A 50:50 joint venture between Maersk Drilling and Maersk Supply Service is being formed to provide decommissioning services to offshore oil and gas operators.
Drawing on Maersk Drilling and Maersk Supply Service’s assets and technical capabilities, the joint venture will initially offer bundled solutions for up to 80% of the process required in decommissioning an oil field.
The bundled solutions will, in addition to project management, cover work scopes such as plug and abandonment of wells, towage of floating units and removal of subsea infrastructure. In the longer term, the JV plans to provide the full end-to-end process of decommissioning.
Maersk Supply Service chief executive Steen Karstensen said “By combining our marine knowledge and experience from recent decommissioning projects, we can provide oil and gas operators bundled solutions with one point of contact for most of the decommissioning work scope. With the experience and asset base brought to the JV by both companies, and the team to see it through, I am confident that the decommissioning JV can offer attractive and flexible solutions to the market.”
Maersk Drilling’s chief executive Jørn Madsen said “With the growing need for decommissioning mature fields, governments and oil and gas operators are looking for experienced partners to manage and perform this challenging task. By leveraging the strong track record of the two companies, as well as our complementary asset base and competencies, we can lower the risk and reduce the overall cost for the customers.”
Maersk Drilling and Maersk Supply Service have both done decommissioning work for various clients. Since 2016, Maersk Supply Service has been project managing and executing the full scope of decommissioning services for the Janice, James and Leadon subsea fields in the UK North Sea for the operator Total.
Maersk Drilling was responsible for plug and abandonment for the James and Leadon wells. Maersk Supply Service provided the marine asset coverage on all three subsea fields and took on the responsibility for the engineering, subcontractor management, offshore planning, interface management and associated logistics, as well as the disposal of recovered facilities from the seabed through management of waste disposal contractors.
Maersk Drilling and Maersk Supply Service will invest an equal amount in the JV over the coming year. The joint investment is approximately US$20M, covering the first years of operations. In addition, the JV partners will provide assets to the JV through standard commercial conditions. With the projection of adding up to three new projects per year after 2020, the JV expects its revenue to grow steadily over the first five years.
Lars Banke has been appointed chief executive of the JV and will join the company from Total in June 2018. He has a background in mechanical engineering from Denmark’s Technical University and has worked in various Maersk companies since 2001, most recently acting as site manager for the construction of the Ailsa FSO in Singapore, for the Culzean project.
Jens Klit Thomsen, currently head of decommissioning business development at Maersk Supply Service has been appointed chief commercial officer and Carsten Sander Jacobsen has been appointed chief technical officer.
The JV will not impact the ongoing work in AP Moller-Maersk to establish new ownership structures for each of the partner companies.