Risk in Well Plugging & AbandonmentRisk in Well Plugging & Abandonment

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Twachtman Snyder & Byrd, Inc. Twachtman Snyder & Byrd, Inc.September 2006September 2006

Twachtman Snyder & Byrd, Inc.Twachtman Snyder & Byrd, Inc.

• Houston, Texas, based company founded in 1987.

• Provides project management, well P&A and contracting services to the oil and gas industry.

• Specialized in decommissioning of offshore facilities.

• Consulting services for decommissioning planning and liability assessment.

Robert C. ByrdRobert C. Byrd

Over 30 Years in the Offshore Industry• Joined TSB in 1993• Responsible for Risk and Liability Consulting

Services• Educational Background:

– B.Sc. Marine Engineering, US Coast Guard Academy– M.Sc. Ocean Engineering, Unv. of Alaska, Fairbanks– M.Sc. Structural Engineering, Unv. of California, Berkeley– Ph.D. Engineering, Unv. of California, Berkeley

Well Plugging & AbandonmentWell Plugging & AbandonmentSummarySummary

WELL PLUGGING & ABANDONMENTWELL PLUGGING & ABANDONMENT

• Rigless Method used predominantly in Gulf of Mexico & North Sea

• Rig-based method used primarily on subsea wells

Well P&A ObjectivesWell P&A Objectives

• Assure isolation of hydrocarbon zones

• Protection of fresh water aquifers

• Prevention of migration of fluids & gases

General Well P&A ProcedureGeneral Well P&A Procedure

• Cement plug is placed below and across the lowest production zone, tagged and tested.

• Cement plugs across all production zones

• All open annuli are plugged.

• Tubing cut approximately -100 m below the mud line (BML) and the tree is removed.

• Production casing removed to -100 m BML.

• Surface cement plug is pumped into the casing with top at -32 m BML.

Well P&A - Well P&A - Rig vs. Rig vs. RiglessRigless Step 1Step 1

Typical Wellbore Schematic

26" @ 804'

18-5/8" @ 1607'

13-3/8" @4344'

9-5/8" @ 9945'

4-1/2" Liner top@ 9549'

4-1/2" @10,545'

Perforations

Well P&A - Well P&A - Rig vs. Rig vs. RiglessRigless

Step 2Step 2

Bottom Plugs Set With Tubing Pulled Out of Hole

26" @ 804'

18-5/8" @ 1607'

13-3/8" @4344'

9-5/8" @ 9945'

4-1/2" Liner top@ 9549'

4-1/2" @10,545'

26" @ 804'

18-5/8" @ 1607'

13-3/8" @4344'

9-5/8" @ 9945'

4-1/2" Liner top@ 9549'

4-1/2" @10,545'

RIGLESS RIG

BOTTOM SQUEEZE

PERFORATIONS

Well P&A - Well P&A - Rig vs. Rig vs. RiglessRigless Step 3Step 3

Balanced Plug on Rigless and Stopped Plug With the Rig

18-5/8" @ 1607'

13-3/8" @4344'

9-5/8" @ 9945'

4-1/2" Liner top@ 9549'

4-1/2" @10,545'

26" @ 804'

18-5/8" @ 1607'

13-3/8" @4344'

9-5/8" @ 9945'

4-1/2" Liner top@ 9549'

4-1/2" @10,545'

RIGLESS RIG

300' INTERMEDIATECEMENT PLUG

BOTTOM SQUEEZE

PERFORATIONS

Well P&A - Well P&A - Rig vs. Rig vs. RiglessRigless Step 4Step 4

Rigless with Cut Casing and CIBP; Rig with Same but with a little more Casing Out of the Hole

18-5/8" @ 1607'

13-3/8" @4344'

9-5/8" @ 9945'

4-1/2" Liner top@ 9549'

4-1/2" @10,545'

26" @ 804'

18-5/8" @ 1607'

13-3/8" @4344'

9-5/8" @ 9945'

4-1/2" Liner top@ 9549'

4-1/2" @10,545'

RIGLESS RIG

300' INTERMEDIATECEMENT PLUG

200' SURFACECEMENT PLUG

W/ CIBP

BOTTOM SQUEEZE

PERFORATIONS

•Time lapse between well completion and P&A

Deterioration of hardwareLoss of, incomplete or inaccurate records

•Often performed long after platforms shut-in

•P&A personnel often know little about the wells

•Cost pressure: Not income generating

Performance Risk Issues in Well P&APerformance Risk Issues in Well P&A

Risk Mitigation Factors in Well P&ARisk Mitigation Factors in Well P&A

•Formations generally produced out, therefore pressures not high.

•Systems and tools are available to deal with any eventuality.

InvGauss(0.89492, 1.86797) Shift=+0.49924X <= 0.765

5.0%X <= 2.600

95.0%

0

0.2

0.4

0.6

0.8

1

1.2

1.4

0.5 1 1.5 2 2.5 3 3.5

Data CharacteristicsMean: 1.394Mode: 0.998Median: 1.234

Actual Cost/Estimated Cost

PDF of Well P&A Experience

Well P&A Cost Risk ExampleWell P&A Cost Risk Example

Production Equipment

Deck

Drilling Rig

Quarters

PowerGeneration

Pipeline

Conductors/Wells

Jacket

Piles

OffshoreOffshorePlatform Platform ComponentsComponents

Other Risk Issues in Well P&AOther Risk Issues in Well P&A

Risk in Well P&ARisk in Well P&A

Conclusions

•The performance risk in well P&A is primarily economic: It is very difficult to estimate the cost accurately for a single well.

•We can estimate the cost of multiple wells probabilistically.

•These Risks PaleRisks Pale in comparison with the uncertainty following a Catastrophic EventCatastrophic Event (Hurricane).