Demolition of the Steel Titans

Since dumping in the North Sea became illegal, most owners of oil and gas platforms have opted for the demolition route. However, as this article reveals, some of them got a lot more than they bargained for.

By Lydia Heida

In 1995, Shell and Greenpeace became embroiled in a battle over the fate of the Brent Spar, an oil storage buoy that had seen better days. The owner Shell had intended to sink the buoy at sea along with all its pollutants – such as oil residues, mercury, sulphur and radioactive scale – still in the tanks.

Nowadays, the Brent Spar, or what’s left of it, is leading a peaceful existence as the foundation of a ferry pier in a small Norwegian town. Over 80% of the former platform has been put to this purpose; other parts, including the crew quarters and the helicopter deck, were dispatched to the scrap heap or disposed of as chemical waste.

This represented a mammoth feat because the Brent Spar had developed a couple of huge cracks that could have caused the whole structure to fall apart during demolition.

To prevent this, the Anglo-Norwegian consortium Wood/GMC designed a special lift to pull the oil tank vertically out of the sea, leaving the cleaners and the welders to get on with their jobs. The total cost of the project was approximately € 58 million/US$ 74 million.

Off-the-wall ideas

With a bill of that size, it became immediately clear that the demolition of these types of platform was going to be a pretty costly exercise at a time when dumping at sea was regarded as a heinous crime. This was bad news for the oil and gas corporations and so they went in search of a better – and preferably cheaper – solution to the problem.

Over the years, the most off-the-wall ideas have been put forward for re-using discarded oil and gas platforms, including converting them into nomadic dwellings or prisons.

Demolition has been the preferred option for most platform owners, but some experts see this as ‘pure waste of capital’.

One environmentally-friendly suggestion was to use them as a base for wind turbines. Some companies tried to sell them on to other oil or gas corporations.

But, so far, demolition has been the preferred option for most platform owners. ‘Pure waste of capital,’ says Fred Bok, a Director of Tamalone which is trying to sell platforms to China.

‘It’s much better to pick that thing up and deposit it somewhere else in the world. Demolition is the easy option, of course. It’s the quickest way to stop people grousing.’

Last drop of oil

To facilitate re-sale, specialist consultant and project manager Platform Brokers built a website for potential buyers and sellers. This featured detailed information on the platforms for sale, as well as pictures. Industrialists could tell at a glance if one was available to suit their needs. However, there was very little interest from the oil and gas corporations.

Around the same time, Platform Brokers was running a publicity campaign to find a new owner for the Frøy platform, which had been built at a cost of Euro 115 million/US$ 147 million.

Two oil companies expressed an interest but wanted to use the platform for production purposes before it could be released. Still in excellent working order, Frøy ended up on the scrap heap whereas, according to Sterker, it still had a life expectancy of at least 25 years.

At present, there is no pressing need to decide what to do with discarded platforms as they are likely to be dismantled much later than anticipated. Consistently high oil and gas prices, coupled with improved extraction technologies, mean that every last drop of oil or bubble of gas is being squeezed from the fields.

Tonnes of steel

Even so, a couple of projects have floated to the surface, including one involving the large Esso Odin platform. The Norwegian company Saipem removed this 15 300-tonne steel colossus from the North Sea in 1997.

A year earlier, Saipem had started dismantling the multi-platform Frigg field as part of a contract with an estimated value of Euro 400 million.

Dismantling the multi-platform Frigg field costs around Euro 400 million, and removal of the larger Ekofisk field is taking shape.

The removal of the even larger Ekofisk field is also starting to take shape. The owner, Conoco Phillips, selected Norwegian demolition firm AF Decom AS to remove the production component of the oil storage tanks.

Meanwhile, Dutch company Heerema has been hired to remove and demolish the first series of smaller platforms which alone comprise some 12 000 tonnes of steel.

It is hardly surprising that Platform Brokers is focusing on platform demolition, but in the capacity of consultant or of project manager. Its expertise is delivered by employees such as Thor Sterker who has worked for many years as a Field Engineer for Heerema.

Hugh marine cranes

In recent years, Platform Brokers has been working on the removal of six NSR platforms and one oil platform (the P15/b) from the North Sea. ‘We take care of everything for the customer: from the first cost estimates to closing the books.’

‘That is also the moment when the platform owner is relieved of all liability,’ explains Mr Sterker. But even though projects are assessed down to the very last detail, things invariably go wrong in practice.

For example, the platforms are so enormous that removed parts have to be transported by huge marine cranes; however, the cranes themselves are so large and lie so far below the waterline that they can only be used in the harbours of Norway or Rotterdam.

Trans-Frontier Shipment of Waste legislation comes into play when platforms are removed from the British part of the North Sea. To obtain an export licence, it is necessary to explain your plans in detail and to state the exact nature and extent of contamination.

No-one would question the relevance of this legislation, but enforcement often turns out to be a problem for companies. Form-filling is ‘a somewhat laborious process’, according to Mr Sterker, because no-one thought about the dimensions of oil and gas platforms when this law was passed.

Losing your licence

For Mr Sterker, paperwork isn’t the main problem. He elaborates: ‘The English Department of the Environment interprets this law slightly differently from the Scots. So, it isn’t clear who has to sign for what. And when the stuff arrives in Rotterdam, there’s a good chance you’ll face the same problem all over again.’

This huge muddle created countless problems with regard to the demolition of the NSR platforms. ‘Eventually, the English Department of the Environment came to the conclusion that it was not empowered to issue an export licence,’ he recalls.

‘Environmental legislation is like a “bureaucratic dragon” and even more stringent paperwork checks are expected in the future.’

‘There was a gap in the law, which has since been repaired. We had to transfer the parts of the platform onto small barges as these were actually allowed to sail into English ports. The demolition cost a lot more time and money as a result.’

Mr Sterker describes this environmental legislation as a ‘bureaucratic dragon’ and expects even more stringent paperwork checks in the future. ‘And that’s where our expertise comes in,’ he says.

‘We have worked out how the legislation fits together on this point. We had to, because in England you can face two years in prison if you break these rules. Or you lose your demolition licence. And that’s the worst thing that can happen if you’re in the demolition or recycling business.’