Offshore Europe Preview: Ardent’s Martin sees opportunities in decommissioning
ABERDEEN - Stuart Martin is a 35-year veteran of the upstream sector. With Ardent, his career has now come full circle from commissioning assets in the early 1980s to decommissioning the same assets now. A graduate of Napier University in Business Studies and holder of a post-graduate diploma in Project Management from The University of Manchester Institute of Science and Technology (UMIST), Martin is the Sales and Marketing Director for Ardent.
Recently, in a Q-and-A session, he offered his views on a wide range of decommissioning issues.
OE: Global analysts predict a US$32-billion decommissioning bill over the next four years. How is this as an opportunity for the industry and its workforce?
Martin: This is a dual opportunity on a macro and micro level. Firstly, to replace the opportunities that are missing, in terms of greenfield developments in the UK. And secondly, to extend the maximum economic recovery (MER) and provide work for existing stakeholders in an aging basin.
At a macro-level, the new technologies coming out from Scottish companies are making a real difference and will create new markets globally for exportable technologies and skills. Some emerging decommissioning markets are struggling to find the right balance between goal-setting and prescriptive formats for their regulations. Whilst the Gulf of Mexico is well ahead of us in track record, the UK is going to be in a great position to take advantage.
OE: As we move from late-life operations into decommissioning, is it wrong to see this as the “sunset” era for oil and gas and its career prospects?
Martin: I’m at the other end of the scale. I joined the industry in ’83 and commissioned a lot of the assets that we are now decommissioning. Even then, people were talking about the end of “Big Oil.”If you look at global project databases, there are plenty of big elephant fields being found and discovered. We are a long way from the industry’s “Golden Years.” In the long term, various decommissioning plans will provide revenue for decades. I am not nearly as pessimistic as others.
OE: Decommissioning came out as the top interest in a recent industry survey. Why would that be?
Martin: That surprised me a little bit. That insight is interesting, because for many people, decom is probably the least stimulating part of the industry. After all, it’s a zero-sum game. My hunch is that this finding covers several contributing factors, such as long-term employment opportunities.
Rather than take a sceptical, downbeat view, I believe we will see a step change. This should be measured with alignment globally on regulation and cross-border action on decommissioning.
OE: How will decommissioning change in the next five years, and what are Ardent’s ambitions?
Martin: If we don’t change the existing mindset, and the way that we have executed projects in the UK and Europe, we are going to get similar outcomes and that typically is over cost and schedule, with some safety incidents thrown in for good measure.
For Ardent and our decom consortium partners, Worley Parsons and Lloyd’s Register, we have the single aspiration of being the go-to or prime engineering, procurement, removal, dismantling (EPRD) contracting entity for all operators; a one-stop-shop for decommissioning.
I hope that within five years, operators will realise that they may not be best-placed to handle the execution and consider giving responsibility to specialists. I also hope we will have some best practices established for different assets,regional conditions, etc, and that we will share norms and benchmarking on tools.
OE: Within decommissioning, how can 35% cost reductions be achieved?
Martin: We all recognise why it is there, but the problem is 35% of what? We don’t know the starting point. This is because the custodians of decommissioning costs are the regulators and the operators, and this is not shared with the supply chain or other stakeholders—it is a capricious beast or concept. As long as they hold on to the data and don’t share it, we don’t really know if we are achieving 35% reduction.
If the regulators were to insist on a standardised close-out report for each project that included meaningful metrics and costs, it could be anonymised and sent around to the industry, saying, “Here is what best practice looks like. These are the savings that we made.” This would provide a real stimulus to the supply chain.