Wednesday 20 June 2018

A new decommissioning technology which could cut hundreds of millions from the decommissioning bill for both the taxpayer and the oil and gas industry has been successfully tested by Spirit Energy.

The new technique to plug and abandon oil and gas wells, developed by Interwell, has been tested for the first time in Europe by Spirit Energy in Caythorpe, Yorkshire, on an onshore gas well.

The trial of the new approach to decommissioning – which uses thermite and a controlled chemical reaction in the well rather than the traditional cement plug – was co-funded by Spirit Energy and the Oil & Gas Technology Centre and is the next step towards offshore trials of the technology.

The thermite reaction has been used for centuries in welding railway tracks together, and should it now be used widely offshore it could significantly cut the cost of plugging and abandoning wells – one of the most expensive phases of decommissioning for both operators and HM Treasury, as decommissioning operations in the UK are subject to tax relief.

Oil & Gas UK estimates suggest nearly £17billion will be spent on decommissioning on the UK Continental Shelf between now and 2025 – with the well plugging and abandonment phase typically accounting for nearly half the cost of decommissioning projects.

The Caythorpe trial follows similar tests in Canada, and Spirit Energy is now continuing to work closely with Interwell, other operators and regulators to gain acceptance for the technology as a permanent barrier and identify further decommissioning projects which could benefit from the technology.