Decommissioning cost estimation in the deepwater U.S. Gulf of Mexico – Fixed platforms and compliant towers

• Gulf of Mexico deepwater fixed platform and compliant tower inventory reviewed.
• Gulf of Mexico decommissioning cost estimates performed per structure and operator.
• Bullwinkle's decommissioning cost estimated to be $265 million.
• Gulf of Mexico deepwater decommissioning category cost estimated at $2.4 billion.

Decommissioning is the final stage in the life cycle of an offshore structure, where all wells are plugged and abandoned, the platform and associated facilities are removed, and the seafloor cleared of all obstructions created by the operations. From 1989 to 2012, 15 structures in water depth greater than 400 ft were decommissioned in the U.S. Gulf of Mexico, but none of the project cost have been publicly released. The purpose of this paper is to apply work decomposition algorithms developed by ProServ Offshore to estimate cost for well plugging and abandonment, conductor severance and removal, pipeline abandonment, umbilical and flowline removal, and platform removal for the 53 deepwater fixed platforms and compliant towers in the Gulf of Mexico circa January 2013. Decommissioning cost estimates are presented by stage and operator. Bullwinkle and Pompano are expected to be the most expensive fixed platform decommissioning projects in the Gulf of Mexico estimated at $265 million and $203 million, respectively. Total undiscounted decommissioning liability for the asset class is estimated to be $2.4 billion.