Ensuring Successful Decommissioning and Abandonment of Offshore & Onshore Assets

1. Inc. Langdon Seah | Hyder Consulting | EC Harris
ENSURING SUCCESSFUL
DECOMMISSIONING AND ABANDONMENT
OF OFFSHORE & ONSHORE ASSETS
Feb 2017

2. © Arcadis 2015
Health and Safety First and Foremost
ARCADIS’ oil and gas team is committed to consistently delivering industry
leading safety and technical leadership across the geographies we serve.
Safety Excellence Award:
Chevron Environmental
Management Company,
2009
Contractor Safety and
Environmental
Excellence Award:
Marathon Oil, 2010
Safety Excellence Award:
Chevron Environmental
Management Company,
2011
Team Safety Recognition
Award: Confidential Client,
17 months 100,000 hrs w/o
Corporate Reportable, 2011
Team Safety Recognition
Award: Confidential Client,
53,000 hrs w/o Corporate
Reportable, 2011
Contractor Performance
Award: BP, 5 years >5,000
hrs w/o Corporate
Reportable, 2011
Supplier Safety Achievement Award:
Confidential Client: 2009, 2010, 2011
Global Contractor Safety
Council, Safety Champion
Award:
Shell, 2012 (3 Awards),
2013 (2 Awards)
2009 2010 20122011 2013
Flawless Safety Execution
Award:
Confidential Client (3 awards),
2013
Elite Contractor Award
Marathon for H&S performance,
2013
Supplier Safety
Award
BP, 3rd year in a row
for working without a
recordable injury,
2014
Europe & South
Africa SGW FDG
Annual HSSE
Award:
Shell, 2014
2014
2
2015

3. © Arcadis 2015
I. Introduction to Arcadis Oil & Gas
II. Understanding the Decommissioning challenges
III. How Arcadis supports the Decommissioning Process
IV. Success factors – What we find
V. Where have we supported other organisations
Contents

4. © Arcadis 2015
ARCADIS – at a glanceKEYSTATISTICS
GEOGRAPHIES
€2.8bn
REVENUE
125
YEAR HISTORY
28,000 PEOPLE
Worldwide
TOP
IN WORLD 10 TOP
IN EUROPE 3 32%
36%
36%
Emerging
Markets Europe
North America
ARCADIS is the leading global natural
and built asset design and consultancy
firm providing consultancy, planning,
architectural design, environmental,
engineering and premium management
services across all markets
ARCADIS supports our clients during
every step of the O&G value chain from
exploration & production, refining,
transportation, and marketing with
integrated environmental, water,
infrastructure and program management
expertise throughout the asset life-cycle
.

5. © Arcadis 2015
Every day, 3,000 Arcadians support our Oil & Gas
clients
Core Oil & Gas Services
 Environmental Management
 Remediation & Decommissioning
 Productivity Improvement
 Project Management & Cost
Management
 Enabling Infrastructure Works
 Asset Maintenance
 HSSE, Process Safety
600
O&G
Production
Facilities
50
refineries &
terminals
150
pipeline sites
Our experience
includes :

6. © Arcadis 2015
ARCADIS supports our oil and gas clients during every step of the
O&G value chain from exploration and production, refining,
transportation, and marketing
A selection of our global IOC, NOC, and regional oil and gas clients include:

7. © Arcadis 2015
With over 65 years of experience with the oil and gas industry,
ARCADIS supports our clients during every step of the asset lifecycle
Facility Infrastructure
Product Storage and
Transportation Systems
Piping, and Delivery Systems
Instrumentation, and Control
Project Management
Services
Engineering & Design
Construction Management
Cost Management & Claims
Support
Safety & Risk Management
Planning and Strategy
Development
Data Acquisition
Information Management
Site Investigation
Remediation
Demolition
Restoration
Decommissioning
Portfolio Approaches
Asset Management
Asset Integrity
Operational Efficiency
Project Services
Contract Management
Cost Management
Supply Chain Solutions
Process Safety Management
Regulatory Compliance
Health & Safety Services
ENGINEERING &
CONSTRUCTION
OPERATIONS &
MAINTENANCEFRONT END PLANNING
Oil Field Development
Programmes
Due Diligence
Feasibility Studies
Business Planning
Preliminary Engineering
Cost Estimating
Planning & Permitting
Project Development
Support
Safety & Risk
Management
ASSET RETIREMENT

8. © Arcadis 2015
Why Arcadis?
Engaged as a global environmental partner by 4 of
the top 5 oil companies for Environmental Strategy,
Planning & Assessment
Leading Project Cost Management company in
Asia… saving over 15% on CAPEX costs for our
Oil& Gas clients on major projects
Managed and delivered the successful end-to end
decommissioning of over 24 challenging wells in
North America plus many other projects globally
Currently engaged in UK North Sea largest Decom
Project (Brent)
Developer of innovative environmental strategies for
offshore structure decommissioning
Environmental partner for
worlds leading oil
companies
Expert in Cost
Management
Deep O&G Decom
Experience
Involved in the largest
Decom projects
Thought leader in Decom
Strategies

9. © Arcadis 2015
What are the Challenges?
Major capital projects are not easy to
deliver...
64% of projects face
cost overruns
73% of projects are reporting
schedule delays
Source: Ernst & Young Spotlight on
oil and gas megaprojects 2014
Decommissioning Projects face even greater uncertainties
with rapidly evolving regulatory frameworks, highly public
visibility, lack of experience, challenging environments……

10. © Arcadis 2015
Decommissioning in SE Asia
faces a number of specific
challenges … (1)
Abandonment / decommissioning of onshore wells and offshore facilities is fast
becoming a critical issue in SE Asia. It is estimated that over 100 on-shore wells
currently need to be sustainably abandoned in Sarawak & Borneo alone ; and
over 400 offshore structures and their associated wells are expected to be
decommissioned over the next 20 years in Malaysia and Borneo. Similar needs
are developing across SE Asia.
Thought leadership will be required to assist in
developing environmentally and economically
sustainable strategies to ensure that this issue
can be managed responsibly.
Arcadis look forward to the challenges ahead.
Together we can ensure that we leave a
sustainable legacy for future generations.

11. © Arcadis 2015
Decommissioning in SE Asia
faces a number of specific
challenges … (2)
Developing Regulatory Environment : Multiple stakeholders
at national, state and local level in SE Asia; potential conflicting
interests. Absence of well developed Regulatory frameworks.
Disparate environmental expectations/standards eg from IOCs and
local regulators
Cost Estimation : the paucity of decom project experience in the
region can lead to in-accurate Decom cost estimation
Lack of Decom Experience : this is a relatively new sector for
the industry and local and regional companies lack experience and
capability. Need to build a local decom indutsry
Minimising Cost : Completing the Decom process at minimum
capital cost requires an optimal Decom strategy and effective project
and cost management
Decom Strategy : selecting and implementing the best
Environmentally Sustainable and economically viable solution
requires a deep understanding of the environmental issues and
alternative approaches combined with strong project governance

12. © Arcadis 2015
Potential IMPACTS to Your Business?
Insufficient
consideration of
environmental,
social and
economic issues
can result in
substantial but
avoidable project
delays and cost
overruns

13. © Arcadis 2015
Arcadis
Decommissioning
services provide
a comprehensive
solution
Integrated
environmental,
engineering,
advisory
and commercial
services
Improved
investment
decisions and an
expedient receipt of
development
permits
Anticipate
and manage
increased
stakeholder
expectations
Secure and
maintain the
social ‘license
to operate’
Consider likely
issues across the
whole decom project
life cycle
Fully
developed
business case;
strategy to retain
permits; and
an exit plan
in place
Go beyond
regulatory
compliance
Manage your
reputation
Detailed
understanding
of stakeholder
requirements
Ensure project
viability
Combine global
resources with
local market
knowledge and
presence
Reliable on the
ground delivery
Trusted partner
with detailed
understanding of
your business
Actionable and
unambiguous
advice
Knowledge
share and
innovation
Deliver
cost effective
and faster
solutions
Early strategic
consideration
of likely
environment
and economic
challenges is a
low cost, high
impact activity

14. © Arcadis 2015 February 13, 2017Deccommisioning VP - Arcadis 14
Decommissioning – Arcadis Proposition
Stakeholder
Needs
PRODUCTION CESSATION
MANAGEMENT
VALUE & COLLABORATION
RELATIONSHIP
MANAGEMENT
LEGAL LEGACY & STATUORY
COMPLIANCE
BRAND REPUTATION
PROCUREMENT AND
CONTRACT SUPPORT
RISK
ALLOCATION/OPTIMISATION
SCHEDULE &
PROGRAMME
REPEATABILITY & LESSONS
LEARNT
SAFETY
ENVIRONMENTAL
COMPLIANCE
CERTAINTY (Time & Cost)

15. © Arcadis 2015 February 13, 2017Deccommisioning VP - Arcadis 15
Legally
Brand
Reputation
STAKEHOLDER NEEDS :
DELIVER THE DECOMMISSIONING PROGRAMME SAFELY WITH INCREASED CERTAINTY,
VALUE & REPUTATION INTACT
Risk
allocation /
Optimisation
Certainty
• Understanding of
Legal and
statutory
obligations
• Recognised by
Authorities as
industry leader
• Experience/
Expertise dealing
with Government
organisations and
relevant bodies.
• Proven record in
delivering
complex
decommissioning
programmes
• ARCADIS share
value linked to
delivery
• Scale in market
• Willing to share
risk by linking
Brands
• Global No.1 in
remediation
• Scope definition
• Data sets and
knowledge
• Contracting
strategies
• Estimating
knowledge and
systems
• Risk
Management
• Tech Knowledge
• $931m of
projects
• Supply chain
knowledge
• WAN’s &
Productivity
knowledge
• Asset Condition
surveys
• Environmental
Capability /
History
• Contracting
strategy &
Solutions – PDCC
Decoupled
contract
• Performance
Based
Contracting e.g.
and Project
Foxglove, GRIP®
• Project Controls
• Programme &
PM experience
and processes
• Experienced Risk
managers and
industry
recognised
process
Safely
• Health & Safety
embedded in our
culture and
approach
• Environmental
experts
• Onshore HSE /
CDM experts
• Breadth of
knowledge and
cross capability
• Proven record
• Awards
• Global safety
systems
Schedule
• Knowledge &
data sets
• Planning
• Productivity
Measurement &
Enhancement
• WAN’s
• Streamlined
contracting
strategies to
optimise time
• Front end
engagement
models
• Knowledge of
permitting
Value
• Cost Estimation
• Optimised cost
management
• Safe pair of
hands
• Programme
partner
committed to
long term
• Recycling and
resale of
equipment

16. © Arcadis 2015
Decommissioning
of Offshore
Structures
Environmental
Options Study
Develop
Environmental
Management
Plan
Stakeholder
Engagement
Pre, During
& Post
Environmental
Studies
Advocacy
& Reporting
Remedial &
Restoration
Recommend-
ations
Cost
Estimation
Programme
& Project
Management
3 Activities are
critical to the
execution of
successful Decom
Project :
• Environmental
Options
Assessment
• Environmental
Management &
Technical
Services
• Project
Management
Services
Cost
Management

17. © Arcadis 2015
Offshore Facilities Decommissioning
Project Management
• PMO/portfolio
management
• PMC
• Project scheduling
• Field Monitoring and
HSSE Oversight
• Report day-to-day
operation
• Risk Management
Cost Management
• Cost estimation &
benchmarking
• Quantity Surveying
• Cost monitoring and
control
• Contract Strategy &
Management
• Claims and variations
avoidance and
management
Develop
Environmental
Management Plan
• Environmental
Impact Assessment
• Environmental
Baseline Study
Pre, During & Post
Environmental Study
• Pre, During and Post
completion Site
Environmental
Monitoring and
reporting
Remedial and
Restoration
Recommendation
• Provide
environmental
options and
recommendation for
remedial and
restoration of site
Environmental
Option Study
• Conduct
decommissioning
option study
Stakeholders
Engagement
• Identify and engage
stakeholders on
decommissioning
study, program and
activities
Advocacy and
Reporting
• Compliance to
regulatory
requirement and
legal framework for
transfer of removed
and abandoned
facilities
• Data update and
reporting of “new
site”
• Legal documentation
Project Management Services
Environmental Management & Technical Services
13 February 2017 17
Environmental Options Assessment
3 Critical Activities to ensure
environmentally sustainable
decommissioning at minimal
economic cost

18. © Arcadis 2015
Decommissioning
of Onshore
Structures
Agency
Consultation
Develop &
Implement
Environmental
Management
Plan
Reporting
Develop Plan
for Site
Condition Control
Advocacy
Develop
Plan for
Access
Cost
Estimation
Programme
& Project
Management
3 Activities are
critical to the
execution of
successful Decom
Project :
• Environmental
Options
Assessment
• Environmental
Management &
Technical
Services
• Project
Management
Services
Cost
Management

19. © Arcadis 2015
Onshore Facilities Decommissioning
Project Management
• PMO/portfolio
management
• PMC
• Project scheduling
• Field Monitoring and
HSSE Oversight
• Report day-to-day
operation
• Risk Management
Cost Management
• Cost estimation &
benchmarking
• Quantity Surveying
• Cost monitoring and
control
• Contract Strategy &
Management
• Claims and variations
avoidance and
management
Develop
Environmental
Management Plan
• Environmental
Baseline Study
• Pre, during and Post
Environmental
Monitoring
• Site Environmental
Remedial and
Restoration
Develop Plan for
access
• Route access roads
around sensitive
receptors
Develop Plan for site
Condition Control
• Erosion and
sedimentation
control, spill control
• Well Plugging Design
Agency Consultation
• Engage stakeholders
on well plugging
program and
activities
Advocacy
• Ensure compliance
to regulatory
requirement and
legal transfer of site
to owner complete
with reports
• Acceptance of well
plugging design and
completed well
plugging report
Reporting
• Well
Reconnaissance
• Completed well
abandonment
inspection report
• Legal documentation
Project Management Services
Environmental Management & Technical Services
13 February 2017 19
Regulatory Framework and Advocacy
3 Critical Activities to ensure
environmentally sustainable
decommissioning at minimal
economic cost

20. © Arcadis 2015
Where have we done this
before?
Selected profiles from our hundreds of projects
worldwide

21. © Arcadis 2015
Offshore Asset Decommissioning
21
From this ..
.. to this
Imagine
In Depth Study into the impact of artificial
offshore reef creation using abandoned
Offshore Oil & Gas Structures
Approach
Multi-year study to determine the health,
development, and maturation period for a
new artificial reef to provide data to O&G
offshore Decom sector
WHY – The oil industry needs to have solid
data that demonstrates that leave-in-place
options provide a positive environmental
outcome, and that reefs can be part of the
available options with a net benefit.
Result
Oil production structural material can
effectively be left on the sea floor and
converted into a viable and productive reef.
Bird Island Reef Development
Netherlands
Report for :
• National Conference on Ecosystem Restoration
• SETAC Europe – Special Session on Offshore
Abandonment
• Ecological Society of America/Society of Ecological
Restoration
Roost Completion
Before Demolition

22. © Arcadis 2015
Offshore Asset Decommissioning
22
From this ..
.. to this
Imagine
Increase the productivity of offshore
decommissioning activities through improved
work estimating and scheduling process for a
major production asset in the UK North sea
Approach
 Development of Work Activity Norms for
offshore topside decommissioning work
disciplines
 Assessment of contractor productivity
using Time on Tools Approach
 Identify & implement approached to
improve productivity
 Refine decom project scheduling using
refined Norms & known productivity levels
Result
 Work Activity Norms for Offshore
Decommissioning
 Improved productivity for Decom work
 Will lead to reduced cost and reduced
time for completion of the project
Major Offshore Production
Assets
Decommissioning Productivity
Assessment & Improved work
Scheduling
UK North Sea
Client Confidential
Before Demolition

23. © Arcadis 2015
Ecological re-use of abandoned platforms
Offshore Platform
Abandonment Strategy :
Arcadis ERAP Strategy
UK North Sea
Challenge
Many old offshore platforms on the North Sea
Continental Shelf must be dismantled. Dismantling
is very expensive and risky. Is there an alternative
with lower risks and costs?
Our idea
Do not dismantle the platforms, but re-use them
ecologically. This will help the Marine Strategy
Directive and is much cheaper and less risky than
dismantling
What’s the ecological advantage?
The North Sea floor is mainly sandy. Several
species benefit of hard substrate environments (e.g.
benthos, fish). On hard substrate spots in the North
Sea, like ship wrecks, you find a wealth of species.
So hard substrate structures in combination with a
sandy environment leads to higher biodiversity.
Changes and risks
The ERAP concept offers a effective solution for
dealing with abandoned platforms. It enhances the
ecosystem diversity and help to obtain a good
environmental status. Next to ecological value a
platform can have multiple uses, like diving, fishing,
research, international cooperation, and
governance.
23

24. © Arcadis 2015
Offshore Environmental Assessments & Planning
Over 50 Arcadis
Environmental Assessments &
Planning for the Oil & Gas
sector on Asia
Summary
The Arcadis Environmental team have completed
over 50 engagements for oil & gas projects in Asia,
including :
 Environmental Impact Studies
 Quantitative Risk Assessment
 Environmental Planning
 Baseline Environmental Surveys
 Permitting
Andaman Sea
One example is our work for ENI where we were
responsible for conducting Environmental Impact
Assessment studies, Quantitative Risk Analysis and
Emergency Response Planning for ENI India’s
offshore drilling operations in AN-DWN-2003/2
block, Andaman Sea. Major tasks included:
 Collection of Secondary data,
 Preparation of Environmental Management Plan
 Quantitative Risk Assessment
 Formulating the Emergency Response Plan
An important element of the project was oil spill
modelling in the form of OILMAP and HYDROMAP
and contingency planning
24

25. © Arcadis 2015
Offshore Project Cost Management
Cost Management for
project work for over 200
offshore structures
Client Confidential, SE Asia
Arcadis have been providing ongoing
cost management for over 10 years for a
portfolio of over 200 offshore production
structures for an lnternational Oil
Company in SE Asia
The scope covers Cost Estimating, Cost
Engineering & Quantity Surveying services
for a wide range of projects including new
build, brownfield, life extension, maintenance
and decommissioning.
Outcomes
• Overall cost of projects reduced by 15-
20%
• Through the work, Arcadis has built up
an in-depth knowledge base of offshore
oil & gas project costs in SE Asia,
particularly for East Malaysia & Brunei.
25

26. © Arcadis 2015
Well Abandonment
On Shore Well Abandonment
Confidential Client
Netherlands
Imagine
Remediation of an old oil production site in the
Netherlands, overcoming severe groundwater
contamination issues and soil contamination
Approach
ARCADIS managed the remediation of the
site, overcoming major issues with soil
contamination with petroleum products,
mercury and arsenic.
Result
ARCADIS successfully completed the project,
gaining substantial regulatory and client
satisfaction with the remediation.
© ARCADIS13 February 201726

27. © Arcadis 2015
Well Abandonment
Well Abandonment
24 Wells, USA
Confidential Client,
Pennsylvania, USA
Imagine
Plugging Program Management – Manage
the Quaker State Legacy Oil Well Plugging
Program on Behalf of Shell
Approach
• Project Management
• Health and Safety Management of
Subcontractors. Share Learnings Between
Downstream and Upstream Programs
• Due Diligence- Determine Plugging
Responsibility,Research Historical
Production Records, Sales Agreements,
Lease Documents, Maps, and Interviews
WithFormer Employees.
• Subcontractor Procurement and Oversight
Result
ARCADIS completed the plugging program
and gained confirmation from the
Pennsylvania Department of Environmental
Protection that all plugging and site
remediation activities had been completed
satisfactorily.
27

28. © Arcadis 2015
Well Abandonment
28
From this ..
.. to this
Arcadis managed the entire
program from identification of well
locations through to site
restoration and regulatory
approval

29. © ARCADIS13 February 201729
CONTACTS
2
dd +6 (0) 3 2106 8168
m +6 (0) 1 2712 5076
e syed.mahadzir@arcadis.com
Arcadis
Level 5, Menara TSR | 12 Jalan
PJU 7/3, Mutiara Damansara |
47810 Petaling Jaya | Malaysia
SYED MAHADZIR
Head, Cost Management, Malaysia
dd +6 (0) 3 2106 6032
m +6 (0) 1 3350 0038
e ian.kennedy@arcadis.com
Arcadis
Level 5, Menara TSR | 12 Jalan
PJU 7/3, Mutiara Damansara |
47810 Petaling Jaya | Malaysia
DR IAN KENNEDY
Head, Oil & Gas, Asia
dd +6 (0) 3 2106 6099
m +6 (0)1 9815 4557
e jerry.langan@arcadis.com
Arcadis
Level 5, Menara TSR | 12 Jalan
PJU 7/3, Mutiara Damansara |
47810 Petaling Jaya | Malaysia
JERRY SIRAN LANGAN
Senior Consultant, Oil & Gas
Decommissioning, SE Asia