Heerema-AF Gruppen Consortium Murchison

6 November 2014, Leiden

The Heerema-AF Consortium – comprising Heerema Marine Contractors Nederland SE and AF Decom Offshore U.K. Limited (AF Gruppen ASA’s (AFG) wholly owned subsidiary) - has signed a contract with CNR International (U.K) Limited (CNRI) for the removal and disposal of the North Sea installation.

The Murchison oil field straddles the UK/Norway median line, with the platform located east of the Shetland Islands on the UK Continental Shelf. Murchison, one of the largest steel jacket platforms in the North Sea, was installed in 1980 and finally ceased production in February 2014.

The award covers a major contract for engineering, preparation, removal and disposal (EPRD) of both the topsides and jacket structure – with a total weight of approximately 37,000 tonnes. The contract assumes commencement of the engineering work in 2014. Offshore work will commence in early 2016 with the removal and final disposal work continuing until 2020.

The Heerema-AF Consortium has succeeded in developing an innovative hybrid removal methodology consisting of piece-small removal and heavy lift reverse installation.  As a result, Murchison will now remain manned for an additional year to support the consortium’s offshore deconstruction and removal activities, together with all the associated services such as accommodation, logistics, operations and maintenance.

The planned hybrid removal method allows the efficient disposal and recycling of the platform, combining short sailing times for the piece-small tonnage (approximately 10,000 tonnes) to a UK disposal yard and direct offloading for the remainder from Heerema’s heavy lift vessel at AF Environmental Base Vats.

This contract award is testimony to many years of successful co-operation between Heerema and AF Gruppen in North Sea decommissioning projects, where together they have demonstrated an excellent safety record, technical performance and predictable execution.

Pål Egil Rønn, CEO of AF Gruppen, said: “We are very pleased with this award, an important assignment for AF Gruppen. After more than ten years of successful cooperation with Heerema in decommissioning projects in the Norwegian sector of the North Sea, we consider this contract as a major step in entering the British decommissioning market. The contract will strengthen AF Gruppen’s position as the leading decommissioning company in the North Sea.”

Jan Pieter Klaver, CEO of Heerema Marine Contractors, added: “This is a very important award to Heerema Marine Contractors.  It underlines our continuing commitment to the offshore decommissioning market and re-confirms our ability, together with our partner AF Gruppen, to offer robust, competitive turn-key EPRD solutions to our customers. We are looking forward to a successful and enjoyable co-operation with CNR and AF Gruppen.”

CNRI became operator of Murchison in 2002, implementing an intensive and comprehensive programme of asset integrity management, reservoir management, well repair and infill drilling, which saw the company extend the life of the field by 10 years, delivering in excess of 22 million barrels during this period.

CNRI’s decommissioning project manager Roy Aspden said: “I’m excited by the combination of world class skills brought by Heerema AF consortium to deliver safe, efficient removal and disposal of the Murchison facilities.”

The field was discovered in July 1975 and, at the height of its production, peak oil of 150,383 bopd was achieved on December 26, 1982. Over its life, the Murchison field has produced around 400 million barrels, representing a recovery factor of over 50%.