Solution

Cessation of Production Strategy

Cessation of Production Strategy

Unlocking Clarity in Decommissioning Decisions
Unlocking Clarity in Decommissioning Decisions
Screenshot of computer simulation
Screenshot of computer simulation

Balancing life-cycle value and cost trade-offs with transparent, scenario-based planning for plug and abandonment.

Client(s)

CNOOC

Sector

Oil & Gas

Challenge

Decommissioning

Decision lens

Activity Planning

Product

-

Geography

Europe

The challenge

The challenge

On one of its North Sea platforms, CNOOC UK faced a strategic deadlock over plug and abandonment (P&A) activities.


Different teams had conflicting priorities:


  • Decommissioning wanted to start early using the platform rig.

  • Development preferred to drill and work over more wells.

  • Operations sought to minimise disruption to ongoing maintenance.

  • Management aimed to control overall spend, preserve value, and resolve accounting treatment of pre-Cessation of Production (CoP) abandonment costs.


At the same time, uncertainty over oil price, production decline, timing of cessation of production (CoP), and potential tax changes made it even harder to agree on a strategy. The result was gridlock: no clear path forward on when and how to start P&A.

On one of its North Sea platforms, CNOOC UK faced a strategic deadlock over plug and abandonment (P&A) activities.


Different teams had conflicting priorities:


  • Decommissioning wanted to start early using the platform rig.

  • Development preferred to drill and work over more wells.

  • Operations sought to minimise disruption to ongoing maintenance.

  • Management aimed to control overall spend, preserve value, and resolve accounting treatment of pre-Cessation of Production (CoP) abandonment costs.


At the same time, uncertainty over oil price, production decline, timing of cessation of production (CoP), and potential tax changes made it even harder to agree on a strategy. The result was gridlock: no clear path forward on when and how to start P&A.

Solution

Dashboard with controls for oil and gas project scenarios. Charts show cost versus net present value, cumulative cash flow over time with peak in 2028, and a timeline of well operations from 2024 to 2029.
Dashboard with controls for oil and gas project scenarios. Charts show cost versus net present value, cumulative cash flow over time with peak in 2028, and a timeline of well operations from 2024 to 2029.
Dashboard with controls for oil and gas project scenarios. Charts show cost versus net present value, cumulative cash flow over time with peak in 2028, and a timeline of well operations from 2024 to 2029.

We developed an AI-assisted P&A planning tool that optimises start time and sequence for every scenario. Using AI-assistance and a detailed economic model (covering capital, operating, and abandonment costs and tax treatment), the tool explored the trade-offs between maximising value and minimising cost.


The platform made scenarios transparent and consistent: start early → lower cost, start late → higher value. In all cases, the AI ensured unbiased comparison by applying the same operational and financial rules.


The interactive interface gave CNOOC a clear view of options: stacked production and cost charts, P&A sequences, slot overviews, and value vs. cost scatter plots. Operational constraints - such as not being able to P&A adjacent slots consecutively - were also factored in.


This allowed management to move from conflicting opinions to fact-based choices, with clear visibility of trade-offs.

Results

Decision clarity

confirmed that starting P&A before CoP was consistently advantageous.

Cost vs. value trade-offs

identified scenarios where costs could be reduced by ~£40m for <£10m impact on lifecycle value.

Actionable guidance

a clear path to resource the P&A team, enabling an earlier start while preserving long-term value.

Results

Decision clarity

confirmed that starting P&A before CoP was consistently advantageous.

Cost vs. value trade-offs

identified scenarios where costs could be reduced by ~£40m for <£10m impact on lifecycle value.

Actionable guidance

a clear path to resource the P&A team, enabling an earlier start while preserving long-term value.

Results

Decision clarity

confirmed that starting P&A before CoP was consistently advantageous.

Cost vs. value trade-offs

identified scenarios where costs could be reduced by ~£40m for <£10m impact on lifecycle value.

Actionable guidance

a clear path to resource the P&A team, enabling an earlier start while preserving long-term value.

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Want to learn more about this solution? Get in touch and ask for a demo.

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Want to learn more about this solution? Get in touch and ask for a demo.

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