* Offshore wells, huge platforms must be removed when oildries up
* New services promise to cut costs by around a third
* N.Sea biggest decommissioning market: https://tmsnrt.rs/2ELrjMm
By Shadia Nasralla
LONDON, Nov 27 (Reuters) - Scottish marine salvage groupArdent is adapting the tanksit used to refloat the Costa Concordia, the cruise ship wreckedoff the Italian coast in 2012, to decommission North Sea oilplatforms.
It is one of several companies trying new ideas to winbusiness in the market for dismantling disused oil platforms.
In Britain's ageing oil fields alone, the opportunitiescould be worth up to 17 billion pounds ($21.85 billion) before2025, according to industry body Oil and Gas UK. The ideas couldthen be deployed to other maturing fields such as in the Gulf ofMexico and southeast Asia.
Ardent says it needs at least two companies to sign up for aproject to get off the ground. Well-Safe, another companyoffering a new approach, also needs several operators to commit.
So far, Ardent has found it challenging to persuadecompanies to be the first to sign up.
"Everyone is queuing to be second," said Ardent'sDecommissioning Director Stuart Martin.
Oil companies are keen to reduce costs in a part of themarket dominated by major global players such as TechnipFMC, Schlumberger, Saipem and AllSeas.
Beyond the floating tanks, Ardent has also joined forceswith oil services firm WorleyParsons and technology andshipping group Lloyd's Register, to bring a one-stop-shopservice.
This could save money by cutting out the need for lots ofdifferent contractors. Well-Safe proposes coordinatingdecommissioning work across companies to share equipment andstaff.
"You got to give Well-Safe and the others a real tip of thehat. We all want them to win. It's in the best interest of theindustry," said Jim House, CEO of Neptune Energy, which isplanning decommissioning for its Juliet and Minke fields in theNorth Sea.
Oil platforms are usually removed piece by piece and takento the shore using complex vessels. The floating tanks thatArdent used to lift the Costa Concordia, are much cheaper touse, industry experts say.
"This technology could have significant potential costefficiencies," the Oil and Gas Technology Centre, which isfunded by the British government, said in a report.
But Ardent says it would need contracts for at least twobuoyant tanks to go below current costs per tonne of steelremoved and three to get below its target cost reduction ofaround a third. Britain's industry regulator, the Oil and GasAuthority, has set a target of 35 percent cost cuts comparedwith 2015 levels.
Well-Safe's main lever for cost reduction also depends onseveral operators committing to contracts.
Ardent is also proposing to oversee a project fromproduction to scrapping the metal onshore. Worley Parsons wouldoperate the platform and maintain the equipment and Lloyd’sRegister would plug the wells.
"It's a lot about an emerging set of companies and we don'tyet know which is going to be the winning model," said BostonConsulting Group’s Philip Whittaker.
"One of the biggest sources of value is how to integrate thedecom work with the final stages of the production work."
MATURE BASIN
With other fields maturing and drying up across the worldand some experts expecting demand for oil to peak in the 2030s,the North Sea is a test bed for new decommissioning projects.
If a company can plug oil wells without leaks and removethousands of tonnes of steel platforms and pipelines, some 50years old, in the rough, deep seas between Scotland, England andNorway, they should be able to do it anywhere.
Industry body Oil and Gas UK, expects oil companies to spend17 billion pounds ($22.05 billion) on removing around 1,600wells, 100 platforms, and 5,500 km of pipelines in the nextseven years. Some 840,000 tonnes of material will be returned toshore to meet environmental regulations.
"We've got a mature basin with a steady flow of work," saidJoe Leask, decommissioning manager at Oil and Gas UK.
"Those resources and expertise can be exportable globally."
The Gulf of Mexico has had decommissioning projects in itswarm, calm waters for years but Southeast Asia is a new hotspot, with more than 1,500 platforms and 7,000 subsea wellsexpected to be uneconomical by 2038, according to the BCG.
That is followed by Latin America, West Africa and theMiddle East Gulf.
With so much potential, more established players are alsotrying different approaches to make decommissioning cheaper.
Service vessel group Allseas is experimenting with newideas. It specialises in subsea construction but is convertinghuge ships to lift structures as heavy as 48,000 tonnes in onehaul.
"We lift in a matter of hours and we're gone," said AllseasPresident Edward Heerema.
The first job for Allseas' Pioneering Spirit, the biggestconstruction vessel in the world, was in the Norwegian North Searemoving Repsol's 13,500 tonne Yme production unit.
Shell also used it to remove its 24,000 tonneBrent Delta platform in 2017.
"We have taken substantial costs out of our majordecommissioning project, the Brent, and we will continue to doso," said Steve Phimister, head of Shell's North Sea upstream.
"The whole industry needs to do that by innovating."
($1 = 0.7782 pounds)
(Editing by Anna Willard)
