Oil & Gas Well Plug and Abandonment

XIV Lillehammer Energy Claims Conference

24-26 February 2010

John Reid

Plug & Abandonment

All wells at the end of their life cycle willundergo permanent plug & abandonment

Entails setting cement and / or mechanicalplugs to seal of pay zones, potential leakpoints, fresh water zones, and at surface

Well P & A Statistics

Up to 6,500 offshore platforms worldwide with totaldecommissioning costs estimated to be in excess ofUS$50,000,000,000

Between 2000 and 2010 an estimated 25,000 offshorewells have / will undergo permanent P & A

The majority are planned as part of an Asset or Fielddecommissioning programme

Many however are necessitated prematurely as a resultof facilities and / or wells being damaged.

P & A Requirement Hierarchy

Regulatory Authority

Industry Standards / RP

Operator Best Practices

World Wide Oil & Gas Real Estate

MMS

UKOOA

APPEA

NEBC / CNOBP / CNSOBP / ERCB NPD

DPR

PNGRB

ANP

MMS

Permanent P & A Tasks

Plugging Cement and / or Mechanical Cement retainers Cement plug - displacement Cement squeeze Profiled / Bridge Plug

Tubing / casing cement displacement Perforation / punch / milling / cutting

Tubing / casing site clearance Cutting, removal and recovery Wellhead removal and recovery

Surface Wells Solutions

Platform with surface wells.Topsides rig via riser.Cost Circa USD$1-2mm Tender jack up rig via riser.

Cost Circa US$1.5-5mm

Sub-Surface Wells - Rig Solution

Sub-surface wells. Mobile rig via subseariser. Cost Circa USD$6-10+mm

Sub-surface Wells Rigless Solution

Sub-surface wells. Rigless, from a DPSVvia subsea intervention lubricator.

Cost Circa US$2-5mm

M.S.L

Typical 5 Stage P & A

Seabed

Well Head Retrieval

Permanent P & A Challenges

Inability to re-enter well wellhead damage No vertical access Well condition - corrosion and integrity issues Inability to establish effective flow path for cementing Temporarily abandoned well problems Reservoir / formation problems Lack of accurate historical information

Formation Issues

XIV Lillehammer Energy Claims Conference