Keppel FELS Limited (Keppel FELS), a wholly owned subsidiary of Keppel Offshore & Marine (Keppel O&M) has signed an engineering services agreement with Workfox, a subsidiary of Seafox Group, to do an engineering study for a purpose-built accommodation jackup rig with well intervention and plugging and abandonment (P&A) features.
The project, named Seafox 8, is being developed to address a gap in the current P&A market. Subsea fields are reaching the end of their productive lives in areas such as the North Sea and the Gulf of Mexico. With increasing environmental concerns and regulations, there are a substantial number of wells in both these regions that will need to be properly sealed up in the next few years.
Seafox 8 will be able to offer P&A services, well intervention services, as well as accommodation and crane support services. It has a spacious deck and comprehensive amenities for the comfort of 282 persons on board. The jackup can also be configured for other offshore support services. Compared to existing jackups chartered for P&A work, Seafox 8 is expected to be 25-30% more economical in terms of dayrates. It will be the first accommodation and service jackup unit that is specifically suited to support rigless activities for P&A and well services at a competitive cost.
Keppel O&M is also in discussion with Seafox to enter into a joint venture to place an order for Seafox 8 upon completion of the study, which is expected in 2H 2014.
Keesjan Cordia, CEO of Seafox, said, "With our background in providing accommodation support, workover, construction, and decommissioning services to the offshore oil & gas industry, we noticed the strong demand for P&A services and identified a need for a specialised rig in this market. We believe the jackup we are conceiving, Seafox 8, offers the ideal solution as it can work all year round including during the North Sea's winter period and undertake multiple services at a time. It is a real workhorse and unlike drilling rigs which are often used to do P&A currently, Seafox 8 has the crane capacity to assist with maintenance and well services activities. It has NORSOK-specified accommodation for crew and client personnel, and a lower operating cost than existing equipment with a single role purpose."
"We are glad to continue this winning partnership we have with Keppel in coming up with innovative products. Seafox 5, a multi-purpose self-elevating platform (MPSEP), which they built for us previously, has been performing extremely well and I am confident that Seafox 8 will be just as successful."
The hull and legs of the new generation jackup rig will be based on Keppel's new KFELS J Class design which is customized to operate in up to 112m water depth in the harsh offshore environmental conditions of the Norwegian North Sea.
Developed by Offshore Technology Development (OTD), Keppel's R&D arm, the KFELS J Class is designed as a drilling jackup rig for the Norwegian North Sea and is an enhancement of Keppel's proven harsh environment drilling rigs - the KFELS N Class and KFELS G Class designs. Keppel O&M has previously delivered three rigs of each design, which have been successfully operating in the North Sea including Norwegian waters.
Wong Kok Seng, Keppel O&M (Offshore) and Keppel FELS managing director said: "For Seafox 8, we are taking the hull of an ultra-harsh environment rig in our KFELS J Class for use as an accommodation rig with equipment for P&A services. The KFELS J Class extends the capabilities of our proven KFELS G Class and KFELS N Class designs for work in the North Sea.
Keppel O&M and Seafox have a 49/51 joint venture in Seafox 5, an offshore wind turbine installation vessel which was built to Keppel's proprietary MPSEP design. Delivered in 2012, Seafox 5 has successfully installed 80 monopiles for offshore wind turbines in the German Sector of the North Sea and is currently deployed for Maersk Oil and Gas for accommodation and maintenance work. After its contract with Maersk, Seafox 5 will be chartered to DONG Energy E&P to service their operation at the Hejre field, in the Central North Sea, off the coast of Denmark.
About the plug and abandonment market
Countries and industry regulatory officials are mandating the offshore oil and gas operators to immediately seal unproductive wells to permanently remove these potential environmental threats. Service companies are developing tools and methods to limit the economic impact of fulfilling these obligations.
Industry estimates put as many as 12,000 wells in the Gulf of Mexico which qualify as P&A candidates. In the UK sector of the North Sea alone, it is estimated that more than 500 structures with about 3000 wells are slated for permanent abandonment in the near future. In the Norwegian sector of the North Sea, more than 350 platforms and more than 3700 wells eventually must be permanently abandoned. Nearly 70% of the forecast wells P&A expenditure is in the Central and Northern North Sea, equating to £3.1 billion. Almost 480 wells are scheduled for decommissioning in these regions, of which nearly 60% are platform wells.
There are currently two methods of P&A. The first is using the available equipment on a fixed platform to execute the P&A without the support of a rig. This method is almost always faced with constrains on deck and bed space limitations, multiple logistics challenges and the downside of high man-hours. Another method is using drilling rigs with the use of third party equipment. However, drilling rigs' dayrates are rather expensive for such applications.