Maersk Drilling and Maersk Supply Service have established a 50:50 joint venture (JV) to provide decommissioning services to oil and gas operators.
Due to high demand for decommissioning, especially in the North Sea where more than 400 fields are expected to cease production by 2026, the JV will offer bundled solutions for up to 80% of the process required in decommissioning an oil field.
The bundled solutions will, in addition to project management, cover work scopes such as plug and abandonment of wells, towage of floating units and removal of subsea infrastructure. In the longer term, the JV plans to provide the full end-to-end process of decommissioning, Maersk noted.
“With the growing need for decommissioning mature fields, governments and oil and gas operators are looking for experienced partners to manage and perform this challenging task. By leveraging the strong track record of the two companies, as well as our complementary asset base and competencies, we can lower the risk and reduce the overall cost for the customers,” said Jørn Madsen, CEO of Maersk Drilling.
“By combining our marine knowledge and experience from recent decommissioning projects, we can provide oil and gas operators bundled solutions with one point of contact for the majority of decommissioning work scope. With the experience and asset base brought to the JV by both companies, and the team to see it through, I am confident that the decommissioning JV can offer attractive and flexible solutions to the market,” added Steen S. Karstensen, CEO of Maersk Supply Service.
Maersk Drilling and Maersk Supply Service will invest an equal amount in the JV over the coming year. The joint investment is approximately USD 20 million covering the first years of operations.
In addition, the JV partners will provide assets to the JV through standard commercial conditions. With the projection of adding up to three new projects per year after 2020, the JV’s revenue is expected to grow steadily over the first five years.
The JV will be headquartered at the Maersk Drilling and Maersk Supply Service joint headquarters in Lyngby, Denmark.
Lars Banke has been appointed chief executive officer of the JV and will join the company from Total in June 2018. Lars has a background in mechanical engineering from Denmark’s Technical University and has worked in various Maersk companies since 2001, most recently acting as site manager for the construction of the Ailsa FSO in Singapore, for the Culzean project.
Jens Klit Thomsen, currently head of Decommissioning Business Development at Maersk Supply Service has been appointed chief commercial officer of the JV as of April 01, 2018. Carsten Sander Jacobsen has been appointed chief technical officer as of May 01, 2018. He is currently head of P&E Engineering in INEOS Denmark, responsible for field development and decommissioning activities.