Abandonment/Relinquish Regulations

There are several regulations had been set up by The Government of Indonesia to regulate the
processes of abandonment or relinquish of oil and gas fields at the end of production life
operated by oil companies with production sharing contract scheme (PSC) and returning back to
the government. Ministry of Energy and Mineral Resources and SKKKMIGAS are responsible
for the hand over for the returning the gas and oil fields at the end of production stage. The
regulations are basically issued by Ministry of Energy and Mineral Resources, but for the
implementation stage SKKMIGAS (Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu
Minyak dan Gas Bumi = Special Task Force for Upstream Oil and Gas Business Activities)
produces working order guides.
There two regulations issued by Ministry of Energy and Mineral Resources for these areas, one
regulation contents rules for returning the contract areas to the government and the other one
contents a technical guidance for demolition of offshore oil and gas installations. Two kind of
working order Guides also had been set up by SKKMIGAS to control the abandonment
processes. One Working Order Guide describes production sharing contract commitment and the
other organizes abandonment and site restoration. The detail regulations and working order
Guide are as follows:
1. Guide and Working Order of Returning Part of Contract Area, Ministry of Energy and
Mineral Resources Regulation No. 03, 2008.
2. Technical Guidance for Demolition of Offshore Oil and Gas Installations, Ministry of
Energy and Mineral Resources Regulation No. 01, 2011.
3. Production Sharing Contract Commitment, Working Order Guide no 047/PTK/VII/20111
and Decision Letter No. KEP-0139/BO00000/2010/S0, issued by BPMIGAS July 26,
2011
4. Abandonment and Site Restoration, Working Order Guide no 040/PTK/IX/2010 and
Decision Letter No. KEP-0096/BO00000/2011/S1, issued by BPMIGAS November 24,
2010

Ministry of Energy and Mineral Resources Regulation No. 03, 2008.

The important statement in this regulation is that if PSCs are finished operated oil or gas fields
they should return back the fields to The Ministry of Energy and Mineral Resources including all
complete data of the fields or structures collected during operation.
Ministry of Energy and Mineral Resources Regulation No. 01, 2011.
The important parts related to the abandonment are those the technical guidance for
demonization of offshore installation aimed to:
To ensure the safety of oil and gas industries
To ensure environmental management
To take care that all offshore installation becomes the governments properties
To take care the safety of sea traffics
To optimal the use of the governments properties
The demonization processes should be performed using technologies following Indonesian
standards, regional standards, and international standards, and also following the best technical
methods fulfill safety and environmental health.
Working Order Guide no 047/PTK/VII/20111 and Decision Letter No. KEP-
0139/BO00000/2010/S0
Some points relating to abandonment/relinquish of gas and oil fields are also stated in this
document, mainly when PSC return back the gas and oil fields after finished production. At the
end of the life time of the fields operated by PSC, PSC should inform SKKMIGAS that they will
give back the field to the government. Then SKKMIGAS will provide a guidance how to return
back the gas/oil contract area.
Furthermore PSC should submit a letter of returning a contract area to SKKMIGAS including
complete document summarized as follows:
General Data of PSC
Situation Map
Objectives of the letter
Exploration history of the contract area
Summary of the results of exploration activity
Regional geology and oil system
Resources, reserve, and potential exploration
Post drilling evaluation
Implementation EBA/EBLS
Abandonment and site restoration
List of assets will be returned
Financial report
Statement letter of no liability to third parties
Statement letter of in case any liability in the future, PSC will take responsibilities
Statement letter of responsibility of assets until agreement of demolishing assets signed
Explanation Letter to allocate time and a staff to communicate with SKKMIGAS
Working Order Guide no 040/PTK/IX/2010 and Decision Letter No. KEP-
0096/BO00000/2011/S1
This working order guide is special for abandonment and site restoration (ASR) guidance. The
ASR working order guide contents complete important procedures for abandonment and site
restoration. Those includes raising funds and ASP execution.
PSC should raise fund for ASR, starting at the initial year of a field going on production until
abandonment. The fund should be transferred to the bank account every year, the transferred
fund can be calculated as follows:
ASR fund estimation + Adjustment - ASP fund balance
ASP fund/year =
Remaining time (years) for collecting ASR fund
PSC should conduct ASR using the above funds. There are two conditions such as: onshore and
offshore.
In case of onshore operation, the ASR includes:
 o Transport pipes
o Gathering terminals/processes
o Tanks and equipments
o Terminals
o Cable powers and controls
o Supporting facilities (housing, workshop, and jetty)
o Other facilities
In case of offshore operation the ASR comprises as follows:
o Platforms (topsides, jackets, other facilities)
o Transport pipes
o Terminals
o Cable powers and controls
o Other facilities
PSC should report to SKKMIGAS about total amount of ASR funds, then ASP plan to be carried
out, and lastly ASR execution..