirements and environmental acceptance criteria through a framework to assess abandonment designs. This is consistent with offshore engineering practice and is intended to facilitate cost efficient solutions including the development of new technology. The guideline is written from the system perspective which considers marine environment, geological formations and well conditions. The well P&A guideline differentiates the environmental risk exposure relative to hydrocarbon composition,

5 Journal of Offshore Engineering and Technology (2017) 1: and establishes the site-specific environmental risk acceptance criteria. It takes site specific considerations and tailor-made design for well abandonment, and both the risk acceptance criteria is site-specific and the abandonment well design can be well-specific. Therefore it is better suited for different wells and allows cost-saving from the least critical wells. This guideline may be applied as a basis for risk-based decision making. It can be applied for the evaluation of well abandonment designs, well abandonment design optimization in relation to cost and material, evaluation of environmental performance for P&A well, independent assessment and verification, guidance and quality assurance of P&A planning, and also stakeholder communication. 2 Methodology The objective of the DNV GL guideline is to provide a risk-based framework for qualifying well abandonment design and permanent offshore well abandonment. A systematic approach is applied to perform the risk assessment which should include environmental and safety risks. The risk analysis results are worked as inputs for risk evaluation based on the acceptance criteria. The final qualification is made to conclude whether the well abandonment design is in compliance with the recommendations in the guideline and also the regulatory requirements. The general methodology and working processes are recommended as the following five steps (Fig. 2): Fig. 2 Elements in well abandonment risk assessment (DNV GL, 2015).

6 76 Journal of Offshore Engineering and Technology (2017) 1: Step 1 - Establishing the risk context It is important to establish the context before starting or executing the risk assessment process for risk management as described in ISO The main elements in the well abandonment risk assessment are in Fig. 2, which illustrated the risk context. In order to perform the risk assessment, the main inputs to the risk profile need to be identified. The four main categories of inputs for the risk assessment are: Well specific data (well design, well history and current status) Geology data (reservoir and overburden condition) Environmental data (environmental resource overview) Metocean data (ocean current including salinity and temperature profiles) Before assessing well abandonment design, the basic design principles should first be determined. The abandonment design should prevent environmental harm until the original geological barriers are re-established while maintaining safety standards. Furthermore, the design should be based on the established context through the investigation of hydrocarbon-bearing formations, where the maximum anticipated flow potential should form the basis for the well abandonment design. The other major areas to be considered include the following: Flow potential sources Abandonment of wells is concerned with the isolation of rock formations that have flow potential. An assessment of the flow potential of individual formations penetrated by the well is a key to the design of the well Barriers. A flow potential, in this context, is defined as a hydrocarbon-bearing formation containing moveable hydrocarbons large enough to have a potential environmental or safety impact. The flow potential for hydrocarbon-bearing formations should be categorized based on the maximum anticipated flow potential for the identified hydrocarbon-bearing formations and the categorization of the flow potential is illustrated in Table 1. Table 1 Categorization of Flow Potential for Hydrocarbon-bearing Formations (DNV GL, 2015). Categories of flow potential No Flow Potential Limited Flow Potential Moderate Flow Potential Significant Flow Potential Definition Hydrocarbon-bearing formations that does not have moveable hydrocarbons. Hydrocarbon-bearing formations where moveable hydrocarbons present or in the future cannot under any circumstances have an environmental or safety impact. Hydrocarbon-bearing formations where moveable hydrocarbons present or in the future may have an environmental impact, but no safety impact. Hydrocarbon-bearing formations where moveable hydrocarbons present or in the future may have both an environmental and safety impact.

7 Permanent well barrier principles Journal of Offshore Engineering and Technology (2017) 1: The permanent well barrier design should be fit-for-purpose and take into account the effects of any reasonably foreseeable chemical and geological process. A permanent well barrier may consist of any material or combination of well barrier elements (WBE) as long as it provides the following functionalities: Withstand the maximum anticipated combined loads to which it can be subjected. Function as intended in the environments (pressures, temperature, fluids, and mechanical stresses) that can be encountered throughout its entire life cycle. Prevent unacceptable hydrocarbon flow to the external environment. (a) Example of permanent abandonment for one hydrocarbon bearing formation with limited flow potential (DNV GL, 2015) (b) Example of permanent abandonment for two hydrocarbon bearing formations with moderate flow potential in overburden (DNV GL, 2015) (c) Example of permanent abandonment for hydrocarbonbearing formation with moderate flow potential and with limited flow potential in the overburden (DNVGL 2015) Fig. 3 Examples of permanent abandonment For hydrocarbon-bearing formations with moderate or significant flow potential, two independent barriers should be included in the well abandonment design, which can increase the

8 78 Journal of Offshore Engineering and Technology (2017) 1: level of reliability. However, based on the various scenarios of hydrocarbon-bearing formations and well conditions, different type and numbers of well barriers can be set up to ensure safety and reliability while mitigating the associated risk. The examples above are illustrations that prove it is unnecessary for the wells to have the same type and numbers of barriers. Fig. 3(a) provides an example of a well abandonment design with one hydrocarbon-bearing formation with limited flow potential including a sample well barrier schematic; Fig. 3(b) provides an example of a well abandonment design with two hydrocarbonbearing formations with moderate flow potential; and Fig. 3(c) provides an example of well abandonment design with one hydrocarbon-bearing formation with limited flow potential in the overburden and one hydrocarbon-bearing formation with moderate flow potential. With this approach, the process is used to focus on the wells with moderate or significant flow potential, which can simplify the processes for the wells with limited flow potential and save the associated cost. 2.2 Step 2 - Identifying the permanent well barrier failure modes The well barrier failure mode needs to be identified for each specific permanent well abandonment design. The failure mode identification process includes: Identification of failure and degradation mechanisms and categorization of threats according to established consequence categories. Identification of additional threats related to unique aspects of the well abandonment design, for example: Unique features of the subsurface under consideration. Technical or organizational aspects that are outside the well operator s experience. Well completion design and integrity Identification of interdependencies between different failure modes related to failure, including potential for cascading. Identification of effects that may increase likelihood of occurrence or severity of consequences. The potential failure modes for such analysis are listed in table 2.

9 Journal of Offshore Engineering and Technology (2017) 1: Table 2 Generic Well Barrier Failure Modes for P&A Wells (DNV GL, 2015) Potential failure mode Potential cause mechanism Risk management strategy Main bore Insufficient barrier length in main bore Barrier function degraded in main bore low top of barrier barrier slippage density miscalculation incorrect barrier density operational issues permeable barrier high barrier shrinkage leads to increased porosity and stresses that may cause a micro-annulus to form include functional barrier length assessments into quantitative models perform sensitivity studies as to the flow potential through and around these barriers Casing Corrosion of casing Yielding of casing due to pressure in well well fluids exposure or long term exposure well loading over time including geological forces formation loads perform sensitivity studies as to the flow potential through and around these barriers include formation aspects and time perspectives Insufficient barrier length in annulus slippage due to inadequate density or losses not able to perform squeeze job include functional barrier length assessments into quantitative models with sensitivity studies Annulus Degradation of annulus barrier channeling / lack of bonding CO 2 corrosion H 2 S corrosion magnesium chloride degradation thermal cracking and/or de-bonding (microannulus) due to Joule-Thomson effect during injection into, e.g., depleted gas reservoir pre-existing channels pre-existing micro-annulus perform sensitivity studies as to the flow potential through and around these barriers Contamination of annulus barrier poor mud and filter cake removal leaves a route for hydrocarbons to flow up the annulus high barrier shrinkage leads to increased porosity and stresses that may cause a micro-annulus to form Formation Overpressure of formation Fluid exposure Geological barrier formations build-up of pressure over time injection nearby degradation effects over time potential to use formations as an additional well barrier, if possible evaluate the formation characteristics, the need for cross-flow prevention and natural leakage/seepage identify if compacting formations or aquifers can be used as permanent barriers

10 80 Journal of Offshore Engineering and Technology (2017) 1: Step 3 - Performing risk analysis After the well barrier failure modes are identified, the risk analysis can be performed which should include the associated HSE risks. The risk analysis should be focused on the following aspects: Analyze the flow potential In order to access the magnitude of the consequence of hydrocarbon flow, flow potential analysis should be performed to determine the maximum flow potential and hydrocarbon content and composition in hydrocarbon bearing formations penetrated by the well. The assessment should be performed using the maximum anticipated flow potential from the identified hydrocarbonbearing formation. Map the Valued Ecosystem Components (VECs) In order to establish a site specific background map of the Valued Ecosystem Components around a given well, a list and map of valued ecosystem components and a categorization of their values need to be provided, which should be used in the risk evaluation. Simulate the dispersion modelling In order to forecast the transportation and destination of the identified hydrocarbon flow potentials, the three-dimensional dispersion modelling should be used. The model should calculate and record the distribution (as mass and concentrations) of hydrocarbons on the water surface, in the water column, and in the sediments, and the results from the dispersion modelling are used in the risk analysis. Conduct the impact analysis Combining with the flow potential analysis results and the dispersion modelling results, the impact analysis can be performed which should cover the environmental risk and the safety risk factors. The risk results for each specific well can compose of the consequence analysis (flow potential, mapping and valuing of VECs and marine dispersion) and the likelihood analysis. 2.4 Step 4 - Performing risk Assessment The outputs from the risk analysis steps is then used to conduct the risk evaluation and assessment, which will assist in decision making and comparison of the well abandonment design relative to risk acceptance criteria. In order to determine whether the outcomes of the risk evaluation are acceptable or not, the risk acceptance criteria need to be established as follows: Environment risk acceptance criteria

11 Journal of Offshore Engineering and Technology (2017) 1: The environmental risk acceptance criteria should be based on hydrocarbon exposure of the identified VECs. Environmental risk acceptance criteria for different compartments (sea surface, water column, sediments) should be based on the following: Proportion of identified VEC(s) exposed to a defined threshold value for hydrocarbons. Probability that the proportion of VEC s is exposed to a concentration above the defined threshold value. Safety risk acceptance criteria Wells for permanent abandonment should be categorized based on their potential for adverse safety consequences. 2.5 Step 5 - Conducting qualification for well abandonment design In order to qualify whether the proposed design complies with the risk acceptance criteria, the well abandonment design qualification is to be conducted, which is the final step in the risk assessment framework illustrated in Figure 3-1. If the risk associated with a given design is found to be unacceptable, a new design should be proposed and assessed until an acceptable design is found. By using this method, the result is a qualified well abandonment design that measures up to the quality and standards used in this guideline. 2.6 DNV GL roles for 3rd Party well Qualification Based on the guideline, DNV GL s role is to be a 3rd party, where active verification is performed to qualify well abandonment designs. A Statement of Conformity can be issued by DNV GL as a statement confirming that verification of documents and/or activities has concluded that the well abandonment design, complies with the recommendations in the guideline and also the regulatory requirements. 3 Conclusion The practicing of today s prescriptive barrier requirements can lead to costly P&A well designs, and currently many well P&A regulations in the world are prescriptive. It is illogical to insist on the same requirements for different well designs (e.g. a dry exploration well compared with a highly-pressurized oil-producing well), and a one-size- fits-all approach delivers neither acceptable quality nor reasonable cost savings. The industry needs a risk-based P&A approach in order to reduce the cost and increase efficiency while still maintaining acceptable safety levels. DNV GL believes that a new risk based approach to P&A could play a key role towards achieving that goal, and for this purpose DNV GL has released a new well P&A guideline in October 2015 to address the need for cheaper and smarter solutions while still protecting health, safety and the environment. The new risk-based well P&A guideline provides the framework for establishing and evaluating P&A wells individually using a risk perspective, and it will align with the growing consensus in the industry and help regulators to adopt such an approach.

12 82 Journal of Offshore Engineering and Technology (2017) 1: Acknowledgements The authors would like to thank the management of DNV GL for their permission and encouragement in preparing this paper. References Abshire, L., Desai, P., Mueller, D., Paulsen, W.B., Robertson, R. D.B. & Solheim, T. (2012). Offshore Permanent Well Abandonment. Oilfield Review, 24(1). Abshire, L., Hekelaar, S., & Desai, P. (2013). Offshore Plug and Abandonment: Challenges and Technical Solutions. Offshore Technology Conference, No Barclay, I., Pellenbarg, J., Tettero, F., Pfeiffer, J., Slater, H., Staal, T., Stiles, D., Tilling, G., & Whitney, C. (2002). The Beginning of the End: A Review of Abandonment and Decommissioning Practices. Oilfield Review, Winter 2001/2002. Buchmiller, D. (2015). Risk-Based Abandonment of Offshore Wells. PAF Seminar, Stavanger, October Byrd, B. (2015). State of the Market Overview of GOM Deepwater Decommissioning. Deepwater Decommissioning Workshop, Houston, February DNV GL(2015). Guideline for Risk-Based Abandonment of Offshore Wells. Report No , Rev. 0. Gubanov, E., Nana, D., Bogaerts, M., Moretti, F., Flamant, N.C.., & Kanahuati, A. (2014). Plug and Abandonment Using Reverse Cement Placement Technique in Deepwater Gulf of Mexico., Offshore Technology Conference, No Jahre-Nilsen, P. (2015). Reducing the bill for well abandonment. DNV GL (Online). Jeferies, K. (2014). Gulf of Mexico Well P&A Insight and Key Challenges. Deepwater & Mature Well Abandonment Summit Joppe, B. (2015). Subsea Well Plug & Abandonment. Deepwater Decommissioning Workshop, Houston, February 2015.

13 Journal of Offshore Engineering and Technology (2017) 1: Leeson, T. (2015). Abandonment Standards: How do we Best Reconcile Clarity with Flexibility? Decommissioning and Abandonment Summit, Houston, March Oil & Gas UK(2015). Decommissioning Insight 2015 Report. (Online). Segura, R. (2015). New Technology Development: Dual String Section Mill Deepwater Decommissioning Workshop, Houston, February Stokes, A. (2014). Decommissioning Costs Can Be Reduced, Offshore Technology Conference, No Biographies Dr. Simon Ouyang is currently a senior engineer working in the Subsea and Well Systems Section at DNV GL. DNV GL is a classification society with the purpose to safeguard life, property and the environment, and Mr. Ouyang is mainly working on the certification and verification of subsea equipment and systems in the Oil & Gas business unit at DNV GL. Mr. Ouyang has over 17 years working experience in the Oil & Gas industry including 9 years experience in the subsea and offshore projects. He has the mechanical engineering background and worked for DNV GL, American Bureau of Shipping and China Petrochemical Corporation. Mr. Ouyang got a Bachelor degree in Mechanical Engineering at Tianjin University in China in 1994 and a Ph.D. degree majoring in Industrial Engineering at Texas Tech University in Lubbock, TX in 2006.