One of the hot topics in the oil & gas industry is decommissioning, the vast amounts of old platforms, pipes and other installations and equipment that needs to be dealt with. A golden opportunity for many and a possible bottomless pit for others.
Initially expected to kick off for 2015, now more like 2018, maybe even later.
Forecasts of the business volumes are going wild and many market developers are drooling by the looks of them and so are their bosses. But the market is still in the powerpoint phase.
Service and construction companies in the peripheral of oil & gas see it as the replacement of revenues lost due to the downfall in the industry but the oil & gas producers are not eager to start while their income is at an all time low.
Massive vessels and scrapyards are built by the big players in the market and also many of the smaller companies see a change to get a share of this huge cake.
The owners of the installations are procrastinating to say the least and in the mean time looking for all possible ways to reduce the cost or even prevent scrapping at the scale originally foreseen.
As a garbage man I’m often asked about the waste aspects of decommissioning, the hazardous, mercury waste in particular.
Some players see enormous streams of hazardous waste containing mercury and other elements and are looking at setting up local treatment installations to deal with it.
As far as I’m concerned we don’t even know what the waste stream will look like. Although it would be great to receive massive amounts of cleaning waste at our plant I really don’t think it will happen. Nor do I see many local contenders in the decommissioning being successful in setting up and running treatment facilities.
Right now there are a handful of mercury waste treatment plants like Batrec in the world and they seem to be able to cope with the existing waste streams and they all will confirm that it’s not easy to run such an operation dealing with highly toxic waste.
I fear a lot of environmental issues if in 5 years from now we will have a handful of mercury waste facilities in every country with a serious oil & gas industry.
In the mean time the influential lobby of the oil & gas industry is using the delay to find support for other, cheaper options to deal with the installations up for decommissioning. Who can tell? We may end up with a lot of artificial reefs, fish farms, naval bases or lunar observatories to mention a few silly options.
In short, the industry knew that there would come a time to take their installations away and that they are dirty, but nobody expected the oil price to be this low as it is now when it’s time to pack up.
Not as many installations will be scrapped in the way we anticipate now and the waste streams are hard to predict in both volume and composition.
Looking at the number of companies that is after a share of the decommissioning market the competition will be very fierce and as a result the margins will be thin. Too many fishing in the same market that didn’t even kicked-off.