Repsol Sinopec Taps Archer for $165 Million Decommissioning Project in North Sea

Repsol Sinopec Resources UK has awarded a $165 million decommissioning contract to Archer to execute the plug and abandonment (P&A) of 30 wells in the Fulmar Field and two wells in the Halley Field in the UK North Sea.

The contract is a fully integrated P&A project, covering the complete work scope, including a modular P&A rig, well services, and well engineering, Archer said.

The Fulmar scope includes the removal of the existing drilling facility and the installation of one of our P&A rigs. 

In addition, Archer said it would deploy its P&A well services offering to reduce time and cost to plug each well. 

This new contract will start immediately, and Archer expects integrated offshore P&A operations to start in the second half of 2024 or early 2025.

Dag Skindlo, CEO of Archer, said the estimated value of the integrated contract stands at roughly $165 million spread over the next four to five years. 

“We have noted an uptake in interest and tender proposals for such holistic P&A models, and we believe that this contract and similar project awards will drive growth in both turnover and profitability. The permanent plugging and abandonment of oil and gas wells is an essential activity as the world decarbonize on the road to net-zero. Our goal is to industrialize the P&A process and spearhead innovation to cut operators’ P&A costs globally,” Skindlo said.

Adam Sheikh, Repsol Sinopec’s VP of Decommissioning and Energy Transition said: “We aim to deliver one of the North Sea’s most ambitious decommissioning programs in the years ahead – including the full decommissioning of our Fulmar Alpha Asset. This contract award represents a significant milestone in our decommissioning journey, and my thanks go to the teams for the vast amount of work to get us to this stage. As a company we intend to deliver decommissioning work as cost-effectively as possible whilst minimising environmental impact. We look forward to working closely with our partner Archer to safely deliver this decommissioning scope of works on our Fulmar Alpha facility”.

UK North Sea Oil Firms Spent £1.6 Billion on Decommissioning in 2022

The North Sea Transition Authority (NSTA) said last week that the North Sea oil and gas industry spent £1.6 billion decommissioning redundant wells and infrastructure in 2022, “more than in any of the previous five years.”

The latest North Sea Transition Authority (NSTA) Decommissioning Cost and Performance Report revealed that the industry spent a total of around £8 billion from 2017-22.

“And activity levels are expected to remain high, with about £2 billion a year forecast to be spent on decommissioning in the next decade, a massive opportunity to keep developing skills and experience in the basin and help the supply chain win lucrative contracts overseas by reinforcing its status as global leader,” the NSTA said.

According to NSTA, some £21 billion of UK offshore decommissioning spending is forecast in the next decade