UK-based EPIC International has won a contract to use its new Late in Life Operation (LILO) model for “mothballing” near end-of-life North Sea platforms.
The ca. £500,000 contract, with an UK independent operator on a southern North Sea platform, will see EPIC Inernational named as a North Sea operator and be granted Duty Holder status for the first time in the company's history.
The firm says LILO will save the asset owner up to £12 million in annual costs and liabilities, while keeping its options open either to continue production at the five-well platform or fully decommission it.
EPIC International’s expertise working on normally unattended installations (NUIs) and its experience during commissioning of the gas platform made it the owner’s choice when looking for a new way to manage the 24-year-old asset in the southern North Sea.
All work for the LILO will be undertaken out of Great Yarmouth, where EPIC is based. An eight-strong crew from EPIC International will complete all work on the platform to enable cessation of production by the end of November.
EPIC managing director Dave Rowan said: “This is a big opportunity for us to do something new and develop a model that we can offer to other operators.
“It is about shutting the platform down, making it safe and looking after it. This is a marketable model for other operators, which removes the enormous overheads for platforms that have diminished production and will either be revived or decommissioned in the future.”
The LILO model offered “a significant reduction in liability for the unnamed owners as well as massive savings – up to £12 million a year for this platform,” he said.
EPIC’s duty holder rule will begin in the New Year when it will maintain and manage the light-housed platform, monitoring it by satellite from its Great Yarmouth offices, where a representative of the owner has been based for the last few months, with regular maintenance visits.
If the market turns around, the owner can decide whether to continue production of its final reserves or fully decommission it, says EPIC.
“We have developed a model which is a way to defer the costs of decommissioning while oil prices are low and operators don’t want to spend that money, they also don’t want to produce," says Rowan.
EPIC says its model would cost the owner £500,000 a year in management fees and maintenance works and visits compared to the £12.5 million a year it would pay a big operator to look after the platform.
EPIC’s systems have been accepted by the Department of Energy and Climate Change and the Health and Safety Executive and work has started. A member of the owner’s staff has been based in EPIC’s Vanguard road offices since May, said Rowan.
The platform is due to be fully shut down by November 27.
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