Opinion

Well Abandonment - Accurate Costing


Below, AGR's Senior Technical Consultant discusses how probabilistic planning can solve key abandonment challenges.

In recent years there has been an increased focus on the field decommissioning and well abandonment with the associated costs for carrying out the operation. There seems to be a very wide variation in the estimated costs of the operations, especially in the area of well plug and abandonment.

Given the high cost of the whole process and the very large component that may be apportioned to well plugging and abandoning, as described in the Oil & Gas UK "Decommissioning Insight 2016", where the estimated cost for Well P&A for all UKCS Projects is 47% of total cost and for Subsea 69%, having a robust process for estimating Well P&A costs would be of major benefit to industry.

This suggests that there is room for a system that:

  • Standardises the process
  • Identifies Risks and the associated time and cost
  • Has detailed cost of services and equipment
  • Captures all the information in one place to avoid the “Excel Challenge”
  • Communicates the programme and the risks associated
  • Communicates the potential cost exposure to senior management.
AGR's P1™ software meets all of these requirements when planning the abandonment campaign. P1™ is designed for drilling operations and is ideal for the specialised area of well P&A.

The software allows the complete breakdown of the process into phases and each phase is then broken down into separate events. This is not dissimilar to how the normal planning would be carried out. The major difference is the identification and capture of risks and their impact on the project.

The software has a built in flow charting capability that makes communication of each event and the associated risk very simple. The example below is for a well P&A where there is limited information on the integrity of the cement in a casing section and the possible paths that will be followed by once this is defined by running a Cement Bond Log (CBL). The software captures the possible consequences of the poor CBL, it also captures all the steps required for the each option, both time and associated costs. 


The flow chart is ideal for communicating what the risks are in each phase of an operation and for prompting additional questions about the operation.

This lends itself to what can become a formalised process where a set of standard questions prompt responses that pull together all the information that is required for entry into the programme:
  • “How” will the operation be carried out
  • “What” equipment will be needed
  • “Who” Will need to be on site to do the work
  • “When” will the equipment and personnel be required
  • “Where” the equipment and personnel should be based
  • “Why” are we doing it this way, is there a better option?
Because P1™ runs a Monte Carlo Analysis it produces a range of time and cost similar to the graph shown below. The most important part of the graph is the potential risk exposure if all of the identified risks should occur.

As mentioned earlier all of the information is kept on one place and may be exported into an Excel format for inclusion in reports if required.

Cost Information - This can be very detailed and if required can show a possible distribution of costs, for example rig rates. It also details what phases of the operation costs are assigned to.

Currency Information - Exchange rates for different currencies

Phases - High level breakdown of the project

Events - Step by step breakdown, usually times are given as a distribution

Project Risk Information - These are risks such as weather, equipment failure.

Often abandonments are carried out as campaigns. There is an additional advantage to the software that allows multiple wells to be combined into a campaign for the final analysis.

Using P1™ software enables greater accuracy with justifications and assumptions captured so that as teams change out over time the understanding of decision process are still available and the project does not need to start over again.

For more details about the P1™ software, click here.

For other AGR software products, click here.


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petroleum softwareAGR Softwarewell abandonmentwell dataplugging and abandonmentsubsea abandonmentDecommissioningE&P Software

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