Well site security costs

Steve Robertson, Douglas-Westwood London, explores the importance of taking security costs into account.

“Energy security” is a term usually associated with security of supply and national self-sufficiency or at least the desire to minimise dependence on hydrocarbon imports. Yet around the world both E&P operators and oilfield service firms struggle with ‘energy security’ at a more basic level – the security of their staff and operations.

In the headlines this month is the on-going reaction to Greenpeace’s actions in the Arctic, a dangerous place for marine operations and a logistical challenge at the best of times. Neither Gazprom nor the Russian authorities have divulged specifics on the cost of the security operations at the Prirazlomnaya platform or indeed any impact on the timing of the already-delayed development in the Pechora sea.

In the UK, it has been reported that the cost of policing the protests at Cuadrilla’s drilling site at Balcombe are £4 million, about US$ 6 million dollars. To put this in perspective, DW has worked extensively with land-drilling and oilfield service companies in Iraq over the last five years and analysis of well costs indicates that the security (for the rig site and camp) averages around US$ 300 000 per well – i.e. one 20^th of the Balcome operation!

With the current focus on shale gas extraction and emerging offshore hydrocarbon provinces (e.g. East Africa) it seems that onshore ‘NIMBY-ism’ and offshore marine security will continue to be an expensive headache for the energy business. How many expensive headaches can the energy business afford?

Adapted from a press release by David Bizley

Read the article online at: https://www.oilfieldtechnology.com/exploration/21102013/well_site_security_costs/