Decommissioning Cost Functions in the Gulf of Mexico

Abstract

The cost to decommission offshore structures in the Gulf of Mexico is examined based on 60 projects managed by Twachtman, Synder, & Byrd, Inc., over the years 1991–2001. Cost functions are established for each stage of decommissioning, including well plugging and abandonment, structure preparation, pipeline abandonment, structure removal, and site clearance and verification. The component cost of decommissioning is analyzed statistically, and regression models are empirically derived using various descriptor variables. A candid discussion of the limitations of analysis is also presented. This paper represents the first empirical study to construct decommissioning cost functions for the Gulf of Mexico region based on actual job data.