Technical Guidelines on the Disassembly of Offshore Oil and Gas Installations

Minister of Energy and Mineral Resources Regulation No. 1 of 2011 on Technical Guidelines for the Disassembly of Offshore Oil and Gas Installations (‘Regulation’) has been issued so as to ensure safety, environmental management, and to maintaining the condition of offshore installations as the property of the state.

As per Article 21 of Government Regulation No. 17 of 1974, an offshore installation must be disassembled in the event that the installation is no longer being used, within a time period that is stipulated by the Director General of Oil and Gas. The contractor has to disassemble the offshore oil and gas installation after obtaining approval from the Director General (Article 6 (1)).

Articles 6 (2) and (3) specify that to obtain the approval to disassemble, the contractor has to submit an application to the Director General through the Executive Agency (Badan Pelaksana), along with supporting documents, including, among others: a list of equipment, latest offshore installation location map, environmental documents, plug and abandonment, disassembly, transfer and/or transportation procedures, occupational health and safety procedures, and disassembly schedules.

The Director General will issue the approval within 10 working days, following a 30 working day document evaluation period, and considering any clarifications presentation by the contractor. The approval will be valid for maximum of 3 years, and will be invalidated if there is no implementation within the provided period of time, or if there is an amendment to the disassembly plan (Article 7).

Details of the technical guidelines for disassembly are set out in Articles 9 through 13, and address the hiring of qualified workers or the utilization of a national service company that has been certified by the Director General. The disassembly of the offshore installation has to be carried out with due consideration for occupational health and safety.

The contractor has to submit a report on the implementation of the disassembly within 14 days following completion. Subsequently, the Director General will issue site clearance certificate (surat keterangan pemulihan lokasi) within 30 working days following a satisfactory technical report evaluation (Article 14).

It should be noted that contractors who have commenced disassembly of offshore oil and gas installations prior the enactment of the Regulation have to report their activities to the Director General (through the Executive Agency) before 7 January 2012 (1 year from the enactment of the Regulation) for the purpose of evaluation and for the issuance of the site clearance certificate.

The Regulation has been in force since 7 January 2011.