TSC enters offshore P&A and decommissioning market
Hong Kong-listed TSC Group, service provider of both onshore and offshore drilling, has ventured into the plug and abandonment (P&A) and decommissioning business via a joint venture.
TSC entered into an agreement with Offshore CC FZE to form a Singapore-incorporated joint venture named OIM for operations in Singapore, Norway and the UK.
The joint venture aims to provide cost effective and practical solutions for a growing demand for P&A operations on offshore oil wells and decommissioning platform removal.
“OIM’s unique value proposition will enable TSC to be well positioned to gain early access to the vast and fast growing market for P&A and decommissioning market,” TSC stated in an announcement to the stock exchange.
P&A is the process where an obsolete oil well in an unproductive and/or unprofitable oil reservoir is permanently sealed and environmental concerns over the oilfield is safeguarded. Decommissioning is the process where an offshore installation is removed to reinstate the sea environment.
TSC noted that the P&A and decommissioning market is “a more profitable segment of the oil and gas industry.”
The company observed that many wells and offshore platforms in the North Sea and other areas worldwide has entered late stages of their life span, pointing to an increasing need for P&A and decommissioning services over the next 20-30 years.
“Hundreds of fixed installations, subsea production systems, over 3,000 pipelines and approximately 5,000 wells, will all eventually reach their end-of-life,” TSC stated.
“It is estimated by the Oil & Gas Authority of the UK, the cost estimates for P&A and decommissioning in the UK sector alone will be approximately $63bn up to 2050. The cost for the P&A and decommissioning projects on the Norwegian Continental Shelf for the same period are estimated to $30bn.”
The joint venture OIM will be 70% held by TSC and 30% by Offshore CC FZE.
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