SOUTHEAST ASIA: NAVIGATING THE LATE LIFE & DECOMMISSIONING OF OIL & GAS ASSETS
In Southeast Asia, over 200 offshore fields, comprising more than 1,500 platforms and 7,000 wells, are projected to cease production by 2030. The total decommissioning costs are estimated to range between USD $30 billion and $100 billion (IOGP 2024). Key countries driving this activity include Malaysia, Indonesia, Thailand and Brunei, all operating under regional frameworks such as ASCOPE’s decommissioning guidelines, developed in 2012.
These countries within the region are subject to several regional frameworks including ASCOPE, the ASEAN Council on Petroleum – decommissioning guidelines developed in 2012. In Southeast Asia, projects below have completed its decommissioning activities, highlighting the region’s growing focus on managing aging infrastructure:
Premier Oil’s Anoa O&G field offshore Indonesia
Petronas’ Dana and D30 fields in offshore Malaysia, involving 12 platform wells, 2 mobile offshore production units, 1 platform and related pipelines
Petronas’ Samarang SM-4 in offshore Malaysia, involving a riser platform
Chevron’s Erawan Block in offshore Thailand, involving removal of 49 platforms
Addressing Decommissioning Markets within the region
Southeast Asia’s oil and gas decommissioning market is diverse, with each country presenting unique challenges and opportunities.
Brunei, home to some of the oldest oil and gas infrastructure in the APAC region, is prioritizing the phased abandonment of its shallow-water fields, including the Champion and Ampa fields. With 214 offshore platforms and over 1,400 wells, the nation’s decommissioning activities are supported by updated guidelines developed in collaboration with BSP (Brunei Shell Petroleum).
Indonesia faces the challenge of managing over 630 offshore platforms, many of which are more than 40 years old. Despite limited decommissioning experience, the country’s regulatory body, SKK Migas, is focused on enhanced oil recovery initiatives and maximizing output from existing assets before decommissioning. Projects like the Anoa field’s decommissioning and the removal of the Belanak FSO have provided valuable learnings for future activities.
In Malaysia, approximately 40% of its 300+ offshore platforms are over 30 years old, and a significant number are operating beyond their design life. Petronas, the national oil company, plans to invest around USD $2 billion in decommissioning over the next decade. Upcoming plans include plugging and abandoning approximately 153 wells and the abandonment of about 37 offshore facilities and one onshore facility connecting Sabah-Sarawak Gas Pipeline (SSGP) that runs across Lawas, Limbang, Miri and Bintulu in Sarawak by 2028 under the Petronas Procedures and Guidelines for Upstream Activities (PPGUA).
Thailand, with its 450 offshore platforms, is advancing its decommissioning efforts through initiatives such as Decomm 2.0, which streamlines regulatory approvals under the Thailand Department of Mineral Fuels (DMF). The country’s legal framework, rooted in its Petroleum Act, provides a strong foundation for efficient and sustainable decommissioning activities.
Prospects for Growth
Development of Technical Guidelines: Establishing comprehensive technical guidelines tailored to the specific conditions of Southeast Asia can enhance safety protocols and improve recycling facilities for decommissioned structures. The ASCOPE Decommissioning Guidelines aim to provide a regional standard but require further implementation within member nations
Investment in Recycling Infrastructure: Significant investment is needed to develop dedicated recycling facilities that can handle materials from decommissioned offshore structures effectively. Modernizing existing yards and creating new facilities can help reduce transportation costs and environmental impacts
International Collaboration: Collaborations between international companies and local regulators can facilitate knowledge transfer regarding best practices in decommissioning. For instance, Chevron's proactive approach in Thailand serves as a benchmark for large-scale decommissioning efforts in the region
Adoption of Sustainable Practices: Implementing sustainable decommissioning practices such as the "rigs-to-reefs" program can provide ecological benefits while reducing costs. This approach allows certain structures to be left in place to promote marine life, significantly lowering removal expenses
Late Life Services
Late-life operational decisions play a pivotal role in determining the future of energy assets. Bureau Veritas offers comprehensive support to operators evaluating options such as life extension, repurposing, selling, or decommissioning, ensuring informed decisions and effective outcomes.
Asset Studies: Includes Life Extension Studies, Preliminary Studies, and Asset Integrity Studies to assess the potential and challenges of aging infrastructure.
Technical Assessments: Expertise in Engineering & Design Integrity, Structural & Plant Integrity, and Decarbonization aids in planning for longevity and sustainability.
Technical Due Diligence: Offers insights for asset sale or purchase, covering pipelines, topsides, and more.
Assurance Services: Encompasses Risk Control, Quality Assurance, and Marine Assurance, ensuring adherence to safety and quality standards.
Regulatory Compliance: Support for permitting, licensing, and regulatory navigation to streamline compliance processes.
Decommissioning Services
When decommissioning becomes the best path forward, Bureau Veritas provides expertise to manage the process from start to finish. Divided into key focus areas, our services aim to reduce uncertainty, enhance safety, and maintain compliance.
Safety & Regulatory: HAZID/HAZOP studies, Marine Warranty Surveys (MWS), and regulatory guidance ensure safe and compliant decommissioning.
Environmental Solutions: Environmental Impact Assessments, carbon footprint analyses, and circular economy initiatives reduce ecological impacts.
Asset Management: Inventory Assessment, Technical Due Diligence, and Structural Integrity Studies offer detailed evaluations for effective decommissioning planning.
People Solutions: Stakeholder management, project team support, and client representation ensure a collaborative and well-executed process.
Conclusion
The late-life and decommissioning of oil and gas assets in Southeast Asia represent both a challenge and an opportunity. With billions of dollars at stake and aging infrastructure requiring urgent attention, the region’s governments and industry players must collaborate to develop robust technical guidelines, invest in recycling infrastructure, and adopt sustainable practices. By leveraging international expertise and innovative approaches, South East Asia can transform its decommissioning activities into a model for efficiency and environmental stewardship, paving the way for a sustainable energy future.
Regional Business Development Manager, Oil & Gas
Bureau Veritas South East Asia
“South East Asia faces a pivotal moment as 1,500 platforms and 7,000 wells near decommissioning by 2030. With billions at stake, proper and sustainable decommissioning is essential for cost efficiency and environmental protection.”