Indonesia’s Pertamina has reportedly successfully decommissioned the Southeast Asian country’s first offshore oil and gas platform in partnership with South Korean companies, according to upstream regulator SKK Migas.
The platform, formally owned by Chevron, operated in the East Kalimantan-Attaka Block offshore Balikpapan.
The decommissioning project was part of a government-to-government partnership agreement between Indonesia and South Korea.
Pertamina worked with a South Korean consortium led by KHAN Offshore for the rigs-to-reef pilot project. Other South Korean companies involved included Rovostech, ZEN, Samin SMT, KOC, JD Engineering, BMI, Ocean Wide, CIIZ, Korea Aquatic Life Institute, and Neo-Max.
In July 2021, Energy Voice reported about the emerging strategic relationship between Indonesia and South Korea for decommissioning projects, when Susana Kurniasih, head of communications at SKK Migas, said that the regulator is collaborating with other government institutions and countries on financial, as well as technical, considerations.
There are currently 634 oil and gas platforms offshore Indonesia, Southeast Asia’s largest hydrocarbon’s producer. Of these, more than 500 are still actively used for upstream operations, while at least 100 platforms are not operating and need to be dismantled.
Outdated contracts and a lack of legislative guidance and clarity in Indonesia, has left the decommissioning market stagnant. But that looks set to change as SKK Migas starts to address the challenges ahead for the vast equatorial archipelago that has been pumping oil since the 1960s.
Indeed, decommissioning Southeast Asia’s ageing oilfields offers a vast but challenging market opportunity.
More than 200 offshore fields are expected to stop producing in Southeast Asia by 2030 with total decommissioning costs estimated to range from $30 billion to as much as $100 billion.
Indeed, the potential market opportunity in Southeast Asia could be huge with more than 1500 platforms and over 7000 wells projected to need decommissioning by 2030.
Significantly, the decommissioning industry in the region will evolve differently from the rest of the world given the vast number of relatively small structures and wells. As a result, the region will need to develop its own specialised industry, which does not yet exist.
Recommended for you