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The government taketh and the government also giveth, or so it would seem in widely different quarters of the Gulf of Mexico. On one end, operators struggle to recover from the federally imposed offshore drilling moratorium, while at the other end of the spectrum, another government decree has helped germinate a thriving business.
As rigs return to actually drilling wells, companies leveraged heavily in the removal of non-producing platforms find themselves in a regional market that some analysts have valued at up to $600 million, and which shows no signs of declining anytime soon. Owing in no small part to a late 2010 federal regulation, operators have a comparatively small window in which to plug and abandon (P&A) wells, and subsequently decommission platforms that have outlived their productive life. The regulation, in turn, has helped generate a boom for home-grown companies that specialize in the removal of structures and seabed debris.
While no precise numbers are readily available, what is known is that time is running out for hundreds of now-deceased platforms to be removed, along with any evidence that they were ever there. “There are more than 600 platforms dead in the water that the federal government says must be removed,” says Jimmie ‘Beau” Martin, sales manager for family-owned B&J Martin, Inc. of Galliano, La., whose forte is cleaning up seabed debris once the structure has been dismantled and taken away.
The scope of a single field abandonment and decommissioning project was reflected in a major contract that Port Fourchon tenant Cal Dive International Inc. inked in January with an unidentified Gulf of Mexico operator. Estimated to be worth about $25 million, the pact covers the abandonment of 16 wells, seven pipelines, and the removal of eight structures. The sweeping project is scheduled to be completed by the end of June.
Galliano’s family-owned Montco Offshore Inc. has long been captivated by the tremendous scale of the P&A and decommissioning market in the Gulf of Mexico, so much so that it completely restructured its once-diversified marine fleet to accommodate this segment. With the March delivery of a newbuild vessel, the 65-year-old company, which once boasted a mixed bag of crew, work and tugboats, now operates a total fleet comprising seven liftboats dedicated almost entirely to P&A and decommissioning activities.
“Our bread and butter is plug-and-abandonment and decommissioning,” said family member, Dr. Joseph Orgeron, Montco’s chief technology officer. “Today, oil and gas companies have to remove these platforms. They can no longer postpone decommissioning.”
This is particularly true, since the U.S. Department of Interior (DOI) enacted the so-called “Idle Iron” directive that became effective last October. Under the new mandate, operators have exactly one year after the lease expires, and production has ceased, to P&A wells and subsequently decommission surface facilities. Under the mandate, nearly 3,500 wells are scheduled to be permanently plugged, and some 650 platforms will be removed. Similar requirements have long been in effect, but operators not overly anxious to incur what essentially was a sizeable hole in the books usually requested, and usually received, lengthy extensions.
With the Idle Iron edict, the DOI says it will strictly enforce the P&A and decommissioning stipulations, prompting companies like Montco to respond accordingly. The latest addition to the Montco liftboat fleet is the newly commissioned L/B Robert, which Orgeron described as an “all-in-one decommissioning machine.”
Regarded as one of the industry’s largest dedicated liftboats, the L/B Robert, which is rated to a maximum working water depth of 280 ft, was delivered from Houma, La.’s Gulf Island Marine Fabricators in early March. With the helideck, the new liftboat is nearly 295 ft long and 135 ft wide, Orgeron said, pointing out that the vessel’s generous deck space and its 500-ton crane allow it to lift a dead jacket and bring it to shore.
Unlike its smaller counterparts, the L/B Robert is large enough to handle all three phases of a P&A and decommissioning operation in less than four days without having to change out equipment after each step, as is the case with the smaller vessels, Orgeron said.
“The first phase is the rig-less plug-and-abandonment, where we basically pour cement in the well and wait until it has cured and been tested. The second phase involves salvaging anything on the topsides that has value, like, for instance, the helipad that could be used on another platform. In the third step, divers or special cutting crews cut the conductors and piles, so the jacket can be lifted and hauled to shore for scrap. With the size of the L/B Robert and its crane (lifting) capacity, it can handle all the different operations simultaneously without having to bring in a derrick barge to lift the jacket and bring it to shore,” he said.
Government regulations aside, Orgeron said it financially behooves companies to plug wells and remove platforms, once their productive cycle has ended, rather than take the chance of a storm doing the job for them. “The costs of plugging a well and removing a platform from the seabed after it has been toppled in a hurricane would be at least 10 times higher,” he said. “Oil and gas companies have the responsibility and the governmental liability to plug the wells, remove the platform and restore a clean ocean bottom.”
Restoring a clean ocean bottom is where 64-year-old B&J Martin steps into the picture. Most of the privately held company’s business centers on removing post-decommissioning seabed debris with its patented Gorilla Net, which is pulled behind what closely resembles a shrimping trawler.
The company claims the 250 nets in its inventory are designed to be extremely sturdy, enabling them to pick up more volume and variety of seabed debris than any comparable retrieval tool on the market. The company says one of the nets is capable of clearing several tons of assorted debris within an 80-ft pass, which precedes a verification run to confirm the seabed has indeed been completely restored. “We’re really seeing an increase in abandonments, and clients are asking us to pick up more debris,” said Martin, the company’s sales manager.
As evidenced by the international attendance at the four-year-old Decommissioning and Abandonment Summit in Houston, Montco’s Orgeron said operators in more adolescent production theaters are looking closely at how their counterparts in the mature Gulf of Mexico are plugging and decommissioning dead wells and fields.
“The Gulf of Mexico is one of the more mature markets on the planet for decommissioning, so others come here to see how we’re doing it technically,” he said. “We’re blazing a trail that a lot of other less mature countries are keeping an eye on, because they know that ultimately, they’ll have to do the same thing.” 
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| The newly commissioned L/B Robert prepares to leave the Gulf Island Marine Fabricators yard in Houma, La., to become the seventh member of the Montco Offshore liftboat fleet. |
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