SPE-193956-MS

Plug and Abandonment Procedures for Onshore Wells and the Utilization of
Reserved Abandonment and Site Restoration ASR Funds

Afriandi Eka Prasetya, Rakhmahwidiati Rakhmahwidiati, and Ronald Daniel Pangihutan Hutabarat, SKK Migas;
Simon Paulus, ConocoPhillips Grissik Ltd.

Copyright 2018, Society of Petroleum Engineers

This paper was prepared for presentation at the SPE Symposium: Decommissioning and Abandonment held in Kuala Lumpur, Malaysia, 3 - 4 December 2018.

This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents
of the paper have not been reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessarily reflect
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Abstract
Provide an overview of the procedures for abandoning onshore wells, backgrounds and technical
requirements as a reference. Provide an overview of the utilization of reserved abandonment and site
restoration funds to finance the abandonment of the wells.
Plugging and abandoning the well is done when it has not more potential on productivity, has a well
integrity problem, and is at risk of theft and the environment. Procedures undertaken to obtain approval for
the closure of the well. The technical review of abandoning of the well refers to recognized national and
international standards. Discuss some possible innovations to obtain more effective way in troubleshooting
or to replace some procedures that are not possible to be followed. Reserved ASR funds disbursement
procedures to pay for work. Challenges to speed up the process of disbursement of funds.
Following standard procedures requires considerable attention and impacts on costs to be incurred.
Disbursing ASR funds that have been reserved to pay for the work is not as easy as the established procedure.
Several suggestions for improvements are made to speed work approval and disbursement of funds.
Well abandonment procedures have been standardized, but submission procedures and ASR
disbursement submissions are necessary for every operator to know. This paper provides an important guide
for operators to submit P&A proposals and fund disbursements.

Introductions
The "G" Block is located in South Sumatra and covers a contract area of 2,360 square kilometres. The
production sharing contract (PSC) was awarded in 1983 and consists of five oil fields and seven natural
gas fields. Since the first significant gas discovery was made in 1990, considerable gas reserves have been
proven, particularly in the Suban field. The "G" PSC plays its role as one of Indonesia's key gas supply
sources (Figure 1).
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Figure 1—The "G" Block of South Sumatra Basin plays the role as one of Indonesia's key gas
supply sources, its mature assets exposed to operational and environmental safety risks.

With mature assets, there are many wells that no longer have hydrocarbon potential and cannot be put on
service again in the future. Most wells constructed more than 20 years ago have wellbore integrity problems.
Not to mention the rampant theft of assets and illegal mining around the work area is very risky for the
safety of operations and the environment. These things are taken into consideration to secure the well and
submit proposals for plug and abandonment work or P&A.
Since 2012, the company conducted a P&A project campaign using abandonment and site restoration
(ASR) funds that had been previously reserved. P&A wells utilizing ASR funds for financing should refer
to the PTK 040 regarding ASR. With operational experience closing 38 wells in the period 2012 − 2017
improvements were made to the P&A method and technique against the reference standard and obtained
a cost estimation matrix based on depth versus pressure and integrity issues. On submitting proposals and
disbursing ASR funds, the company also took a lot of lessons learned and proposed improvements to
financial procedures.

P&A Technical Review

The objective of the well P&A is to assure isolation of hydrocarbon zones, protection of fresh water aquifers
and prevention of migration of fluids and gases by conducting the following program: (1) Rig equipments
mobilization, including slickline unit and cementing unit; (2) Wellsite preparation, securing the well, nipple
up the blow out preventer (BOP) and rig up the equipment; (3) Put out of hole the existing completion; (4)
Rig up cementing unit, perform cement plugs as required, tag the top of cement and pressure test cement
at 1000 pound per square inch for 15 minutes for every plug, and pump chloride fluid between plugs; (5)
Dig up cellar, cut-off casing and perform top job cementing; (6) Rig down equipments, clean up location
and demobilize.
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Indonesia national standard document SNI 13-6910-2002, subsection 6.10 Plug and Abandonment of
Wells is used as a reference for the cement plugs placement and its length, mechanical plugs placement and
the pressure test procedure for each plug. The plugs are placed to isolate the perforation intervals, the open
hole, the near surface and the casing annulus, as shown in Figure 2.

Figure 2—P&A acceptable options refer to SNI 13-6910-2002 regarding the plugs placement
to isolate the perforation intervals, the open hole, the near surface and the casing annulus.

During P&A works, attention must be paid to the presence or absence of sustained casing pressure (as part
of the management of well integrity) and the cement bonding quality from cement bond logging (CBL) data
reading. Source of pressure can be determined from open hole logging in permeable formations, production
logging tool tests, electronic memory recorder, CBL and noise log. During the process of pumping the
cement-slurry-brine, the maximum allowable working pressure (MAWP) limit of leak off test (LOT) and
casing properties must be considered.
To overcome sustained casing pressure can be done in several ways and can be adjusted with
recommended practice in each company as long as it does not conflict with SNI 13-6910-2002. If the annulus
casing has enough free space: (i) Bleed and lubricate so that sustained casing pressure can be zero with
mud or brine; (ii) Pump the resin through a control line or macaroni tubing and then doing a cement top job
or can directly do the top job cement; (iii) Punch the casing (punching holes without penetrating the next
casing) then pumping cement in the annulus casing followed by cement top job.
If the annular casing does not have enough free space (hydrostatic pressure of mud or brine less than
pressure from below): (i) Perforate then squeeze cementing close to the casing shoe; (ii) Cut or milling the
casing which close to the casing shoe, reaming then place the cement plug.
According to NORSOK D-010, permanent well barrier should have the following properties:
impermeable, long term integrity, non shrinking, ductile (non brittle) – able to withstand mechanical load/
impact, resistance to different chemical or substance (H2S, CO2 and hydrocarbon), and wetting, to ensure
bonding to steel. To plug the annulus, many technical journals support the use of resin, with the conclusion
that the strength of the 10 feet of resin that is set as a well barrier has a strength equivalent to 200 feet of
4 SPE-193956-MS

cement plug. However, SNI 13-6910-2002 does not recognize resin as a substitute for cement. More in-
depth discussion and study of this matter is needed.

Cost Estimation and Approval

Based on the experience to close 38 wells between the years 2012 to 2017, the category of the pressure and
well integrity issues are divided into three: good, moderate and poor. Good is that the well is easily closed
and the integrity of the well is guaranteed and the poor is a lot of leaks and difficulties in isolating according
to standards. Moderate is a condition between good and poor. Table 1 recommends the cost estimation
matrix as a result of statistical data processing.

Table 1—Cost Estimation Matrix

PRESSURE AND WELL INTEGRITY ISSUE

TOTAL GOOD MODERATE POOR

DEPTH (meter) (Thousand US$) (Thousand US$) (Thousand US$)

0 − 600 60 150 200

600 − 1000 150 375 750

1000 − 2000 250 750 1500

The depth of well is also a consideration. If it does not pay attention to the well integrity issue since
well construction until production, then the cost of P&A will be more expensive. As one of the petroleum
operation, according to PSC, the P&A projects are part of the government project. The government requires
a high quality budget estimation and objective project management process for they project (Prasetya &
Herputra, 2016).
Before excecuting the P&A works, the company goes through the following process to obtain budget
approval and permission to implement P&A project campaigns from the government:
a. Technical meetings with SKK Migas to discuss subsurface condition of the proposed P&A well,
operational procedure of P&A and budget evaluation. These meetings can take around 2 to 4 weeks.
b. Letter of application and documents sent to SKK Migas for recommendations and forward the file to
the Directorate General of Oil and Gas for approval. This will take approximately 2-4 weeks.
c. Meeting with the Directorate General of Oil and Gas and obtaining a letter of P&A approval, will
take up to 6 weeks.

ASR Funds Disbursement

Budget approval and permission is a part of business process chain of ASR Funds disbursement. According
to the current practice, the proposed provision of ASR funds is discussed in work program and budget
meeting and agreed to be put in the budget schedule. The next step is the approval process of P&A
implementation as discussed above. After completing the work, the company submit a request to SKK
Migas for the disbursement of ASR funds by providing complete supporting data. SKK Migas will sign a
joint instruction letter (SIB) for the disbursement of ASR funds and the money from the ASR Joint account
will be transferred to the company account.
PTK 040, 2010 stipulates that requests for ASR fund disbursement can be made after completing each
stage of ASR's work with a SIB and attaching supporting documents in accordance with the PTK, without
having to wait for all ASR works to be completed. In its implementation and to reduce administrative
difficulties, the company waits until all ASR work is completed (each well) and all bills from vendors have
been received (which means the company has made payments to almost all bills).
SPE-193956-MS 5

Based on the historical data of ASR fund disbursement, the time needed for:

• the company internal processes between the completion report submitted and the disbursement
request for funds within 1-3 months.
• SKK Migas evaluate the reports and audit the costs is 3-6 months.

• disbursement of funds since the request revision as a result audit is submitted is 1-3 months.

• the total processing time is 5-12 months

Financial Challenges
The ASR budget has been reserved by the company every semester by depositing funds into the Joint
Account (twice a year). The implementation of ASR activities is carried out with a reimbursement system,
in which the ASR Fund disbursement is carried out later after the work is done. This means that most of
the bills have already been paid by K3S. So that attention should be paid to the time obtaining the technical
report on the implementation of ASR and the examination or evaluation of the submission of ASR funds.
To faster ASR Fund disbursement, company must submit technical reports on the implementation of ASR
on time, ensure all billing costs have been entered, reconciliation of costs after the ASR work is completed.
SKK Migas must run the audit of ASR Fund disbursement requests effectively.

New Regulations
The improvement of regulations regarding ASR is marked by the issuance of Energy and Mineral Resources
Minister's regulation No. 15 of 2018 concerning post-operation activities and followed by the publication
of first revision of SKK Migas guidelines, the PTK 040, 2018 addressing the financial challenges that arise
from current practices. Companies should take the imprest fund ASR gradually to a maximum of 75% of the
approved budget and dilute the remaining funds after the work is completed and the operation and expense
report is approved by SKK Migas.
Comparison of procedures between PTK 040, 2010 and PTK 040, 2018 can be seen in Table 2.

Table 2—Comparison of ASR Procedures

Current Practice
PTK 040, 2010 PTK 040, 2018 Remarks
Financial Procedure Technical Procedure

ASR Planning:
Identification and Cost
calculation.

ASR funds is discussed in ASR Proposal discussed in

work program and budget work program and budget
meeting meeting

Preparation, evaluation and Preparation, evaluation and Preparation, evaluation and

submission of ASR fund submission of ASR fund submission of ASR fund
reserve reports reserve reports reserve reports

Determination of banks that Determination of banks that Determination of banks that

manage ASR funds and manage ASR funds and manage ASR funds and
opening joint accounts opening joint accounts opening joint accounts

ASR fundraising ASR fundraising ASR fundraising

Discussed together with and

Approval process of P&A Approval process of P&A
ASR Implementation ASR Implementation approved by Directorate
implementation implementation
General

Monitored together with

P&A completion P&A completion
Directorate General
6 SPE-193956-MS

Current Practice
PTK 040, 2010 PTK 040, 2018 Remarks
Financial Procedure Technical Procedure

Submit a request to SKK

Post-job technical Gradual ASR Funds
Migas for the disbursement
ASR Funds Disbursement evaluation for close out Disbursement up to 75% of
of ASR funds by providing
recommendation approved budget.
complete supporting data

SKK Migas will sign a joint SKK Migas will sign a joint
instruction letter (SIB) for instruction letter (SIB) for
the disbursement of ASR the disbursement of ASR
funds funds

The money from the ASR The money from the ASR
Joint account will be Joint account will be
transferred to the company transferred to the company
account. account.

Accountability for the
implementation of ASR
Approval of Completion
Accountability for the
Report and Final
implementation of ASR
Expenditures.

Remaining ASR Funds

Disbursement.

Closing the joint accounts of Closing the joint accounts of Closing the joint accounts of
ASR fund ASR fund ASR fund

Conclusions
The oil and gas wells that no longer have hydrocarbon potential and cannot be put on service again in
the future, have wellbore integrity problems, exposed to vandalism and risks for the safety of operations
and the environment are taken into consideration to secure the well by plugging and abandoning or
P&A. The technical review of abandoning of the well refers to SNI 13-6910-2002 and NORSOK D-010
standards. To obtain troubleshooting in effective way or to replace some unpracticable procedures can be
discussed technically and responsibly. Attention to the well integrity issue must be paid carefully since well
construction until production, to prevent the more expensive cost of P&A.
The challenges that arise from current practices of ASR funds can be answered by improving the
procedures and guidelines to ease the disbursement process. The utilization of reserved ASR funds by the
company must be accountable by complying with applicable standards and guidelines.

Acknowledgement
The authors would like to acknowledge the management of SKK Migas for the permission to publish this
paper and also recognize ConocoPhillips (Grissik) Limited and other parties for their valuable supports of
this work.

References
Badan Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi (BPMIGAS). (2010). Abandonment and Site
Restoration (Pedoman Tata Kerja Nomor 040/PTK/XI/2010). Retrieved from https://skkmigas.go.id/images/upload/
file/2016/10/15-PTK-040-2010-Abandonment-and-Site-Restoration.pdf
Badan Standardisasi Nasional. (2002). SNI 13-6910-2002 Drilling operation for safe conduct of onshore and offshore in
Indonesia - Implementation. Jakarta, Indonesia: Author.
Prasetya, A. E., & Herputra, S. A. (2016, October 25). Well Abandonment Project and Recommendation for Applying
Activity Based Cost/Earn Value Management. Society of Petroleum Engineers. doi:10.2118/182441-MS
Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi (SKK Migas). (2018). Abandonment and Site
Restoration (ASR) Revisi 01 (Pedoman Tata Kerja Nomor: PTK-040/SKKMA0000/2018/S0). Retrieved from https://
skkmigas.go.id/images/upload/file/2018/09/PTK_040_2018_Abandonment_and_Sit.%2001.pdf
Standards Norway (2013). NORSOK standard: Well integrity in drilling and well operations (D-010 Rev. 4). Lysaker,
Norway: Author.