Decommissioning to cost billions of dollars
Indonesia, like other Southeast Asian states with a history of oil and gas exploration and production, are at the early stages of creating and implementing the relevant legislative and guidance frameworks necessary to implement the eventual decommissioning of petroleum assets.
Many of Indonesia’s oil and gas fields, both on and offshore, are coming to the end of their commercially viable operational lifespan. This report shows that over 60% of Indonesia’s oil and over 30% of gas production comes from late-life-cycle resources spread across the world’s largest island country. Despite investment and use of enhanced oil field recovery measures, and increasing automation to extend the economic lifespan of these assets, decommissioning will soon become necessary.
The challenges Indonesia faces
However, INDONESIA’S DECOMMISSIONING CHALLENGE REPORT highlights some key challenges that Indonesia faces in dismantaling its energy infrastructure. These include key technological, fiscal, environmental, regulatory and industrial capacity issues, which need to be addressed by both government and industry decision makers.
For example, in the case of oil rigs and platform, much of it was not designed to be dismantled, and as a result innovative technologies are having to be developed.
Then given that the cost of decommissioning is likely cost billions of dollars, the big question facing stakeholders, is how it is to be funded is and who will pay for it. Since there does not appear to be adequate funding in place to pay for such efforts.
For a free copy of this report to download https://www.nicnewmanoxford.com/indonesias-decommissioning-challenge-report/