Parametric Study on the Elements of Cost Estimation for Offshore Platform Decommissioning

Decommissioning is the last stage in the life cycle of an offshore platform where wells
are plugged and abandoned, the structures removed and the seafloor cleared of any
debris resulting from the ongoing operations. This process calls for proper planning and
cost estimation in order to have successful projects carried out. This study aims at
identifying stage-specific assumptions in decommissioning cost estimation and also
develop a parametric cost model of parametric range estimating of decommissioning
costs using regression models, for early range estimation. To accomplish early cost
estimate, secondary data from Gulf of Mexico was used to develop rough regression
models that would be used to estimate decommissioning costs for well plugging and
abandonment, conductor removal, and structural removal. Results from the regression
analysis show that the regression models have a high ability to predict cost since the
adjusted R square is more than 50% which means a big percent of variability in
dependent variable is explained by the model. Moreover the average F-calculated
(137.092) of the 3 elements is higher than the F tabulated (3.49) which means the
models have a statistical significance and make a good prediction. Furthermore, the pvalues
are very low (<0.05) as the test for normality) which shows that the model
coefficients are significant and show correlation between independent variables. In
conclusion, these models will serve as a format to estimate cost before decommissioning
is carried out.