Decommissioning Trends

BOEM contracted Energy Research Group, LLC to conduct an in-depth study at GOM shallow and deepwater activity statistics through 2017 and provides an analytical framework to quantify costs and cost drivers in the context of operator business decisions. Reserves and resource assessments underlie all investment decisions made by oil and gas companies. When the net revenue from production falls below operating cost for a sustained period there is no economic benefit derived and operators will eventually shut-in wells and idle structures. The study discusses the potential benefits, costs and risks associated with maintaining critical Gulf of Mexico (GOM) oil and gas infrastructure beyond its useful life. The analysis includes cost category estimates, rules-of-thumb and operating cost ranges. A composite structure/well forecast and sensitivity cases are provided for the GOM shallow and deepwater basins.

Gulf of Mexico Decommissioning Trends and Operating Cost Estimation – May 2018 (BOEM 2019-013)