The club concept is designed to tackle costly and complex late-life activity via what the company claims is a new approach. Operators that choose to join the P&A club can spread the risk and cost of P&A of their wells with other members, applying economies of scale to safely remove hundreds of wells rather than focusing on individual wells, or a smaller number of wells.
This approach could potentially cut costs by 35% or more, Well-Safe says, by leveraging campaign-based savings, not only for small well counts, but also by spreading spending.
It provides flexibility to phase abandonment expenditure through the club’s work program to maximize knowledge capture and management from a multi-operator well campaign approach, the company adds, also providing cost certainty, while minimizing risk and non-productive time.
The five clubs will focus on onshore wells using a land rig, and offshore wells using jackups, semisubmersibles, a well intervention vessel (category 1 and 2 wells) and a deepwater asset.
Well-Safe founder and executive director, Mark Patterson, said: “Using the P&A Club model… operators will have cost certainty because we will be able to agree a fixed target cost per well.
“This will be based on well specifics rather than generic well categories and will be delivered by our dedicated P&A assets facilitated using standard terms and conditions across multiple well operations.
“If the well P&A work comes in under budget, then the savings will be redistributed among members of the club and various suppliers and contractors.”
Under long-term multi-year contracts, delivered by Well-Safe’s rigs and assets, with agreed inflationary linked increases, subscribers to the club will be guaranteed long-term fixed rates over a 10- to 15-year period.
In addition, the Club can introduce insurance cover to subscribers through insurance schemes tailored to cover cost over-runs, perpetuity and liability of field once complete.
Project funding is also available and can be linked to decommissioning tax relief payments.”