Definition of the Day – Oil & Gas Life Cycle “Abandonment”

The end of the life of the field is when it is no longer economic for the operator to continue production, i.e. when the operating costs exceed the revenue from the sale of production. It is common around the world that operator might abandon the field prior to its depletion as a result of sale to other interested party. Such acquisition takes place between the super major operating company and independent oil company when production declines to the level not commercially attractive to the super-major.

It is becoming increasingly common around the world that offshore facilities must be dismantled and removed and the site restored to its original condition. The major activities during the decommissioning phase are:

  • plug and abandon wells by putting cement plugs into the wells at various depths and remove the well-head and casing to a depth of about 2 meters below the surface or seabed
  • dismantle and remove the jacket and all facilities from the site, ensuring that there is no contamination of the environment from any oil or waste material remaining in the process facilities
  • restore the site to its original condition
  • conduct a final environmental impact study

Well Abandonment