A new entrant to the North Sea decommissioning market has been launched, with backing from a group of well known industry leaders and goals to attract US$263 million (£200 million) in investment and create 400 new jobs.
Well-Safe Solutions wants to offer a cost-effective, "one-stop shop" well abandonment service - from front-end engineering to project execution - through a campaign approach, supported by a fleet of its own dedicated plugging and abandonment (P&A) vessels.
Industry executives Alasdair Locke and Mark Patterson are major investors in the firm, which also has Paul Warwick on board. Warwick was formerly executive director for Repsol, executive vice president for Talisman Energy and regional president of ConocoPhillips.
Well-Safe has already secured funding from Scottish Enterprise, including investment from the Scottish Investment Bank and a regional selective assistance grant, in addition to the initial private funding provided by the major shareholders.
Patterson, formerly CEO of Nautronix, which was bought by Proserv in 2015, says: “The market dynamics in oil and gas have changed significantly. Before the collapse in oil price, operators were focused on maximizing production, costs were very high and assets scarce and, with no real regulatory imperative, decommissioning was pushed back. Cost and safety are still paramount, but operators are now having to face up to the well abandonment challenge. They need to prioritise decommissioning activity and, with an increasing stock of 'shut-in' wells, more incentives, low asset utilization and therefore lower rates, the economics for P&A have become more compelling.”
Expenditure on well abandonment in the UK Continental Shelf is forecast to double to £1.1 billion in 2017. Around 5000 wells, of which 1000 are subsea, require to be decommissioned in the North Sea.
Well-Safe is looking to acquire assets to carry out well abandonment work, including a semisubmersible rig, a jackup and a light-weight intervention vessel.
“As owners of these assets, we can guarantee they will not be diverted to other drilling operations, but used and mobilized exclusively for P&A activity. With this certainty over availability, we can secure long-term commitments from operators and have full control over scheduling of long-term well P&A campaigns,” said Patterson.
Locke co-founded Abbot Group in 1992 and served as its CEO. He is a major investor and will take up the role of non-executive chairman of Well-Safe. He said the model would require collaboration from operators and government. "But if we think smarter and work hand-in-hand with stakeholders we can revolutionize how we deliver subsea well decommissioning."
Patterson added: “We’ve already attracted some of the most experienced people in the industry with the relevant knowledge of subsea wells to create a centre of excellence in P&A. The next step will be to acquire some of the best-in-class drilling rigs, vessels and equipment that will be able to take on any P&A operation.
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