Well abandonment: cement plugging is mandatory

Decreto 1631/06 (Aug 31, 2006) approves the province's 'Rules and Procedures for the abandonment of hydrocarbon wells' (Annex I) and incorporates them into the hydrocarbon environmental regulation (Annex VII of Decreto 2656/99, which implements the environmental Ley 1875; citation corrected by clarifying Decreto 162/07). It covers every borehole deeper than 100 meters. It defines TWO types of abandonment — temporary (an exception, subject to a Monthly Abandonment Fee) and permanent — and creates the obligations that sustain the P&A market: (1) a mandatory Well Abandonment Plan, with a schedule, filed with the State Secretariat of Energy and Mining (60 days from entry into force; Ch. I.8-9 and IV.1); (2) the work may only be performed by companies registered in the Provincial Registry of Well Abandonment Operating Companies (I.10); (3) every new well must be categorized within 60 days of completion (I.11) and inactive or 'to-be-abandoned' wells are subject to deadlines by category (I.12); (4) permanent abandonment requires isolating every uncased permeable layer with cement plugs (2.1) and setting at least two cement plugs (2.2) —a first plug with a retainer no less than 30 m below the top of good cement, sealed with no less than 10 m of cement (2.4.1); a second plug of no less than 50 m covering at least 30 m below the surface-casing shoe (2.4.2)—, with cement under API standards (3.7); and it recommends cutting the casing at 2 m, welding a steel cap and covering it with a 1 m³ concrete block (2.5). verif · Aug 31, 2006 ↗

In force since its publication in the Official Gazette (Art. 3 of the decree itself, issued on Aug 31, 2006). Clarifying Decreto 162/07, signed on Feb 8, 2007 and published in the Official Gazette of Feb 16, 2007, corrects article 2 with retroactive effect: it counts as if the decree had said so from the start. verif · Aug 31, 2006 ↗

Concession holders, permit holders and contractors (required to file the Abandonment Plan, categorize wells and pay the Monthly Abandonment Fee for each well in temporary abandonment) and, above all, cementing and well-abandonment service companies: only firms registered in the Provincial Registry of Well Abandonment Operating Companies may carry out the abandonment, with a two-year renewable license, and every permanent abandonment requires at least two cement plugs, with tightness verification of the first one verif. It is demand created by the rule with a license as the entry barrier: the pattern of the already-registered provider thesis. verif · 2006-2026 ↗