Life Extension of Offshore Assets – Balancing Safety & Project Economics

Abstract

Abstract The oil and gas industry in the Asia Pacific region has matured, and the number of aging offshore facilities is increasing. Changes in reservoir conditions and enhanced oil recovery technologies result in more hydrocarbons available than originally anticipated. Further, new discoveries in more remote or deepwater areas are often developed and tied into existing infrastructures as subsea tiebacks. These trends result in a need to extend the life of the existing offshore installations and facilities beyond their original design life. The decision to extend the service life of an offshore asset is based on detailed technical analyses, assessing the status and the integrity of the structures, the equipment and systems combined with detailed economical evaluations of the required investment needed for upgrades and modifications. It is essential that these evaluations assures safe and reliable future operations of the assets, while at the same time provide sound project economics for the life extension period. DNV has for a number of years been a leading provider of technical life extension analyses and integrity management services, assessing structures, hulls of floating installations and platforms, mooring lines, pipelines, subsea equipment and well integrity. Together with the industry, DNV has further enhanced these life extension services by developing an integrated approach which combines the technical assessments with risk and reliability analysis into a Value Chain Assessment (VCA) which can be used to better evaluate the project economics related to a life extension project and provide decision support for assessing investments required for upgrades and modifications. This economic value chain model combines all the relevant cost elements into an economic lifecycle model, considering operational and maintenance costs, expected project revenue and capital investment costs required for any upgrades and modifications. This paper will, based on project experience, highlight key challenges and issues related to life extension of offshore installations and will demonstrate the benefits related to applying an integrated and more economic approach to life extension projects. Key technical challenges related to offshore life extension projects will be addressed and possible solutions presented.