North Sea continues to roar

Published in Nieuws on 26/10/16 by Chris van der Deijl

NOGEPA is the sector organisation for oil & gas producers. A sector with two overriding questions: how long can we continue production here and how can the remaining production be made sustainable? This will lead to greater cooperation in the decommissioning of offshore platforms no longer in use, but also to partnerships with wind-energy operators.

"In the past we used to compete with wind-energy producers for the available space at sea but now we are looking at the possibilities for working together, particularly when it comes to more sustainable production,” says Fraser Weir, North Sea asset director at Centrica, which operates two manned and three unmanned platforms from the Netherlands. Weir is also chairman of the sector organisation NOGEPA, an association of 13 on- and offshore oil & gas producers in the Netherlands.

“Gas fields are becoming more and more mature, and that means we have to compensate for reduced pressure by boosting compression. This is an energy-guzzling process, which is primarily applied to gas but can also be used – more cleanly – for electricity. What could be easier than laying a cable from a wind farm? Win-win: we produce more sustainably and the wind farm avoids lengthy transportation to the end user. Another form of synergy is the possible storage in a nearby field of surplus energy in the form of gas or hydrogen, ready for transportation at a later date.”

Keen interest

Until recently, NOGEPA was primarily occupied with internal industry-related and technical aspects, such as safety, inspections and guidelines. “Oil & gas extraction has now become an issue for public debate, however,” says Weir. “Do we still want to do it and for how long? As the sector organisation, NOGEPA naturally has an opinion on and an interest in this.”

How long stocks will remain exploitable on the Dutch section of the continental shelf is an important question for the sector. “It’s a finite length of time, that much is certain,” Weir continues. “How long exactly will depend on the price of gas, the cost-effectiveness and the pressure from increasingly stringent environmental regulations. In light of the Netherlands’ target to become CO2-neuttral by 2050, we can expect to be finished with oil & gas extraction by then, but whether it happens earlier, by 2030 or 2040 say, cannot be predicted. NOGEPA’s position is that we should approach the declining production in the smartest way possible. The large number of Dutch people employed in the offshore sector is also a major talking point. These are all technically educated people who can effectively transfer to other sectors. An industrial strategy needs to be formulated to hold onto these technicians and their expertise.”

Production from a field always starts high and decreases over time. It would be prudent to maximise production by exploiting new, admittedly smaller fields. “The Netherlands has made a smart move by introducing a small-field policy,” says Weir. “There will probably be no more large platforms built in the North Sea and once the existing platforms are gone, they will be truly gone. Anyone who still wants to develop gas fields needs to do so now, while the infrastructure is still in place. The dilemma is always: have I done everything possible before I reach the point of no return?”

The inevitable and compulsory deconstruction and clean-up – decommissioning – is on the horizon and can no longer be postponed. A recently established working group within NOGEPA is busy looking at ways to carry this out cost-effectively and safely. This is also an important issue for the Dutch state, which is a 40% stakeholder in almost all fields. Decommissioning is a technically complex task in which many Dutch companies are active, such as Boskalis and Heerema (which specialises in heavy lift vessels).

“Of course, there are international standards for this and much can be learnt elsewhere,” adds Wier. “But you always have to comply with local legislation and procedures. And with changing companies, technology and regulations. Nothing stays the same for long. The good thing is that while the 13 members of NOGEPA are competitors when it comes to locating and developing fields, they are often colleagues when it comes to decommissioning, although each company outsources the actual realisation. The process of decommissioning is a huge opportunity for seaports. They would do well to look at what parts of the work can be sent their way, enabling them to specialise in certain types of platform, for example. In combination with the rise of wind farms and their associated activities, the North Sea could remain a busy region for decades to come.”