Cost Analysis of Plug and Abandonment Operations on the Norwegian Continental Shelf
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Norway is one of the world's largest petroleum exporters and has been producing oil and gas for almost 50 years. Many of the petroleum fields are soon reaching their maturity stage where income cannot cover the expenses, and must shut down production. In this process, all associated wells are required to be plugged and abandoned. These operations are expensive, and there is a need for conducting targeted research aimed at reducing the costs associated with plug and abandonment (P&A). In this thesis we consider 82 currently producing fields and 3308 wellbores on the Norwegian Continental Shelf (NCS). A categorisation of these wellbores was performed by using publicly available information on wellbore statuses in combination with a method for determining the required remaining P&A operations. This information was used to estimate the total costs related to P&A operations for each petroleum field on the NCS. The categorisation, cost estimate and information on forecast production and expenses, formed the basis for the development of three optimisation models and one real options model aimed at conducting cost and planning analyses of P&A operations. We address this cost analysis of P&A operations holistically by focusing on three different planning levels: strategic, tactical and operational. Our study shows that P&A costs should be included when planning for shut downs and that in general there are incentives for postponing shut downs both due to discount rate benefits and uncertainty in petroleum prices. In addition, we found that collaboration in the planning of multi-well P&A campaigns might be economic desirable compared to planning for these operations for fields and wells independently. This thesis' main contribution is the development of optimisation models that can be used for several purposes associated with P&A, a subject that up to this point is at best scarcely covered in current literature. We believe that the models could be a good starting point for robust cost analysis and planning tools relevant for different actors in the Norwegian petroleum industry.