Murchison Topsides Removal CNR International UK Limited and Heerema Marine

Contractors Nederland SE and AF Decom Offshore

UK Limited as a Consortium

Presented by: Donald Martin, Jan Gravekamp & Ricky Ryttmar

Date: 16th November 2016

Agenda

Project starting conditions – DM

Consortium contracting model – DM

Project results from CNR International perspective – DM

The basis of success – flexibility in method – JG

The basis of success – flexibility in schedule - JG

The basis of success – project organisation - RR

The basis of success – collaboration, trust and fun – RR

Project results from HAF Consortium perspective – RR

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Project starting conditions

33 Wells plugged & abandoned from topsides 33 Conductors and 66 casings strings recovered 1 subsea well isolated Oil export line decommissioned Fuel gas import/ export decommissioned Topsides production & process systems EDC Platform globally isolated and down manned

Consortium contracting model

Vehicles for collaboration – corporate and contractual,

Needs to be able to provide effective control and governance

of a broad range of project activities,

Opportunity for the suppliers to access emerging decom

markets,

Provides the customer access to complementary

technologies, assets and core competencies

Risk limitation/ sharing

Cost sharing/ reduction

Compliance with local regulatory requirements

“A consortium is an association of two or more organizations with

the objective of participating in a common activity or pooling their

resources for achieving a common goal”.

Contract mechanics

Key clauses CNRI HAF Consortium

1 Scope of work Outcome based framework of what needs to be done. How - Determines removal methods and which party executes the

scope of work split within the consortium.

2 Reimbursement Objective is cost efficiency and predictability. Objective is a fair profit margin.

Lump sum - broken down in within the consortium in accordance of the scope of work split.

3 Schedule of key

dates

Flexible 4 year removal window 2016 - 2020 inclusive.

CNRI had the right to select start date in either 2016 or

2017.

Consortium have the right to change the programme of work within

the 5 year window .

4 Asset handover /

ownership status

Handover Murchison in a safe, known and documented

condition.

Consortium ensure ongoing integrity throughout removal phases.

Title of the facilities transferred to the consortium once offloaded

onshore.

5 Safety

management

systems

Retain status as duty holder and prepare dismantling

safety cases.

Provide a safe system of work tailored to decommissioning and

deconstruction work.

Risk sharing

Key issues Approach CNRI Approach HAF Consortium

1 Major incident during removal

operations

CNRI provision of decommissioning all

risks insurance policy.

2 Waiting on weather Weather risk accepted by the consortium and included in

lump sums.

3 Limitation of liability - Damage to

assets

CNRI indemnify the consortium against

damage to 3rd party assets.

Knock-for-knock on asset and equipment spreads.

4 Delays during preparations,

offloading and logistics at the

offloading/ dismantling site.

Transfer risk through packaging of

offloading and disposal within the removals

contract

Consortiums obligation to managing the interfaces

between site preparations, offloading, quayside logistics,

vessel movements and clashes with other projects.

5 Accuracy and reliability of company

provided information.

CNRI accept the accuracy of information

represented to the consortium.

Consortium perform data collection and validation as

part of the work.

6 Failure to execute/ perform the work Termination fee Parent company guarantee

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0 - LTIs

1 - RWC

2 - MTC’s

6 - FAC’s

Project results from CNRI perspective

Environmental Performance

- No environmental incidents

- Targeting >97% reuse & recycle

to disposal ratio

Project results from CNRI perspective

Project results from CNRI perspective – 2011 plan

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2011 2012 2010 2013 2014 2015 2016 2017 2018 2019

Desc

Specify

Well P&A Select

Eval

2020

Facilities

Decom

Desc

Select

DSC –

Aug 29 DSC – Feb 13 Eval

Design

Select

RSC Eval RSC – Jul 13

Desc

Construct – P&A

Construct – DSC

Construct – Detailed Eng Construct – Offshore Execution

Infrastructure

removal

Desc Select

SSC Eval SSC – Jan 14 Construct – Detailed Eng Construct – Offshore Execution

Subsea Removals

Project results from CNRI perspective – 2016 actuals

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2011 2012 2010 2013 2014 2015 2016 2017 2018 2019

Desc

Specify

Well P&A Select

Eval

2020

Facilities

Decom

Desc

Select

DSC –

Aug 29 DSC – Feb 13 Eval

Design

Select

RSC Eval RSC – Jul 13

Desc

Construct – P&A

Construct – DSC

Construct – Detailed Eng Construct – Offshore Execution

Infrastructure

removal

Desc Select

SSC Eval SSC – Jan 14 Construct – Detailed Eng Construct – Offshore Execution

Subsea Removals

Project results from CNRI perspective – 2016 actuals

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2011 2012 2010 2013 2014 2015 2016 2017 2018 2019

Desc

Specify

Well P&A Select

Eval

2020

Facilities

Decom

Desc

Select

DSC –

Aug 29 DSC – Feb 13 Eval

Design

Select

RSC Eval RSC – Jul 13

Desc

Construct – P&A

Construct – DSC

Construct – Detailed Eng Construct – Offshore Execution

Infrastructure

removal

Desc Select

SSC Eval SSC – Jan 14 Construct – Detailed Eng Construct – Offshore Execution

Subsea Removals

The Right Scope: Studies

feeding into EIA, DP and

project contracts

Minimise OPEX

from CoP to Idle

Minimise CAPEX

through flexible

removal windows

Cost Performance

• Current overall project EFC is 10% lower than approved sanction budget

• VORs in the consortium removals contract <0.16% of lump sums

• Key learnings from Murchison inform CNRI that can reasonably anticipate 30% -

50% overall efficiencies on future decommissioning programmes

Project results from CNRI perspective

“ I may say that this is the greatest factor: the way in which the

expedition is equipped, the way in which every difficulty is foreseen,

and precautions for taken for meeting or avoiding it. Victory awaits him

who has everything in order, luck, people call it. Defeat is certain for

him who has neglected to take the necessary precautions in time, this

is called bad luck.”

Roald Amundsen (1912)

Flexibility

Flexibility through collaborative contracting

The contract is the best servant and worst master of a major project

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Navigation through uncertainty

Difficult to define / price

Change over time (technology/ policy)

Require innovative solutions and

creative management

Numerous complex risks

Alignment of risks and interests

Collective ownership of opportunity/

risks

Collective responsibility for delivery

Equitable sharing in ratios of gain/ pain

Cost reduction/ fair margin

Topsides: Hybrid Removal

Hook-down, Preps and intermediate piece small by

AFDO

2 ea. HLV Campaigns for reverse Installation by

HMC

Topsides: Full Reversed Installation Removal

Piece small Modules become Reversed Installation

modules i.e. removed as installed

No preparations for removal from platform

All HD incl. equipment from vessel by consortium

Transportation of modules on SSCV

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From Hybrid to full Reverse Installation

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- ~24,500mt Topsides in 26 lifts

- SSCV Thialf 4 trips to Vats

- SSCV Hermod 1 trip to Vats

- Preparatory work for lifting from SSCV

o Topsides splicing work

o Lift point installation as required

o Rigging Installation

Scope 2016

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Right to defer

Exercised March 2015

Tender work

Hermod-Thialf change

06 June 1016

RSC CONTRACT September 2014

FULL RI

PROPOSED

MAY 2015

FULL RI AMENDED JUNE 2015

FULL RI

ONE CAMPAIGN

PROPOSED

NOVEMBER 2015

FULL RI

ONE CAMPAIGN

AGREED

DECEMBER 2015

MOBILISATION 18 JUNE 2016

Offshore Completion

27 August 2016

Flexibility

Integrated Offshore Planning

- Full Integrated schedule

- Each job card planned in detail on manpower level

- MSO

- NDT

- RAT

- Scaffolding

- Fitting and Welding

- Asbestos (where applicable)

- Splicing (cutting cable trays, power cables, piping)

Used Offshore for monitoring progress

Offshore Planning, Offshore

Daily Progressed S-Curve and 4 day look ahead

PTW System

• E-vision Used

• No work on platform w/o permit

• Identified hazards and controls on permit

• Dedicated PTW controller

• Planning meeting to determine Permits

• PTW meeting to request for and activate permits

All presented this presentation is subject to detailed engineering

Tools to be predictable:

- Thorough platform inspections and engineering

- Well prepared job cards

- Well prepared plan to the greatest detail

- Well prepared plan regarding logistics

- All procedures in place to anticipate on unknowns e.g. asbestos, Norm etc.

- Planner o/b to allow to change the planning

- Experienced personnel

- Crane o/b the platform

- Tailor made Safe Systems of Work (SHE Management Interface Document)

Predictability

Company :

Consortium EPRD :

Subcontractors :

Main Parties Involved

The Basis of Success – Project Organisation

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The Basis of Success – Cooperation, Trust and Fun

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Cooperation, Trust and Fun – Cont’

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Project Results from a HAF Perspective

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0 LTI Total duration Topside campaign:

81 days

Project Results from a HAF Perspective Continued

Demonstrated flexibility to in order to de-risk CNRI’s completion schedule for plugging wells

- Maximise and utilize own resources

- SSCV Hermod and Thialf

- AF Environmental Base Vats

- Engineering resources

By doing so HAF demonstrated flexibility and cooperation to maximize project outcome

- Between Consortium partners

- Between Consortium and Company

Because of the above, HAF maintained and improved on the Contract program;

- Safeguard Schedule

- Safeguard Budget and Cost

- Safeguard Margins

Matured cooperation beween consortium partners, both onshore and offshore – forms good

basis for further cooperation.

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To be continued….