Thông tư 17/2020/TT-BCT

CIRCULAR

ON PRESERVATION AND DISPOSAL OF OIL WELLS

Pursuant to Petroleum Law dated July 6, 1993; Law on amendments to Petroleum Law No. 19/2000/QH10 dated June 9, 2000; Law on amendments to Petroleum Law No. 10/2008/QH12 dated June 3, 2008;

Pursuant to Decree No. 98/2017/ND-CP dated August 18, 2017 of the Government on functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade;

Pursuant to Decree 95/2015/ND-CP dated October 16, 2015 of the Government on elaborating to Petroleum Law;

Pursuant to Decree No. 33/2013/ND-CP dated April 22, 2013 of the Government on sample contract of contract for petroleum product division;

Pursuant to Decision No. 04/2015/QD-TTg dated January 20, 2015 of Prime Minister on safety management in petroleum-related operations;

Pursuant to Decision No. 49/2017/QD-TTg dated December 21, 2017 of Prime Minister on clearing constructions, equipment and devices serving petroleum-related operations;

At request of Director General of Oil, Gas and Coal Department;

Minister of Industry and Trade promulgates Circular on preservation and disposal of oil wells.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular prescribes implementation of preservation and disposal of oil wells for the purpose of protecting natural resources, environment and structure of the underground and preventing creation of obstacles or disruption of environment at sea and on land.

Article 2. Regulated entities

This Circular applies to:

1. Operators, oil joint ventures, organizations and individuals (hereinafter referred to as “operators”) implementing oil well preservation and disposal during search, survey, mine development and oil extraction within terrestrial territory, island, archipelagoes, internal waters, territorial seas, contiguous zones, exclusive economic zones and continental shelves within sovereignty, sovereignty rights and jurisdiction of Vietnam which are identified according to Vietnamese law and international agreements to which Vietnam is a signatory.

2. Organizations and individuals related to preservation and disposal of oil wells.

Article 3. Term interpretation

In this Circular, terms below are construed as follows:

1. “well preservation” refers to the use of appropriate solution, reinforcement of plugs and installation of equipment in the well to ensure safety for the well in a definite period of time so later survey, well testing and extraction can be conducted conveniently.

2. “drilling program” refers to a document established by the operator consisting of details related to technical solutions, measures, progression and general well decommissioning plan for implementation of one or multiple wells in oil mines and reservoirs.

3. “well retainer” refers to a tool used during pumping high-pressure cement to prevent the cement from moving up or down along the wells. Cement retainers shall be made in an airtight and irretrievable manner and from metal or materials that can be destroyed by drilling.

4. “well disposal” refers to retrieval of equipment in the well, reinforcement of cement plugs, placement of bridge plugs, removal and retrieval of bore sections in the well, removal of obstacles (if any) around the well opening.

5. “general well decommissioning plan” refers to a document on estimated plan for partially or totally disposing or preserving an oil well established by the operator in the drilling program.

6. “well decommissioning” refers to partial or total disposal or preservation of an oil well.

7. “well decommissioning plan” refers to a document prepared by the operator prior to decommissioning the well.

8. “perforation section” refers to any one section of a well that has been bored and perforated to create a channel between the casing and the well or between layers of casings

9. “cement plug” refers to cement mortar pumped into the well to a definite depth to create a firm layer of cement to separate different reservoirs along the well. Location of a cement plug consists of depth and length determined along the length of the well.

10. “bridge plug” refers to a tool which is used to isolate wellbore, made from metal and rubber that can be destroyed by drilling; usually used to isolate different depth in a cased wellbore.

Chapter II

WELL DECOMMISSIONING PLAN

Article 4. Presentation of well decommissioning plan

1. Operators must present well decommissioning plans 5 working days prior to the decommissioning to enable the Vietnam National Oil and Gas Group to consider and approve 2 working days prior to the decommissioning.

2. With respect to decommissioning under plans for clearing constructions, equipment and devices serving petroleum-related operations, on the basis of plans for clearing constructions, equipment and devices serving petroleum-related operations approved by Ministry of Industry and Trade under Decision No. 49/2017/QD-TTg dated December 21, 2017 of the Prime Minister, operators shall present well decommissioning plans to the Vietnam National Oil and Gas Group as specified under Clause 1 of this Article.

3. During implementation of well decommissioning plans, operators must cooperate with Vietnam National Oil and Gas Group, ministries and local governments in publicizing the plans as per the law.

4. Throughout drilling programs of mines, reservoirs or individual wells, operators must prepare preliminary well decommissioning plans for inactive wells.

Article 5. Details of well decommissioning plan

Well decommissioning plans must include following details:

1. Reasons for decommissioning wells.

2. Basic figures of the wells, summary of drilling and completion process; basic figures of well utilization and use processes, documents on geological and well logging, results of bonding quality of cement rock outside of extraction casing and between different casings, pore pressure, fracture pressure at the base of casings and documents related to wells or bores that need to be disposed or preserved.

3. Well structure diagrams that specify: Depth of wells, depth of casings, depth of cement pillars in ring-shaped clearance; types and density of fluid in wells and in ring-shaped clearance; types of equipment currently installed in the well. With respect to directional drilling and horizontal drilling, specify depth of directional drilling, vertical depth, depth along the shaft, angles and azimuths.

4. Methods of installing bridge plugs and cement plugs including procedures for installation, plug materials, cement mortar volume and drilling liquid volume, installation area and depth, methods of experimenting pressure and load with specific experiment value. With respect to wells that must be disposed, specify methods of cutting bore and depth of the cut.

5. Plans for clearing and surveying around the well opening before and after decommissioning wells, moving or removing drilling rigs.

6. Time of decommissioning wells, plans for periodic examination for preserved wells.

7. Plans for responding to marine oil spill, marine chemical spill and marine environment protection activities according to regulations and law on protection of environment and environmental resources of seas and islands.

Article 6. Well decommissioning report

1. Operators must submit reports on well decommissioning to the Vietnam National Oil and Gas Group within 30 days after concluding the affairs.

2. With respect to wells that are decommissioned immediately after completing drilling programs, operators may include well decommissioning reports in the final reports on well drilling.

3. All documents related to well decommissioning, including diagrams on actual states of the wells after being decommissioned and documents collected after performing final survey on current conditions of the surface and surroundings of the wells must be attached to well decommissioning reports.

4. With respect to wells under plans for clearing constructions, equipment and devices serving petroleum-related operations, operators must comply with Decision No. 49/2017/QD-TTg dated December 21, 2017 of Prime Minister.

5. Operators must be responsible for the safety, environment and consequences when decommissioning wells.

6. Operators must inform and update information on wells that have been preserved and disposed to Vietnam National Oil and Gas Group.

Chapter III

WELL PRESERVATION

Article 7. General requirements for well preservation

1. The wellbore must always be in safe conditions, even when equipment installed at the well opening is accidentally damaged or disposed, and separate different reservoirs from each other and reservoirs to the surface, except for cases in which all reservoirs are simultaneously extracted.

2. Ensure reusability of the well to drill, conduct research, extract, repair and other forms or dispose the well at any given time and ensure safety.

3. Restrict hindrance of equipment to surrounding environment.

4. Install signal buoys for underground wells preserved in waters with less than 20 m in depth.

Article 8. Types of wells that need to be preserved

Based on well conditions, wells that need to be preserved are divided into 3 types:

Type 1: Wells that require long-term preservation (3 years or longer), consisting of wells that are empirically proven to be able to be utilized for economic gains but are not developed in terms of use plans.

Type 2: Wells that require temporary preservation (from 1 to 3 years), consisting of wells that are listed under extraction plans but are considered to be backup wells.

Type 3: Wells that require short-term preservation (less than 1 year) consisting of wells that are currently active and suspended for repair or about to be brought into use.

Article 9. Wellbore preservation

1. Installation of equipment or reinforcement of well caps must ensure control of pressure accumulated beneath the caps prior to removal of the caps when reopening the wells.

2. During preservation period, remove sucker rods out of the openings and install cement and bridge plugs to separate opened reservoirs in type 1 wells  Methods of installing plugs shall conform to Chapter IV of this Circular.

3. May leave sucker rods in type 2 wells. During preservation period, the wells must be filled with well preservation fluid.

4. Type 3 wells may be retained at current conditions given that valves must be sealed and valve handles must be removed, except for wells whose openings are located underground.

Article 10. Well preservation fluid

Operators must ensure to fill type 1 and 2 wells with preservation fluid in adequate amount to suppress pore pressure in the well prior to performing well preservation. The preservation fluid must be able to prevent equipment from being corroded.

Article 11. Underground wellhead preservation

1. With respect to wellhead located under the sea, directional cable system must be cut and retrieved prior to moving the drilling rigs.

2. The inside of the wellhead must be processed to prevent corrosion while the outside must be protected to avoid collision damage and equipped to enable easy location.

3. In areas where depth is less than 20 m, to prevent danger to wellheads, directional tubes, and ships, operators must install signal buoys.

Article 12. Surface wellhead preservation

1. Preserved wells located on fixed rigs must be installed with Christmas trees. Handles of all valves other than test valves must be removed. Branching pipes and testing manometers must be removed while plugs and blind flanges must be installed in openings of pipes and stands of manometers. Install signs with dimensions of 0.4 m x 0.2 m on well openings that state name of wells, mines, operators responsible for preservation, time of preservation, reason for preservation and period of preservation.

2. Land wells shall conform to Clause 1 of this Article, in addition, these wells shall be protected by reinforced concrete fences with dimensions of 4 m (length) x 4 m (width) x 2 m (height) on which signs with dimensions of 0.4 m x 0.2 m specifying name of wells, mines, operators responsible for preservation, time of preservation, reason for preservation and period of preservation.

Article 13. Examination of preserved wells

1. Operators are responsible for examining wells that are preserved using methods and equipment compliant with good international petroleum industry practices to detect any irregularity in the well area. In case any irregularity is detected in the well area, operators shall deal with to ensure safety.

2. Operators are responsible for periodically examining wells that are being preserved in following manner:

a) On a yearly basis for type 1 wells;

b) On a quarterly basis for type 2 wells;

c) On a monthly basis for type 3 wells.

3. With respect to preserved wells whose wellhead is underground or submerged, first-time examination for type 1 and type 2 wells shall be conducted after 1 year from the date of preservation. On the basis of risk assessment, operators may propose subsequent examination which takes place 2 years after the first examination. In case any irregularity is detected, operators must develop remedial measures and submit reports to Vietnam National Oil and Gas Group and Ministry of Industry and Trade.

4. Examination results must be included in reports on respective activities produced by operators.

Article 14. Preservation deadline

Operators are responsible for bringing preserved type 1 wells into operator or disposing such wells before a permitted deadline but no later than 6 years from the date of preservation. This preservation deadline may be extended when extension is proven to be satisfactory to safety and environmental protection requirements of Vietnamese regulations and law and good international petroleum industry practices.

Chapter IV

WELL DISPOSAL

Article 15. General requirements for well disposal

1. Wells that are to be disposed must be maintained in terms of integrity of wellbore and prevent fluids from traversing across annuli or between seabed and ground surface.

2. After completing well disposal, seabed or areas surrounding the wells must be cleared in order to prevent presence of obstacles or disruption of original states of natural environment.

Article 16. Cut and retrieval of casings, wellheads, and equipment in wellbore

1. Operators must not retrieve casings deposited in wells unless permitted by Vietnam National Oil and Gas Group in writing.

2. Operators must adopt mechanical or hydraulic methods to cut and retrieve wellheads. Casings must be cut close to the natural seabed and wellheads must be fully retrieved in order to prevent presence of any parts on sea surface and obstruction to other maritime activities and extraction.

3. With respect to land wells, depth where wellheads and casings are cut must be at least 3 m below ground surface.

4. When cutting casings, operators must pay attention to following points:

a) If cross section 2 casings are not reinforced with cement, the inner casing may be cut and retrieved. Depth where the cut occurs based on height of the cement pillar in ring-shaped clearance is determined via documents on well logging;

b) If residual pressure exists in ring-shaped clearance outside of casings, extensively deal with the pressure prior to cutting the casings with additional technical methods specified under Article 20 of this Circular;

c) Prior to cutting casings, fluid density in wells must be modified to suit durability of the strata where the previous casing section is located.

5. All equipment within the wellbore must be retrieved. In case retrieval is technically infeasible and not compliant with regulations on environmental protection and safety assurance during implementation of petroleum contracts, operators must develop measures in well decommissioning plans for consideration and approval of Vietnam National Oil and Gas Group. Retention of equipment in wellbore must conform to Clause 1 Article 15, Article 22 and Article 23 of this Circular.

6. Retention of wellheads or partial of casings must conform to Article 23 Decision No. 49/2017/QD-TTg dated December 21, 2017 of the Prime Minister.

Article 17. Position of plugs in bare section of wells

1. Reservoirs containing petroleum, reservoirs with abnormal pressure or reservoirs causing loss of fluids in bare section of wells must be isolated by cement plugs covered for entire such reservoirs adding 50 m on the top and 50 m at the bottom of such reservoir (Annex – figure 1).

2. If bare section of wells  has length less than or equal to 250 m and diameter less than 215.9 mm (8.5 inch), cement plugs must be placed at position higher than the deepest casing pipe base 50 m from bottom of wells (Annex – picture 2).

3. If bare section of wells has length more than 250 m (>250 m) and reservoirs in such section of wells do not contain gas or have no abnormal pressure, only lay a cement plug with length of 100 m covering 50 m above and 50 m below the deepest casing pipe base (Annex – figure 3)

4. If bare section of wells has abnormal pressure or reservoirs containing petroleum and drilling sets, drilling rods, casing pipes and other instruments are jammed in such section, the above equipment must be withdrawn to make clearance for the are section of well to the ultimate level and bury, destroy such bare section of wells in accordance with Clause 1 Article 18 of this Circular.

5. If bare section of wells causes losses of cement mortar circulation thus make placement of cement plugs specified under Clauses 1, 2, and 3 of this Article infeasible, operators must lay a bridge plug within 50 m from the deepest casing and a cement plug whose length is at least 100 m immediately above the bridge plug (Annex – Figure 3a).

Article 18. Position of plugs in propped section of wells

1. In order to isolate section of well which has propped by pipes with bare section of well, operators must lay a balance cement plug with length not less than 100 m covering 50 m above and 50 m below the deepest casing pipe base (Annex – figure 4).

2. In case where conditions of inside of drilling well are not allowed isolating efficiently by balance cement plug, operators may apply one of following methods:

a) Method of using bridge plug: To lay a bridge plug above casing pipe base in distance of 50 m and a cement plug with minimal length of 100 m must be laid above bridge plug (Annex – figure 5);

b) Method of using Cement Retainer: Casing pipe base mat be isolated by placing an instrument to hold cement at a distance of 50 m from casing pipe base, then conduct the cement pressure pump through this instrument. Volume of cement mortar must ensure to create a 100 m-long cement plug under cement retainer, then placing a cement plug with minimal height of 15 m above cement retainer (Annex – figure 6);

c) If a cement plug is used to isolate the overlapping section of floating plug of pipe with previous pipe base, this cement plug must have minimal length of 100 m and be placed at distance of 50 m above and 50 m below in comparison with position to hang floating casing pipe (Annex – figure 7);

d) In case of propping pipe through salt reservoir or drift sand (drift reservoir), to prevent case where casing pipe is distorted because reservoir is able to flow, cement plug must be placed through space of drift reservoir to prevent pressure from the outside. If a reservoir is able to flow over 200 m, it must place two cement plugs minimally, one plug is placed through boundary of bottom and one plug is placed through boundary of top of such drift reservoir (Annex – figure 8).

Article 19. Disposal of well section perforated to open reservoir

If wells are perforated to open reservoirs, opened spaces of reservoir must be isolated orderly by bridge plugs, cement plugs or both bridge plugs and cement plugs if distance is allowed. Well disposal process must be performed following any of methods below:

1. Method of pumping cement for replacement: To place a balance cement plug crossing the perforation section and extend 15-30 m above and 15-30 m below from the perforation section to the nearest bridge plug (Annex - figure 9).

2. Method of using bridge plug: The perforation sections may be isolated by placing a bridge plug (or exploitation packer with plug) in scope of 15-30 m from top of the perforated section and a cement plug with length not less than 15 m must be placed above this bridge plug (Annex - figure 10).

3. Method of cement pressure pump: To isolate reservoirs with abnormal pressure and prevent fluids flowing between reservoirs and behind of casing pipes, the perforation section must be pumped cement pressure. The process of pressure pump must be perform by pumping cement in the perforation section through an cement retainer placed above the perforation section at least 15 m (Annex – figure 11a) or a rod set associated with counter-pressure equipment (Annex – figure 11b). At the same time, at least 25 m cement must be retained in any pressure pump instrument which is placed in wells

Article 20. Additional reinforcement methods

1. Chiseling pipe and pressure pumping: To prevent circulation of fluids between reservoirs and ring-shaped clearance, it must have 100 m cement with good adhesion minimally inside of previous pipe base. If not having, the last inside casing pipe must be chiseled at depth of 100m above pipe base before it and volume of cement mortar equivalent to 100 m ring-shaped clearance must be pressed through the chiseled section by Cement Retainer or packer with pressure not more than pressure to break reservoir (Annex – figure 12).

2. Chiseling pipe and circulation: If method of pressure pump cannot be performed due to the allowed safe pressure limitation of casing pipe, proceed to chisel the inside casing pipe adjoining the below part of previous casing pipe and perform cement pressure pump up to 100 m of ring-shaped clearance inside of the chiseled section (Annex – figure 13).

3. The chiseled points as described in Clauses 1 and 2 this Article shall be cemented like the perforation sections in Article 19 of this Circular.

Article 21. Plug placement in case of pipe cutting

1. When cutting pipe for withdrawal as prescribed at clauses 2 and 3 article 16, the cut plugs of casing pipes must be isolated under one of following methods:

a) Method of cement plug for replacement: A 100 m or longer balance cement plug shall be used to isolate plug of pipe and prolong 50 m above and 50 m below from the cut plug of pipe (Annex - figure 14);

b) Method of cement pressure pump: To place an instrument to hold cement in a bigger casing pipe at distance of 50 m above the cut plug of casing pipe and conduct cement pressure pump through instrument for pressure pump. Volume of cement mortar must ensure to fill up 100 m casing pipe below instrument of pressure pump (50 m inside and above of the cut plug of casing pipe and conduct the cement pressure pump through instrument for pressure pump. Volume of cement mortar must ensure to fill up 100 m casing pipe below instrument of pressure pump (50m inside and above of the cut plug of casing pipe) and 15 m above cement retainer (Annex – figure 15).

2. Before cutting and withdrawing surface casing pipe and conductor pipe, it must place a bridge plug in surface pipe at depth of 200 m under sea beds for offshore drilling wells or under rotary table for drilling wells on land. A cement plug with 100 m surface shall be placed on top of that bridge plug.

3. For drilling plugs on land, the cut plugs of surface pipe and conductor pipe must be filled with cement and leveling foundation of drilling well to turn the initial natural state and at position of well a steel signboard, size of 0.4 m x 0.2 m, clearly writing name of mine, name of drilling well, name of operator and date of disposal must be placed.

Article 22. Plug placement in case of retention of equipment in wellbore

In case operators are permitted to leave equipment in wellbore as specified under Clause 5 Article 16 of this Circular, plug placement must conform to following regulations:

1. In case operators prove existence of good quality barricade and cement rock ranges outside of sucker rods and above reservoirs that need to be isolated, may cut and retrieve equipment above extraction parkers, place a cement plug with at least 100 m in length at the depth of the barricade (Annex – figure 16a).

2. In case cement rock ranges outside of sucker rods fail to meet desired quality, perforate and pump cement in ring-shaped clearance then follow Clause 1 of this Article (Annex – figure 16b).

Article 23. Requirements for plug test

1. Checking position and load test of cement plug:

a) Wait no less than 6 hours for a cement plug to set, then place instrument kit down to determine position of cement plug and use a tonnage of not less than 10 tonne to check the accuracy of position and precipitate quality of the cement plug;

b) If a cement plug is placed off the tentative position or fails to bear test load, place other cement plug as replacement and then re-determine position and test load of new cement plug using method stated at Point a Clause 1 of this Article.

2. Requirements for pressure test of plugs:

a) To affirm isolated situation of bare section of well under the deepest casing pipe base, cement plugs and bridge plugs as stated at Clauses 2 and 3 Article 17 of this Circular must be tested under pressure higher than test pressure for receipt of reservoir at pipe base 3,450 kPa (500 psi) for 15 minutes;

b) Cement plugs and bridge plugs specified under Article 18 must be tested up to a pressure higher than test pressure for receipt of reservoir at casing pipe base 3,450 kPa (500 psi) for 15 minutes;

c) Cement plugs and bridge plugs specified under Article 19 and Article 20 must be tested up to a pressure higher than reservoir pressure of space tested for reservoir 3,450 kPa (500 psi) for 15 minutes;

d) Cement plugs specified under Clause 1 Article 21 of this Circular must be tested up to a pressure higher than test pressure for receipt at the next casing pipe base 3,450 kPa (500 psi) for 15 minutes.

3. With respect to wells that utilize underground wellheads, in addition to Clause 1 and 2 of this Article, operators must test infiltration capacity of fluid into wellbore with cement plugs and bridge plugs as specified under Article 19 of this Circular to prevent infiltration from the reservoirs into the wellbore.

4. In order for plugs to satisfy requirement on pressure test, they must withstand pressure test for 15 minutes while the pressure is not reduced more than 10%.

Article 24. Solutions used in well disposal

1. When a part of well or entire well is disposed, the well must be filled up with solution with a density that is sufficient to ensure for control of pressure existing in system before conducting operations involving well disposal.

2. Solution in drilling well must be processed to prevent corrosion for casing pipe.

3. For bare sections of well, before cementing, it must place a plug of buffer solution with high viscosity to prevent sediment cement under bottom of drilling well.

Article 25. Cement used in well disposal

1. Cement used to place any cement plug in drilling well must have minimal pressure durability of 3,000 kPa (435 psi) after cement has congealed in duration of 8 hours.

2. With respect to wells with high temperature and pressure, cement used to place any cement plug in the wells must have minimal pressure durability of 3,500 kPa (508 psi) after cement has congealed in duration of 48 hours.

Article 26. Seabed exploration in case of well disposal

1. The operators must ensure that after disposing a drilling well, seabed surrounding opening of drilling wellhead must be surveyed carefully to ensure that all obstacles have been cleared.

2. Documents on the latest seabed exploration must be attached to reports on well disposal specified under Article 6 of this Circular.

Chapter V

IMPLEMENTATION

Article 27. Special cases

When adopting methods of cutting wellhead and casing using specialized explosive materials; new technical solutions; materials for well preservation and disposal; extending well preservation deadline, operators must present documents proving that methods, technical solutions and risk assessment satisfy regulations on safety and environmental protection according to Vietnamese regulations and law and good international petroleum industry practices to enable Vietnamese competent agencies to consider and approve according to Decision No. 04/2015/QD-TTg dated January 20, 2015 and Decision No.49/2017/QD-TTg dated December 21, 2017 of Prime Minister.

Article 28. Transition clauses

In case of well preservation and disposal approved and implemented before the effective date hereof , operators, agencies, organizations, and individuals shall comply with Regulations on oil well preservation and disposal attached to Decision No. 37/2005/QD-BCN dated November 25, 2005 of Minister of Industry.

Article 29. Entry into force and implementation

1. This Circular comes into force from September 10, 2020 and Decision No. 37/2005/QD-BCN dated November 25, 2005 of Minister of Industry on Regulations on oil well preservation and disposal expires from the effective date hereof.

2. Difficulties that arise during the implementation of this Circular should be reported to the Ministry for consideration./.