Oil firms must carry out decommissioning program

The government will soon issue a regulation requiring oil and gas contractors to allocate funds amounting to around US$1.5 million for the decommissioning program of their offshore oil exploration and production facilities, Bisnis Indonesia reported on Wednesday.

?The criterion for the decommissioning program is being formulated. This regulation will be issued either in the form of government regulation, minister?s decree or presidential decree,? the minister said.

The regulation on the requirement to carry out decommissioning program is needed to ensure that old or neglected oil facilities at sea would not hamper the international shipping traffic.

According to the minister, most of oil producers left behind their offshore facilities after the production is completed.

Director General of Oil and Gas Iin Arifin Takhyan said that the government hoped that the oil and gas contractors would be able to shoulder the cost burden of the decommissioning program.

He said that the cost of the decommissioning program vary depending on the size and the depth of the oil facilities. The decommissioning program for an 100-ton oil rig with the depth of 25 feet under the sea would cost between US$50,000 and $400,000, while those for the 500-ton oil rig with the depth of 100 feet could cost some $1.5 million. (*)