1. MER and Decommissioning
Decommissioning Task Force (DTF) role
Nils Cohrs
Head of Decommissioning
27 November 2018

2. Decommissioning UKCS: Targets & Strategy
The OGA promotes and influences cost reduction through
Benchmarking to assess performance
Creating and publishing metrics with particular focus on high cost elements
Ensuring effective sharing of learning
Promoting innovative, collaborative contracting solutions
Promoting enhanced supply chain capability
Improvements to the Stewardship Survey
Target of <£39bn based on industry achieving 35% improvement on 2017 P50 probabilistic estimate of £59.7bn (2016 prices)
Cost reduction focus areas industries
Well P&A
45% of the total UKCS decommissioning cost
NNS & CNS removals 19% of the total UKCS decommissioning cost
Subsea infrastructure decommissioning 11% of the total UKCS decommissioning cost
NNS & CNS platform running costs
6% of the total UKCS decommissioning cost
Owners costs
Substructure removals
Well abandonment
Subsea infrastructure – (subsea removals, site remediation, monitoring
Topsides removals – (making safe topsides prep, topsides removal)
Onshore recycling & disposal
How?
Engage early on decommissioning plans with operators
Publicise benchmarks using OGA Stewardship Survey data
Identify cost reduction opportunities/ challenges for decommissioning
Promote collaboration across industry
Identify and share lessons learned
Support supply chain to develop capacity and efficiency
Ensure MER UK behaviour implemented

3. Decommissioning UKCS: Scope
>400
Fields with remaining decommissioning activity
>320
Platforms to be removed
£1.7–2bn
Estimated annual cost for next
five years
>4000
Wells to be plugged and abandoned
>2,000,000
tonnes of topside to be removed
>1,000,000
tonnes of structure to be removed
~75,000
tonnes of subsea infrastructure
to be removed
>20,000
kms of pipelines to be decommissioned
Where otherwise indicated the time period refers to life of basin
Source: OGA Data

4. 35% Need for rapid cost reduction results & learning 5 years £59.7bn
Step change – Target to reduce forecast costs quicker
35%
£39bn
5 years
2018
2022
2050

5. One path to 35% cost reduction
£59.7billion
= 2016 Baseline(2016 prices)
Key Enablers
Technical scope challenge
Technology
Supply Chain capability
Campaign work
= Reducing Decommissioning
costs by £21billion (2016 prices)
35%
Well
P&A
46%
Removals
26%
Subsea
Infra.
13%
Owners costs*
13%
98%
In addition to savings for remaining 2% of costs
£27bn
£15bn
£8bn
£8bn
Reduce by
Reduce by
Reduce by
Reduce by
~£14bn (-50%)
~£5bn (-30%)
~£2bn (-20%)
~£2bn (-20%)
Notes:
Applies deterministic Source: OGA Stewardship Survey 2017 (Decommissioning Survey)
percentages against probabilistic costs
All costs in 2016 prices
Scenario shown is possible route to 35% reduction. Other options may be available
Save £21 billion
*incl. Project Management

6. Cost reduction: Wells 35% 98% 180 wells per year £59.7billion
= 2016 Baseline(2016 prices)
Source: OGA Stewardship Survey 2017 (Decommissioning Survey)
No. of wells to be P&A’ed
Actuals
Forecast
Average: 117 wells per year
Average : 53 wells per year
Average: 10 wells per year
= Reducing Decommissioning costs by £21billion (2016 prices)
35%
Well
P&A
46%
Removal
26%
Subsea
Infra.
13%
Owners costs*
13%
98%
In addition to savings for remaining 2% of costs
£27bn
£15bn
£8bn
£8bn
Reduce by
Reduce by
Reduce by
Reduce by
~£14bn (-50%)
~£5bn (-30%)
~£2bn (-20%)
~£2bn (-20%)
Save £21 billion
Average Number of Wells to be P&A’d ( ):
180 wells per year
Notes:
Scenario shown is one path to 35% reduction. Other options are available
*incl. Project Management

7. Cost reduction: Removals
£59.7billion
= 2016 Baseline(2016 prices)
Forecast Topsides to be removed
= Reducing Decommissioning costs by £21billion (2016 prices)
35%
Well
P&A
46%
Removal
26%
Subsea
Infra.
13%
Owners costs*
13%
98%
In addition to savings for remaining 2% of costs
£27bn
£15bn
£8bn
£8bn
Reduce by
Reduce by
Reduce by
Reduce by
~£14bn (-50%)
~£5bn (-30%)
~£2bn (-20%)
~£2bn (-20%)
Source: OGA Stewardship Survey 2017 (Decommissioning Survey)
Save £21 billion
Average annual removals ( ):
85,000 tonnes per year
Notes:
Scenario shown is one path to 35% reduction. Other options are available
*incl. Project Management

8. Stewardship Expectation
The path to success
Late life operation
LONG GLIDE PATH
≥ 6 yrs before CoP
≥ 3yrs before CoP
1 - 3 yrs before CoP
Benchmarking and cost forecast dashboard
Current Status
Learning/Knowledge shared
Potential for re-use and campaigns
Contracting / Execution Strategies
Strategy
Plan
Implement abandonment activities and decom preparations
Stewardship Expectation

9. Good cost reduction progress already being achieved
The path to delivering
Operator-Supplier alignment is the key challenge:
to sustain savings
to deliver more
Commitment to cost reduction
Good cost reduction progress
already being achieved
£59.7bn
£58bn
£55.7bn
2017 (P50) cost
estimate 2016 prices
(P50) like for like: inventory & 2016 prices
(P50) updated 2018
inventory, 2017 prices
Question to ask:
What is your core business?