Well Abandonment is commonly the largest area of expenditure in decommissioning oil and gas production assets and is often the area of largest cost overruns. Estimating the abandonment costs at end of well life provides some unique challenges to the engineer and the cost estimator due to the potential step change impact of technical decisions and regulatory requirements.
The strategic nature of decommissioning, and particularly abandonment, has only recently been recognized, with the growing impact on Company balance sheets, and the potential for significant cost overruns now in the spotlight in many organisations. Lessons can be learnt from recent industry experience, with good quality estimating practices at the heart of ensuring appropriate strategies can be implemented to minimize the current and future impact on the business.
This PetroKnowledge training course will highlight:
The strategic importance of understanding the scale of future abandonment liabilities
Current Good Estimation Practices and how these should be applied to well abandonment
The relationship between data quality and accuracy
Common risks of cost overrun in well abandonment and how to manage them
How good practices contribute to improved cost control
The value of Benchmarking
Training Objectives
What are the Goals?
This PetroKnowledge training course provides a comprehensive grounding in cost estimation good practices, how these apply to well abandonment, and why adoption is of strategic importance in financial planning and cost control.
By the end of this PetroKnowledge training course, participants will learn to:
Differentiate between both methods of cost estimation and Classes of Estimate
Build a comprehensive Basis of Estimate using Good Industry Practice
Appreciate levels of accuracy and their implications
Identify common risks of cost overrun in well abandonment and how to manage them
Build a probabilistic estimate and compare this with a deterministic approach for the same work scope
Utilize cost estimation as a tool for cost control
Target Audience
Who is this Training Course for?
All individuals involved in abandonment planning, cost provisioning or execution management who wish to improve or optimize their contribution to the well abandonment process will benefit from this course.
This training course is suitable to a wide range of professionals but will greatly benefit:
Well engineers
Team leaders and managers responsible for abandonment design
Finance and technical cost estimators responsible for identifying and managing future decommissioning liabilities
Project execution engineers
Team leaders and managers responsible for delivering well abandonment work scopes
Training Methods
How will this Training Course be Presented?
This PetroKnowledge training course will be taught using short introductory lectures followed by classroom discussion and debate to draw out key learning points and ensure the application of fundamentals is well understood. The tutor will use a number of real and imaginary examples to illustrate the key points and the potential impact of both good and poor management. Coverage of each area will include a tutorial exercise which may be undertaken individually or in small groups. The answers and conclusions drawn will be discussed and compared to illustrate the impact of varying approaches.
Organisational Impact
The strategic importance for oil and gas asset operators of managing future decommissioning and well abandonment liabilities is often overlooked. Participants will be able to knowledgably contribute to delivering effective financial and technical management of future abandonment obligations:
Contribute to the strategic financial planning of future well abandonment liabilities
Provide timely and effective identification and estimation of future financial liabilities associated with well abandonment
Provide early identification of cost reduction opportunities allowing their application and impact to be maximized
Lead the application of good cost estimation practices through the organisation
Personal Impact
Attendees will attain a thorough understanding of cost estimation good practices and their application to well abandonment work scopes, allowing them to:
Better manage future abandonment liabilities and forthcoming projects
Demonstrate technical competency in cost estimation
Position themselves for participation and increased responsibility in a growing sector
Lead the development and implementation of Good Practices within their organisation
Daily Agenda
Day One: Cost Estimate Methods and their Applicability to Well Abandonment
Types of Estimate and their Limitations
Classes of Estimate and their Application
Understanding Appropriate Accuracy
Recent Industry Experience
What Drives Abandonment costs?
The Ideal Data Set
Day Two: Basis of Estimate Good Practices
AACE Basis of Estimate model
Data Gathering
Benchmarking and Reconciliation
Managing Risks with a Risk Register
Day Three: Probabilistic Estimation
Methodology and Good Practice
Advantages
Avoiding the Pitfalls
Applicability
Day Four: Cost Control and Applying Lessons Learnt
Common Causes of Cost Overrun in Well Abandonment
Risk Mitigation
Project Maturation
Record Keeping
Potential Impact of Capturing and Applying Lessons Learnt