Paul Jacob Bins introducing DecomPartners at Offshore Decommissioning 2017 (St. Andrews)
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Although decommissioning activity is increasing (esp. in UK) multi-operator campaigns remain scarce. This despite the fact that campaigning P&A is widely seen as the key driver of cost-savings... DecomPartners has developed a new innovative financing solution that address the problems that Operators face, when contemplating to join decom-campaigns with their competition!
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Paul Jacob Bins introducing DecomPartners at Offshore Decommissioning 2017 (St. Andrews)
- 1. Multi-Operator Campaigns– InnovativeFinancing toMove Collaborationforward Paul Jacob Bins Offshore Decommissioning 2017, St. Andrews
- 2. • Lower-cost, late-life operators pursuing MER enabled by NOC / IOC decom funding (which is a good thing…) • Current decom programs mostly: ‒ By larger, well-funded operators ‒ Addressing specific concerns • Multi-operator programs to achieve scale (where there isn’t) are scarce • Beating “Reverse drilling” culture requires repeated practice and perhaps a divorce… Starting the learning curve… …but with enough scale to achieve targets? SOURCE: DecomPartners
- 3. • Financial products for decom-funding • Solutions for ARO*- related write-offs • Similar technical compliance across Basin • Effective tax regimes for decom transfers (and deferral does not count) • Triggers for innovation • New decom-specific technologies • Lean, right-specced scope and execution • Complete integration into asset life-cycle ✓ ~ • Campaign-models for scale and better risk / reward allocation • Transparent, deep and competitive supplier markets • Confidentiality of proprietary financial data * Asset Retirement Obligation SOURCE: DecomPartners
- 4. • Operators secure funding with: ‒ Fixed price for ABEX ‒ Profiling of cash-flows ‒ Mitigation of write-offs** * Asset Retirement Obligation ** Subject to Operators’ independent auditor approval SOURCE: DecomPartners • Investors access growth-market with: ‒ Learning curve and campaign benefits ‒ High-yield return profile ‒ New asset class characteristics Operator funding: • ARO* • Tailored instruments Investors’ risked capital
- 5. • Confidentiality • Normalization of risk and costs across projects • Required disclosures (e.g.,ARO*) • Differences in well-integrity, P&A requirements and data availability Innovative financing: • Tender process • Risked capital Delivery partnership • P&A capability • Non-E&P capital project practices • Technical compliance and risk management • Fit-for-purpose setup without “reverse engineering” approach • Price certainty underwritten by Equity • “Put money where mouth is” • Performance drive through equity- return requirements * Asset Retirement Obligation SOURCE: DecomPartners
- 6. $ • Partnership to deliver decom best-practices • Campaign “prime contractor” of choice • Tax-optimized SPV’s for transfer to duty-holders • Alliance with global insurer • Influencer of Regulator & Treasury agendas • Establishment of new asset class • Specialist “latest-life” operators, served by dedicated suppliers • Multi-operator campaigns as the norm • Regulators drive MER and orchestrate Decom through tax-optimization and cross-border regulation • Equity investing in decommissioning supported by tailored Insurance products • Decom as an “inversely-correlated” E&P asset class – a high-growth export-product! SOURCE: DecomPartners