Cost of Plug and Abandonment Operations in the Gulf of Mexico
To explore, delineate, and produce hydrocarbon reserves, holes must be drilled into geologic formations. During the course of production, wells may become inactive because of diminished economic returns or technical problems, and be shut-in or temporarily abandoned. At the end of the life of every well, the well will be permanently plugged and abandoned (P&A). The P&A process is the first stage of a decommissioning program in which a site is returned to its original greenfield status in accord with regulatory requirements. The purpose of this paper is to describe the factors that influence P&A operations and summarize cost statistics from a sample of 118 jobs and 390 wells performed by Tetra Applied Technologies in the Gulf of Mexico from 2002-2003. Descriptive statistics are summarized and the impact of learning and scale economies are examined. Regression models are derived that estimate the cost of P&A activities based on job characteristics.
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Document Type: Research Article
Publication date: 2007-06-01
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