Cost Analysis of Decommissioning Process of Offshore Structure: A Comparative Study for Removal Options

Abstract

A good number of offshore oil and gas installations in Nigeria are going towards the end of their production life, which means that the decommissioning activity will be increasing in years to come. Decommissioning of the offshore installation is a costly and challenging task. A proper cost analysis is needed to identify the effective techniques, safety challenges and issues associated with decommissioning activities.
This study introduces an approach to assessing the financial and non-financial criteria of each decommissioning option by which the assessment of the feasibility of environmental, health and safety, and public outcomes will be used to strike a balance towards the best removal option with the lowest financial and environmental impacts combined. The costs for effective decommissioning of offshore structure were calculated using complete removal option, partial removal option, and leave-in-place option. From the results Leave-in-place removal option gave a cost of $18,560,200, Complete removal option $106,364,400, Partial removal option $64,610,800. Striking the balance of costs with other liability will yield further costs for leave in place option which means that the Toppling in Place Partial Removal Option, displayed the best results in this study