Attachment_2_Flowchart_Decision_Descriptions_1.docx

Appendix 2: BSEE Decommissioning Cost Estimating Flowchart Descriptions Well Decommissioning Cost Estimating Flowchart – Decision Descriptions

Is Wellbore Status Code Other Than PA, ST or CNL?

Below is a screenshot of a complete list of well status for BOREHOLE_STAT_CD. When BSEE Districts enter PA as the well BOREHOLE_STAT_CD for a particular well identified by a unique API Number, this cost estimating process assumes that particular well’s permanent plugging and site clearance decommissioning obligations have been completed. When BSEE Districts enters ST as the well BOREHOLE_STAT_CD, this cost estimating process assumes that the particular well completion has been plugged back and the decommissioning liability would be captured on the sidetrack well if it has not already been PA’d. When BSEE Districts enter CNL as the well BOREHOLE_STAT_CD, this cost estimating process assumes that the drilling application was canceled before the well was spudded. As of the drafting of this SOP, there are no well with BOREHOLE_STAT_CD in TIMS as VCW and CT. Therefore, if the BOREHOLE_STAT_CD is PA, ST or CNL, the decommissioning liability estimate is $0. For any other statuses, the decommissioning liability will be calculated according to the direction of the remaining of the flowchart.

Please note that in cases where there is a WAR or EOR that may indicate to the contrary of the BOREHOLE_STAT_CD, the decommissioning liability will be calculated using the status denoted in the BOREHOLE_STAT_CD until the BSEE Districts have changed the BOREHOLE_STAT_CD to reflect the activity of WARs or EORs. For instance, a well may have a COM status in the BOREHOLE_STAT_CD while a WAR or EOR may state that the well is PA and denoted it in the WELL_ACTIVITY_CD. The BSEE Districts still need to review and validate that the well is indeed PA’d to their satisfaction that the PA activity is compliant with regulations before they should denote the PA status in BOREHOLE_STAT_CD.

Is Well Decom Cost Externally Calculated?

There are instances where BSEE has agreed upon certain decommissioning cost estimates with companies that are different from the BSEE algorithm calculated cost estimates. To capture the agreed costs, this step was introduced to override the BSEE algorithm calculated costs. Ideally, these overridden cost estimates should have expiration dates and once they reach the expiration dates, the system should revert these costs back to the BSEE algorithm calculated cost estimates. The externally calculated well costs we have accepted so far after the August 2016 are from executed turnkey contract prices and bankruptcy related agreement prices. Therefore, the intent of the expiration date is to capture such contract and agreement end dates. But currently, the system is not capable of imposing expiration dates.

Additional to the above explanations, please refer to the explanations in this SOP under “Decom Cost Supplemental Tables.xlsx” item 3, ExtCalcWells, to understand more on how the cost estimates override process is integrated.

Does well have wet tree or dry tree?

Refer to the explanations in this SOP under “Decom Cost Supplemental Tables.xlsx” item 1, WellTrans, to understand how a “Deemed Tree Class” (Wet or Dry) is determined.

Is Water Depth Greater than 400 feet?

Use the water depth in TIMS under WATER_DEPTH which is the depth of the water at a well/platform location from the water level to the mud line.

Is Well COM status?

This decision step checks the borehole status in BOREHOLE_STAT_CD to see if the well is ‘COM’ which means the borehole is completed.

Is Host Structure Fixed or Floating?

Refer to the explanations in this SOP under “Decom Cost Supplemental Tables.xlsx” item 1, WellTrans, to understand how a “Deemed Host Structure Type” (Fixed or Float) is determined.

Is Well TA Status?

This decision step checks the borehole status in BOREHOLE_STAT_CD to see if the well is ‘TA’ which means the borehole is temporarily abandoned.

Is Well Damaged?

Wells topside located on destroyed platforms are more costly to decommission. It is more costly to cut through a mangled platform laying on seafloor and somehow tap into the well to perform decommissioning operation than to access the well from the well head on an upright platform. This step checks the well topside platform to see if it has been destroyed by checking the existence of DESTROYED_DATE and DESTROYED_REMARKS in Platform Structures TIMS table.

Is Water Depth is Less Than or Equal to 400feet?

Use the water depth in Boreholes TIMS table under WATER_DEPTH which is the depth of the water at a well/platform location from the water level to the mud line.

Is Wellbore Status Date Prior to 5-Apr-11?

Prior to August 2016, all wells other than PA, ST or CNL were estimated at the same decommissioning cost value at $150,000. During August 2016 global update process, a different decommissioning cost estimate was assigned to fully TA wells as opposed to COM wells. To determine if a well has been fully plugged which means a well has been permanently plugged with casing not cut, the SN_WELL_PLUG_TYPE was used namely the SCP (Surface Cement Plug) to differentiate wells with TA status that are not fully plugged than those that are fully plugged. Since the data element SN_WELL_PLUG_TYPE was created on April 5, 2011, this cost estimating process assumes that wells with TA status after April 5, 2011 and have a SCP are fully plugged. This cost estimating process also assumes that wells with TA status before April 5, 2011 are fully plugged due to BSEE Districts’ data input practice that TA was only used for fully TA wells before the SN_WELL_PLUG_TYPE data field was created.

Does Well Have SCP in Place?

This decision step checks the Well Plug Installation Info TIMS table to see if the well has a SCP.

Is This the Last of the Active Wells?

This decision step checks to see if all wells recorded in TIMS has been accounted for. Once all wells are accounted, this step will provide an exit to this process flow.

Structure/Facility Removal Cost Estimating Flowchart – Decision Descriptions Are there any “Active” structures?

This decision step checks to see if there are any active structures in TIMS before initiating this Structure/Facility Removal Cost Estimating process. This cost estimating process assumes that a platform structure identified by a complex ID and associated structure number is active when it is recorded in TIMS Platform Masters and Structures with an existence of an INSTALL_DATE and no REMOVAL_DATE. This cost estimating process assumes that when BSEE OSTS enters an installation date in the INSTALL_DATE field in TIMS Platform Structures table signifies that a platform structure was physically installed in the OCS. This cost estimating process further assumes that when BSEE OSTS enters a platform removal date in the REMOVAL_DATE field in TIMS Platform Structures table signifies that a platform structure was decommissioned thus fulfilling the platform decommissioning obligation.

Therefore, if there is a removal date in the REMOVAL_DATE field, the platform removal decommissioning liability estimate is $0.

Is Host Structure Fixed or Floating?

Below is a screenshot of a complete list of structure type for STRUC_TYPE_CODE. For this flowchart process, this cost estimating process assumes that CT, FPSO, MTLP, SEMI, SPAR, and TLP are floating structures and CAIS, FIXED, MOPU and WP are fixed structures. The decommissioning cost estimates for floating structures are calculated externally (not using the algorithms of this estimating process) at a one off basis. Please refer to the explanations in this SOP under “Decom Cost Supplemental Tables.xlsx” item 4, ExtCalcStruct, to understand more on how the externally calculated cost estimate override process is integrated.

This cost estimating process further assumes that SSANC, SSMNF, SSTMP, and UCOMP are subsea facilities. Currently, BSEE does not assess the decommissioning liability of subsea facilities. BSEE does not have a complete and consistent inventory of subsea facilities. Thus, an inventory of subsea facilities and a decommissioning estimating method are under development as this SOP is drafted.

Is Water Depth Greater than 400 feet?

Use the water depth in Platforms Masters TIMS table under WATER_DEPTH which is the depth of the water at a well/platform location from the water level to the mud line.

Is Structure Caisson/WP or Piled?

If the STRUC_TYPE_CODE has a designation of CIAS or WP and STRUC_SUB_TYPE_CD has a designation of CAS or B-CAS, then the structure is assumed to have similar decommissioning liabilities as caissons, thus the decommissioning liability is calculated as caissons. If the STRUC_TYPE_CODE has a designation of FIXED and STRUC_SUB_TYPE_CD has a designation of 10-P, 12-P, 4-P, 4-P SK, 6-P, 6-P SK, 8-P, 8-P SK, DK TOW, or TRI, then the structure is assumed to be the STRUC_TYPE_CODE designation. However, if the designation of STRUC_TYPE_CODE conflicts with the designation of STRUC_SUB_TYPE_CD, then refer to structure attachment data from structure permit application files and pictures to validate the most probable structure type or sub-type. For structures of ambiguous type/subtype and has no files on record, this cost estimating process assumes that the structure is a caisson/well protector for water depths of 100 feet or less and a 4-pile for water depths between 100 feet and 400 feet.

Additional to the above explanations, please refer to the explanations in this SOP under “Decom Cost Supplemental Tables.xlsx” item 2, StructTrans, to understand more on how a “Deemed Structure Type” is determined.

Is Structure a Three Pile or Tripod?

This decision step checks the STRUC_SUB_TYPE_CD to see if the structure is ‘TRI’. If it is, the structure is assumed to be a tripod structure and the decommissioning liability is calculated as a tripod. After the research described in the explanations under decision box “Is Structure/WP or Piled?” is performed, the most probable structure type assumption is recorded in the StructTrans table as the ‘Deemed Structure Type’.

Is Structure a Four Pile?

This decision step checks the STRUC_SUB_TYPE_CD to see if the structure is ‘4-P’ or ‘4-P SK’. If it is, the structure is assumed to be a four-pile structure and the decommissioning liability is calculated as a four pile. After the research described in the explanations under decision box “Is Structure/WP or Piled?” is performed, the most probable structure type assumption is recorded in the StructTrans table as the ‘Deemed Structure Type’.

Is Structure a Six Pile?

This decision step checks the STRUC_SUB_TYPE_CD to see if the structure is ‘6-P’ or ‘6-P SK’. If it is, the structure is assumed to be a six-pile structure and the decommissioning liability is calculated as a six pile. After the research described in the explanations under decision box “Is Structure/WP or Piled?” is performed, the most probable structure type assumption is recorded in the StructTrans table as the ‘Deemed Structure Type’.

Is Structure an Eight Pile?

This decision step checks the STRUC_SUB_TYPE_CD to see if the structure is ‘8-P’ or ‘8-P SK’. If it is, the structure is assumed to be an eight-pile structure and the decommissioning liability is calculated as an eight-pile. After the research described in the explanations under decision box “Is Structure/WP or Piled?” is performed, the most probable structure type assumption is recorded in the StructTrans table as the ‘Deemed Structure Type’.

Is Structure a Twelve Pile?

This decision step checks the STRUC_SUB_TYPE_CD to see if the structure is ‘12-P’. If it is, the structure is assumed to be a twelve-pile structure and the decommissioning liability is calculated as a twelve pile.

After the research described in the explanations under decision box “Is Structure/WP or Piled?” is performed, the most probable structure type assumption is recorded in the StructTrans table as the ‘Deemed Structure Type’.

Is Structure a Sixteen Pile?

After the research described in the explanations under decision box “Is Structure/WP or Piled?” is performed, if the most probable structure type assumption is a sixteen-pile structure, then the decommissioning liability is calculated as a sixteen pile. The most probable structure type assumption is recorded in the StructTrans table as the ‘Deemed Structure Type’.

Is Structure Destroyed?

Destroyed platforms are more costly to decommission. It is more costly to remove a platform from laying on the seafloor mangled than removing a platform standing upright. This step checks the platform to see if it has been destroyed by checking the existence of DESTROYED_DATE and DESTROYED_REMARKS in Platform Structures TIMS table.

Is This the Last of the Structures?

This decision step checks to see if all structures recorded in TIMS has been accounted for. Once all structures are accounted, this step will provide an exit to this process flow.

Site Clearance & Verification Cost Estimating Flowchart – Decision Descriptions Are there any outstanding platform site clearance activities?

This decision step checks to see if there are any active structures in TIMS before initiating this Site Clearance & Verification Cost Estimating process. Platform removed before 1990 are not required to verify that the site is clear of obstruction. Platforms removed after 1990 are required to verify that the sites are cleared of obstructions. For any platform removed after 1990, this cost estimating process assumes there is a decommissioning liability for platform site clearance and verification operation when no date is entered in the STE_CLRNCE_DATE field in TIMS Platform Site Clearance Application. This cost estimating process further assumes that the decommissioning liability for platform site clearance is $0 when BSEE OSTS inputs a date in the STE_CLRNCE_DATE field.

Is Structure in 20 feet of water of less?

Use the water depth in Platforms Masters TIMS table under WATER_DEPTH which is the depth of the water at a well/platform location from the water level to the mud line.

Is This a Destroyed Platform Site?

Destroyed platform site are more costly to clear. It is more costly to clear a destroyed platform site that has a more extensive debris field. This step checks the platform to see if it has been destroyed by checking the existence of DESTROYED_DATE and DESTROYED_REMARKS in Platform Structures TIMS table.

Is Structure in More Than 1,400 feet of water?

Use the water depth in Platforms Masters TIMS table under WATER_DEPTH which is the depth of the water at a well/platform location from the water level to the mud line.

Is Structure 21 ft < WD <= 400 ft of water?

Use the water depth in Platforms Masters TIMS table under WATER_DEPTH which is the depth of the water at a well/platform location from the water level to the mud line.

Is Structure a C/WP?

Please refer to the “Structure/Facility Removal Cost Estimating Flowchart – Decision Descriptions” decision step “Is Structure Caisson/WP or Piled?”. The regulation, 30 CFR 250 Subpart Q, requires a different site clearance trawling radius for single-well caisson, well protector jacket, template, or manifold as compared to conventional full size jacket type fixed platforms located in less than 300 feet water depth. Therefore, the decommissioning cost estimates for caissons/well protectors (C/WP) are calculated differently from conventional full size jacket type fixed platforms.

Is This the Last Outstanding Platform Site Clearance?

This decision step checks to see if all outstanding platform site clearance recorded in TIMS has been accounted for. Once all platforms still needed site clearance operations are accounted, this step will provide an exit to this process flow.

Pipeline Segment Decommissioning Cost Estimating Flowchart – Decision Descriptions Is This the First or Next Active/Proposed Segment?

This decision step checks to see if there are any active or proposed pipeline segments in TIMS before initiating this “Pipeline Segment Decommissioning Cost Estimating” process. Below is a screenshot of a complete list of pipeline status codes, STATUS_CODE, stored in TIMS Pipeline Masters table. When BSEE Pipeline Section enters ABN, REM, A/C, R/A, R/R or REM/ABD as the pipeline STATUS_CODE for a particular pipeline segment identified by a unique Pipeline Segment Number, this cost estimating process assumes that particular pipeline segment’s decommissioning obligation has been completed.

When BSEE Pipeline Section enters COMB, O/C, or R/C as the pipeline STATUS_CODE, this cost estimating process assumes that particular pipeline segment has been combined into another pipeline and the decommissioning liability would be captured on the other pipeline segment if it has not already been Abandoned or Removed (ABN/REM). When BSEE Pipeline Section enters CNCL as STATUS_CODE, this cost estimating process assumes that the pipeline installation application was canceled before the pipeline was installed. Therefore, if the pipeline STATUS_CODE is ABN, REM, A/C, R/A, R/R, REM/ABD, COMB, O/C, R/C, or CNCL, the decommissioning liability estimate is $0. For any other statuses, the decommissioning liability will be calculated according to the direction of the remaining of the flowchart.

Is WD <= 300 feet?

This cost estimating process uses the Maximum Water Depth found in the MAX_WTR_DPTH data field in Pipeline Masters TIMS table which is the greatest vertical distance from mean sea level to the sea floor for the depth of the water at the deep end of the pipeline system. This cost estimating process assumes a different pipeline decommissioning cost estimation methodology is used for pipeline segments in water depths <= 300 feet than those in > 300 feet.

Is WD <= 150 ft?

This cost estimating process uses the Maximum Water Depth found in the MAX_WTR_DPTH data field in Pipeline Masters TIMS table which is the greatest vertical distance from mean sea level to the sea floor for the depth of the water at the deep end of the pipeline system. This cost estimating process assumes a different pipeline decommissioning cost estimation methodology is used for pipeline segments in water depths <= 300 feet than those in > 300 feet. Although similar decommissioning calculation analysis and methodology are used for pipeline segments located in <= 300 feet, the decommissioning cost estimate defines further for pipelines located in <= 150 feet of water depth and those located between 150 feet and 300 feet of water depth.

Is Segment Status PROP?

This cost estimating process calculates the decommissioning liability of proposed pipeline segments as well as existing pipeline segments. Proposed pipeline segments are identified as “PROP” pipeline status codes, STATUS_CODE, stored in TIMS Pipeline Masters table. The decommissioning liability of proposed pipeline segments are recorded separately from existing pipeline segments so as to differentiate the soon to be or proposed liability from the physical existing pipeline decommissioning liability.

Is the Segment Location a Consideration Regarding Sedimentary Resource Areas or Navigation Fairways?

Recent decommissioning practice or policy requires pipeline segments located in designated Sedimentary Resource Areas or Navigation Fairways to be removed instead of decommissioned in place.

This cost estimating process assumes the decommissioning liability cost estimate for pipeline segments located outside of Sedimentary Resource Area or Navigation Fairways to be that of decommissioning in place. Ideally, for pipeline segments or portions of segments located inside of Significant Sediment Resource area/blocks or Navigation Fairways, this cost estimating process should assume the cost of decommissioned by removal. However, due to BSEE’s lack of sufficient pipeline removal cost data, the estimates for pipeline segments that must be removed, will be estimated using the “binary method” (based on engineering cost estimating methodology) instead of the regression-based methods (statistical analysis of historical actual pipeline decommissioned in place cost data) that otherwise would be appropriate. The cost estimates obtained from the binary method are generally higher than the cost estimates done by the regression analysis method for pipeline segments located in 300 feet of water or less.

Additional to the above explanations, please refer to the explanations in this SOP under “Decom Cost Supplemental Tables.xlsx” item 6, SSFwy, to understand more on how a pipeline is determined to be in Significant Sediment Resource area/blocks or Navigation Fairways.

This cost estimating process use the Maximum Water Depth found in the MAX_WTR_DPTH data field in Pipeline Masters TIMS table which is the greatest vertical distance from mean sea level to the sea floor for the depth of the water at the deep end of the pipeline system. For pipeline segments in < 300 feet of water depth and located inside the Significant Sediment Resource area/blocks or Navigation Fairways, his cost estimating process assumes the liability cost estimates calculated by the binary method. Water depth is one of the variables for binary method calculation. The decommissioning cost estimates are different for the 50 feet, 100 feet, 150 feet, 400 feet, and greater than 500 feet increments. For pipelines segments > 300 feet, this cost estimating process assumes the cost estimates calculated by the binary method only.

Is Segment “Near” to Shore Based Infrastructure?

The binary method decommissioning cost estimate assumes the decommissioning cost is different depending on the distance from the pipeline segment to Shore Based Instructure. The difference is captured by either ‘far’ or ‘near’. Whether a pipeline is designated as ‘far’ or ‘near’ depends on the Area that the pipeline is located in.

Additional to the above explanations, please refer to the explanations in this SOP under “Decom Cost Supplemental Tables.xlsx” item 7, Proximity, to understand more on how the proximity to shore based infrastructure is incorporated in this cost estimation system.

Is Segment Length Less Than or Equal to 15,000 feet?

The binary decommissioning cost estimate method assumes the decommissioning cost is different depending on the total length of the pipeline segment. For the segments < 15,000 feet, it assumes one set of cost estimating equations. For segments > 15,000 feet, it assumes another set of cost estimating equations. This cost estimating process uses the Federal Segment Length in the SEG_LENGTH data field in Pipeline Masters TIMS table which is the length, in feet, of the Federal portion of the pipeline segment.

Is Segment Diameter Less Than or Equal to Nine Inches?

The binary decommissioning cost estimate method assumes the decommissioning cost is different depending on the diameter of the pipeline segment. For the segments < 9 inches, it assumes one set of cost estimating equations. For segments > 9 inches, it assumes another set of cost estimating equations. This cost estimating process uses the Size Code in the PPL_SIZE_CODE data field in Pipeline Masters TIMS table which is an indicator of the outside diameter of the pipeline.

Is This the Last of the Segments?

This decision step checks to see if all outstanding proposed and existing pipeline segments recorded in TIMS has been accounted for. Once all pipeline segments are accounted, this step will provide an exit to this process flow.

Proposed Well Decommissioning Cost Estimating Flowchart – Decision Descriptions

The Proposed Well Decommissioning Cost Estimating Flowchart is the same as the existing Well Decommissioning Cost Estimating Flowchart except the background well data is drawn from eWell as oppose to TIMS.

Proposed Structure/Facility Removal Cost Estimating Flowchart – Decision Descriptions

The Proposed Structure/Facility Removal Cost Estimating Flowchart is the same as the existing Proposed Structure/Facility Removal Cost Estimating Flowchart except the background structure data is drawn from TIMS Platform Permits as opposed to TIMS.

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