The Australian offshore oil and gas industry is facing a significant decommissioning portfolio over the next few decades, with the potential for earlier abandonment activities given changing market conditions.
Advisian has been commissioned to determine the total estimated liability for equipment in Australia’s offshore areas and to identify the quantum of potential cost savings across the supply chain.
The assessment is funded by NERA and seven operators (BHP, Chevron, Cooper Energy, ExxonMobil, Santos, Vermilion and Woodside). The assessment extends to all oil and gas assets offshore Australia, including those under non-funding operator responsibility.
The outcome is the first operator supported assessment of Australia’s offshore decommissioning liability outlook and represents a critical first step towards transformation of the approach to decommissioning.
At a high level, the study has identified:
- A combined estimated liability of USD $40.5 billion (including wells and facilities). Well plugging and abandonment (P&A) and pipeline removal comprise the majority of estimated spend.
- A potential for a significant decommissioning workload between 2020 and 2030, based on independent estimates of decommissioning commencement dates.
- Substantial opportunities for cost reduction through well-established initiatives, such as knowledge sharing and multi-asset campaign approaches.
- A need to continuously improve the underlying dataset and to maximise efficiency through a centralised planning system. Further detail on these findings is included in the body of the relevant reports.
