Decommissioning the brent field

“Sorry - if you want to follow up, can you use the microphone, because we are filming this. Thank you.”

Stuart Russell off camera

“I'm just [inaudible] physical timescale between [inaudible] that is, when you start and whether that means, for a novice like me just carrying off the platform, moving it, and then deconstruction or do you classify it starting from 2006, but at what point do you say, 'that's it, let's walk away from this'.”

Stephen Tetlow in vision

“Thank you.”

Alistair Hope in vision

“So if you took, say, a typical FPSO floating production storage unit type field with wells and subsea architecture, that might take seven years, something like that, to do the wells, remove the infrastructure. Brent, obviously, added levels of sophistication and complication, because we're still in production on Brent Charlie and that means that from start to finish, we'll be about 20 years. I think six, seven years is perhaps a typical field.”

Stephen Tetlow in vision

“Thank you. I'll just take the next couple of questions. The gentleman here. Second row. And the gentleman over there. Thank you.”

Neil Glover off camera

“Thank you. Neil Glover, GMOC Ltd. - If we're looking at the platforms once you've removed all of the pipelines, or taken them out of commission, I presume from what I read, was you're taking the complete jacket out, the Alpha Jacket out above the pile clusters, but you're going to be left with the concrete legs without the topsides on. Will you have to continue to do any maintenance because there might be build-up of something like H2S in the shafts, which of course has been a problem in the past. And I see that the minimum life you say they will last is another 150 years. The opportunities for reuse, will they be kept open if possible. They may not seem economical today, there may be something in the future. So what are Shell's plans for ongoing maintenance, with any long-term issues and opportunities for potentially in the future?”

Stephen Tetlow in vision

“Thank you. We'll just park that question for a minute. And the gentleman over there. Thanks.”

Unidentified audience member off camera

“You showed the Frigg Field, there, what's gone before. I guess you've got others coming the line, like Cormorant Alpha. Just wondering whether there's been much potential for collaboration with other operators in technology development or studies you've carried out, that kind of thing?”

Stephen Tetlow in vision

“Thank you. Right. Post-maintenance and safety issues.”

Alistair Hope in vision

“So what we'll do is we'll put a cap on top of the legs with navaids. The navaids will be changed out by helicopter, or by a vessel with a long crane, if you like. We don't anticipate putting people back on top of the legs - ever. We have cleaned the insides of the legs in as far as we can, removing any hazardous materials. And the legs are flooded now to LAT, so we don't expect build-up of H2S, or anything else for that matter. When we'd plugged the wells, we did a monitoring phase and so that gives us some confidence that we've got good isolations from the reservoir. As for reuse, we do remain liable forever, so I guess we would always be open to that. We will have periodic monitoring of the environment and the structures. That'll be done on a risk-based basis of course. So I guess if there was a good reuse suggestion that came forward, I think we would be always open to discussing that and looking at it. So far what's precluded anything like that is really the fact that the facilities are so remote, that it's difficult to imagine what they could be used for.”

Stephen Tetlow in vision

“Thank you.”

Duncan Manning in vision

“And with regard to operator collaboration, there is currently an active decommissioning circuit where lessons are passed, both with other operators, but also the supply chain. And there's also workshops and events with the sector bodies such as Oil & Gas UK or IOGP, where nitty-gritty lessons are passed on. So in that respect, everyone sharing lessons that they've learnt and trying to learn from others is actively going on already. With regard to pooling activity, so you've got a wider pool of activity to do, it really all depends on the end of field life stage that your platform is at, and whether it makes sense to actually focus on it now in the current market conditions, or whether it is worth engaging with other operators to see where there is an opportunity to pool scope together. After the merger with BG, we have a reasonably wide portfolio of assets so our focus is, unfortunate from a Brent perspective that it is four platforms, we have the ability to learn lessons between those. But it's making sure that we pass those across the wider portfolio in both Shell, and now, an integrated Shell and BG.”

Stephen Tetlow in vision

“And Duncan, if there are companies or representatives or engineers here who might wish to collaborate with in some way, how would they go about that?”

Duncan Manning in vision

“Well, Decom North Sea is probably the first point of call. It's a sector body which is focused on decommissioning in the North Sea. It's very active in ensuring that everyone understands what the opportunities are and how to engage with the supply chain and operators to take advantage of those opportunities. That, I think, is probably the first obvious point of call I would suggest.”

Stephen Tetlow in vision

“OK. Thank you. Gentleman in the middle there. We'll take another two more then for now. And gentleman there, thank you.”

Martin Wayland off camera

“Thank you. Martin Weyland from the Health and Safety Executive. Obviously these platforms have been out there quite some time and have gone past their original design life. Are there any plans to recover any material and subject them to testing to see what long-term lessons you can take forward on to your other installations worldwide, that are probably not anywhere near the decommissioning dates yet?”

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Stephen Tetlow in vision

“Thank you for that. And a question here,”

Steve Jenkins off camera (in audience, but unseen)

“Just following on from that question. I'm Steve Jenkins from BP. Is it feasible to salvage and reuse any high value equipment, or is economically unviable to do so? If so, what type of equipment could be reused for example, valves, actuation?”

Stephen Tetlow in vision

“OK. Two really good, quite related, questions there. Let's take one...is there another question? The gentleman here, thank you.”

John Dyson in vision (from rear)

“My name's John Dyson from London Business School. Thanks very much for the presentation. It's certainly a mega engineering challenge, also, clearly a mega cost. “And I'm just wondering right now whether it's a cost that Shell really wants to bear given the depressing oil price scenario, and whether that means the project can be shelved and whether that's a challenge from an engineering sense?”

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Stephen Tetlow in vision

“Thank you very much.”

Alistair Hope in vision

“I'll take the first two and I'll leave the other one to Duncan. So the sample question is a great question. In fact, about two years ago, we sat in a similar forum with the Institute of Structural Engineers, who asked us that. So when we were drilling in through the concrete into the cells, we got some cores, and we've tested those. And that's provided real, concrete data, if you like, but it shows how the concrete has aged, and that gives us real data that we can put into the models and give us a better understanding. And in general, when we've talked to our stakeholders, we've tried to do that sort of thing where we can, to try and increase the knowledge base, because that's important to some of our stakeholders. On the question of reuse, reuse is desirable, higher in the waste hierarchy than recycling. And our contractor, Able UK, will, in that soft strip phase, go and see what they can salvage. So they will look at things like valves, actuators. There's some plate heat exchangers made of titanium. Those sort of high value items that are worth removing. They're also very good at identifying structural steel sections that can be used, or reused, so they've done that in the past. BP's North West Hutton platform, the module support frame from that, the whole jacket was decommissioned at Able's facility. They kept the module support frame, an enormous piece of steel, about 50m high, in fact, and they kept that for years. And it's actually now been bought by Allseas and made into the test lift platform. So they are very good at identifying things that have high value and they'll certainly be looking to do that. So it's reuse before recycling.”

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Stephen Tetlow off camera

“And is that spawning new business, that part of decommissioning?”

Alistair Hope in vision

“I think there's an appetite to do more in the reuse phase. Obviously, reuse of valves is something that could be done. Valves can be relatively easily moved and refurbished and their integrity verified. It gets a bit more difficult with other things, but I could see, as the market picks up - don't forget we're in the infancy of decommissioning at the moment - so there's been really probably only about 20, 30 projects in the UK spread out over a long period so the volume of material's been relatively low. But in the Gulf of Mexico whole topsides have been reused.”

Stephen Tetlow off camera

“Thank you.”

Duncan Manning off camera

“So on the question of cost, it's relatively straightforward. There's a regulatory requirement…”

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Duncan Manning in vision

“…to decommission, and we are liable to regulation to conduct that activity. There's an increased focus from an oil and gas authority perspective, on delivering efficient decommissioning and ensure that is being conducted as efficiently as possible. And that's one of the reasons why, from a project perspective, developing new techniques, technology, and sharing lessons is really important to us. But also one of our project lessons is actually that kicking this into the long grass and trying to delay work is actually causing more problems, because you end up sitting on a platform which is older and older. And the integrity of the platform is more in question, the capability of the platform to conduct the high cost plug and make safe activity is only going one way - and that's up. And one of our lessons is, whilst a platform is still running, that's actually the time that you should be getting on and conducting the activity which is the highest cost. That for us, means once you start the plug and make safe system, trying to reduce the duration of that, and, as Alistair said, reduce the operating cost by doing it. That's really the key focus.”

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Stephen Tetlow off camera

“What do you assess as the level…”

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Stephen Tetlow in vision

“…of risk of cost? You must have done forward projections, and the inference in the question - it's a really important question - is you have to make a balance between future cost, technical risk and, in the end, shareholder dividend. And you have to balance all of that. We talked earlier about the level of public confidence in this, and the balance between your cost and risk and shareholder dividend. So how is that being managed within the company?”

Duncan Manning in vision

“You may not be surprised to hear there is a focus, both internally and externally, on cost and driving the most efficient decommissioning programme you can do. But you also saw from that there's elements where the regulations are pretty clear about what you need to do, and we're also liable in perpetuity. So it's incumbent upon us to get that right and do it in a manner which means we're not having to come back to the platform and revisit the wells once they have been plugged. So we understand that now, and the focus is not about trying to delay it, but about actually trying to get on and conduct the activity.”

Stephen Tetlow in vision

00:50:00

Alistair Hope off camera

“It’s worth saying that the regulator…”

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Alistair Hope in vision

“…the new Oil & Gas Authority, they've been set up with a remit to do three things: maximise hydrocarbon recovery, protect the infrastructure, and reduce the cost of decommissioning. So there is enormous interest from them to drive down the cost whilst not compromising safety and the environment. So they very much look to us to do decommissioning efficiently. And so, as Duncan says, for us that is actually keeping up a reasonable tempo. There may be other projects where it's possible to come to a certain point, perhaps, plug and make safe the wells and then leave, say, subsea manifolds and things like that later and come back and do them in a campaign with other operators or with your own stuff. So being efficient is the expectation from the regulator.”

Stephen Tetlow in vision

““OK. Thank you for that. Next question, please. There's a gentleman at the back there, and...Thank you.”

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Mathias off camera

“Good evening. My name is Matthias. My question is centred on waste management. Considering the fact that the huge structures will be left under the subsea, has the stakeholder, in particular, Shell, considered factoring the implication of such a cost to other marine users. What we're discussing presently has to do with the knowns, but we need to look at the unknowns. What impact on the subsea will be left after the decommissioning process will have on other sea users, or marine users, in future?”

Stephen Tetlow in vision

“Thank you. Interesting question, thank you very much. And the gentleman here, please.”

Paul David off camera

“My name is Paul David. I'm a safety engineering and risk management consultant. You were talking about the regulations. As you know, safety case regulation July 2015 brought in extra requirements for the safety case. Now, as you know, we are to incorporate a lot of environmental issues into the safety case. So don't you think that this process will delay the Brent Decommissioning project and will bring in more challenges? Because the way I looked at the safety case regulations DECC wanted more and more environmental data, more and more environmental regulations to be complied with. So do you foresee any further delays in getting approvals?”

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Stephen Tetlow off camera

“Well, again, two fairly related questions.”

Alistair Hope off camera

“Let me have a go. So I think the question…”

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Alistair Hope in vision

“…from the back was so have we thought about the environmental impact of the things we're leaving behind. So very much a part of our work is to look at, look at the whole environmental impact of what we leave behind, as well as the operations that we carry out. And so leaving clean steel and clean concrete isn't really an environmental hazard. And, in fact, there's a lot of work in academia now. For example, Professor [inaudible] at Wageningen University in the Netherlands actually saying that clean steel and clean concrete could help recolonise the North Sea, by allowing species to progress back to where they've been removed by overfishing for over a hundred years. So the environmental impact assessment that we've done for the whole project was done by DNV. A very comprehensive piece of work; we have Fred Ducellier and James Blackburn. Fred's our cell remediation specialist, and James is our overall HSE manager. We can take you through that afterwards, if you're interested. I think on the question of the safety case, we have an approved safety case for the removal of Brent Delta. It covers the whole period from when we de-man the platform through the lift, the transport to shore, the load in and the dismantling. And, again, we'd be more than happy to talk you through that. The change in the HSE safety case regulations. hasn't unduly caused us any issues. I'm happy to talk about it later.”

Stephen Tetlow in vision

“Thank you for those two questions. Next question...the gentleman in the middle here. The two gentlemen in the middle here, one behind and then the gentleman in the white shirt just here.”

(name inaudible) off camera

“Hi, I'm [inaudible]. I'm just wondering what the impact…”

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Zinna Koli in vision (from rear, obscured by another audience member)

“…on jobs would be from the project, because obviously from a positive standpoint there will be new jobs created in the decommissioning industry. I'm just wondering what Shell's approach is to existing employees on these platforms and other fields that will be decommissioned in the next few years. Is there scope for retraining them to redeploy them to decommissioning? What's the overall impact on jobs?”

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Stephen Tetlow off camera

“Thank you for that. Sir…”

Mr. Rothman off camera

“Good evening, my name's [inaudible] Rothman. How does the cost associated with the recommendations made compare against the assumptions made in the original investment appraisal back when the platforms were sanctioned?”

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Stephen Tetlow in vision

“Thank you for those. Jobs first...lots of jobs?”

Duncan Manning in vision

“So the jobs...there's about 1,500 people currently working both onshore and offshore in the Brent Decommissioning Project. As I said before, we've probably got 10 years still to run, so this isn't an overnight process. And, as you see, we have four platforms to decommission as well, so a lot of the work will focus on one platform for one specific type of work and then move on to the others. We have a blend of both Shell staff and contractors, and from a contracting perspective, clearly those contractors are going to move on to other decommissioning projects, having gained experience and skills in the Brent project. And from a Shell perspective also, those who have been working on the platforms have also the ability to move between the Brent platforms, but also out into the wider portfolio. Some of the personnel who work offshore have been with the platforms throughout the whole life cycle of those platforms. And, in fact, they will retire when the platform is finally de-manned. So for some of them it is literally the end of their career. It's a natural point in that career to cease working. And for those others, it's a chance to take the end of field life lessons from Brent and move those on to other platforms.”

Stephen Tetlow in vision

“Thank you. Costs?”

Alistair Hope in vision

“So I think the field has produced far more than we ever expected. So we've produced about 3 billion barrels of oil equivalent. It's, I think, about 8 per cent of the UK total, so it's been a prolific field. We call it a prolific national asset because 70 pence in every pound of revenue has gone to the government. So even after taking the cost of decommissioning into account, £20 billion has gone to the Treasury. So that gives you an idea, I think, of the economics. It's vastly in the credit of the government and the investors in the field.”

Stephen Tetlow in vision

“Just to return to the issue of jobs, if I may, something the Institution is very keen on, to ensure that the professionalism and training and continuous professional development of engineers in industry. Do you see the universities, for example? I noticed that you had the University of Aberdeen as one of your stakeholders, and I know you're involved with many other universities as well. Are the universities and the colleges of further education providing the sort of skills that you need or do you see this as a particularly new area of engineering?”

Alistair Hope in vision

“I think the fundamentals of mechanical engineering, or structural engineering, those are the basic skills and then you can adapt from that. It's the same with the trade skills, plating, welding, rigging, those sorts of things. We still need those people. It's important, I think, to say the North Sea's not dead, even though we're going through a tough period at the moment with low oil prices, things will hopefully return. There will be project developments. There will be lots of decommissioning to do. So we're going to need a new generation of people to do that, so we will need all those skills. At Able, we are looking at a partnership with one of the technical colleges there to have a decommissioning module. And indeed, many of the skills agencies are looking at that - how do they tailor the existing skills to the decommissioning market?”

Duncan Manning in vision

“I think one of the unusual things about decommissioning is unlike the commissioning phase where you're spending a lot of money on cold steel, most of the spend in decommissioning terms is spent on hot bodies, on people offshore or onshore actually doing work. So in that respect, generating the skills and experience is really useful because you can roll on to other decommissioning projects. And the skills and the technologies are not too different from what's used during the production phase. I think one of our lessons is actually a mindset change, thinking slightly differently about the problems and making the solutions that the engineers are coming up with fit for purpose for decommissioning. So not coming up with solutions to provide a capability offshore which is going to last the next 25, 35 years, when actually we know that the platform's only got two or three years left before it's finally removed. So it's a shift in mindset which is actually one of the key components and the key lessons from our perspective.”

Stephen Tetlow in vision

“Yes, I think behind all this- we talked about recycling of material, so it's also recycling of the skills and the lessons learnt, and it's not just technical, it's environmental. And of course, risk assessment, it's the safety lessons that you're learning, which, as you said earlier on, a lot of it is ground-breaking. So how are you recycling that back into the education system and skill system that you need?”

Duncan Manning in vision

“Well, we're active on all of the decommissioning conference circuits. We regularly talk at all of the decommissioning conferences to ensure those key lessons are passed on. We do have an engagement with academics. There's an increasing focus from an academic perspective on decommissioning, and so we do have engagements with academics to ensure those key lessons and key points that we're bringing out do get picked up by the academic community and then cross-fertilised with other decommissioning projects to understand what are the key lessons.”