Abandoning subsea oil and gas platforms save oil companies big on clean-up cost

Jun 05, 2022 News

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– oil nations use clean up money to manage artificial reefing progs.

Kaieteur News – The idea recently touted by ExxonMobil’s Guyana subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), to abandon a significant portion of subsea oil and gas apparatus on Guyana’s seafloor to protect marine life that might have assimilated the equipment into their environment is not new and is known to significantly reduce clean-up cost for oil companies.

At consultations for the company’s fifth oil project, Urau, at the Umana Yana two weeks ago, Country Projects Manager, Anthony Jackson highlighted the possibility of subsea material used in the production of oil and gas being abandoned at the offshore Stabroek Block. He was at the time answering questions on decommissioning when he explained that given the lengthy life span of an oil project, it is found that marine life incorporate subsea equipment into their environment, thus causing the removal of production equipment to do more harm than good.
However, while Guyana has allowed the oil operator to commence incremental removal of clean-up funds 20 years ahead of the clean-up period, research has shown that oil companies obviously benefit from not having to expend large funds for the removal of subsea equipment. Additionally, customary practice shows that countries usually demand a significant portion of that decommissioning money to manage the artificial reef and to relocate it rather than its total removal. This practice to abandon subsea junk in favour of marine life is described as “rig-to-reef”.
The American Petroleum Institute (API), the largest United States trade association for the oil and natural gas industry explained that the first planned rigs-to-reefs conversion took place in the mid 1900s. By 1983, the US Minerals Management Service – the agency that manages leasing, exploration, and development of Federal offshore lands – announced its support for the rigs-to-reefs programmes.
It explained that the programmes are beneficial from many perspectives. Within six months to a year after the rig is initially placed on the sea floor, it will be a thriving reef ecosystem completely covered with marine life. Marine life already established on the rig is preserved, as the rig is carefully cut and towed to the new location. “Decommissioned platforms make ideal artificial reefs. Constructed of corrosion-resistant steel that withstands breakup, rigs have a large, open structure that allows easy circulation for fish and provides havens for barnacles, corals, sponges, clams, bryozoans, and hydroids,” it was noted.
The “rigs-to-reefs” approach allows for massive offshore platforms to be decommissioned by removing all useful equipment and materials, and then sinking them in a designated location. Once the structure settles to the bottom of the ocean, it provides several acres of living and feeding habitat for thousands of underwater species, the API reported.
“The rigs-to-reefs approach saves the industry millions of dollars a year. Part of this saving is shared with local communities that benefit from these reefs. Generally 50 percent of the industry savings is donated to a host State’s artificial reef programme.”
It was noted that in the past an obsolete platform in the Gulf of Mexico, for example, would have been “decommissioned” by dismantling, being towed to shore, cut up and sold for scrap. “But when the platforms are used to create artificial reefs needed, marine habitat is created while saving the industry millions of dollars, even after 50 percent of the cost savings are donated to the host State’s artificial reef programme,” API added.
The artificial reef then improves commercial and recreational fishing from the enriched marine habitat resulting from the conversion. Because of the positive impact the proper abandonment of subsea junk has on not only the environment, but economy, some oil producing countries have managed to establish vibrant subsea life environment through oil companies.
However, here in Guyana, the abandonment idea has more recently been made public, and this is after the country learnt that decommissioning money is already being removed from profit oil for clean-up. The government has told the nation that the clean-up funds recovered so far is being re-injected as finance to Exxon’s offshore project; finance that the country will eventually have to repay as cost oil. The problem with that also, is that there is no guarantee that this money will be available years after the project would have completed. International experts have also questioned the possibility of Exxon selling the offshore project down the line after accessing a huge portion of clean-up fees.
Abandoned wells, it was noted, number in the tens of thousands worldwide. They are supposed to be plugged before they are abandoned and decommissioned. However, an abandoned well that has not been properly plugged could leak methane and other harmful gases. The effects of poor abandonment practices can weigh heavy on the local environment. As such, many oil-producing nations that opt to abandon the oil and gas equipment have adjusted their laws for the proper monitoring and management of their artificial reefs.

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