15 JULY 2020

A New Initiative to Reutilize

Abandoned Offshore Platform for
Marine & Fisheries Sectors

International Webinar: “Marine and

Fisheries Roles in Energy Sector
 Outline

• Offshore Platform Distribution in Indonesia and their status

• Decommissioning Plan in Indonesia and the situation
• The Challenge of Offshore Platform Decommissioning in Indonesia
• Offshore Platform Utilization Options
• Rig to Reef
• Rig to Fish Farm
Offshore Platform and Marine Conservation Areas

Source: KKP-DG Spatial Management

Indonesia has more than 600 offshore oil and gas platforms and around 80 percent of them are
more than 20 years old, therefore needs to be planned the decommissioning roadmap

Stakeholders seek ways (both technical and administrative) to reduce the costs while at the
same time find a multiplier effect solution
Decommissioning Plan in Indonesia
• Coordinating Ministry stated that nearly 100 platforms are
need to be decommission
• The estimated cost to decom 1 platform is 7,000,000 USD
• Liability on decom cost of USD 700 Mil will be decided
soon;
• 10 platforms will be decommissioned as a pilot project
within one year due to obstructing ALKI 1 & 2 Lanes;
• Indonesian governments are assessing the possibility of
reusing the platform as an artificial reef, aquaculture, tourist
attraction, navy station etc.
 D n-m
D0

EXISTING REGULATIONS

SAFETY ASPECT: PP NO 17/1974, UU NO 17/1985, IMO INTL GUIDELINE 1989,, UU NO POSTPONING PLATFORM
17/20008, PERMENKESDM NO. 01/2011, PM NO. 68/2011, PM NO. 71/2013, SNI 13- REMOVAL (PPR)
6910-2002, MEMR NO 15/2018. ENVIRONMENTAL ASPECT: UU NO. 32/2009, PP NO.
27/2012, PP NO. 21/2010. ASSET ASPECT: PP NO. 38/2008, FMR NO. 135/
PMK.06/2009

1. Removal method
2. Reefing site
3. Well P&A
1. Approval for Removal 4. Pipeline Abandonment
2. Project Execution Plan 5. Government and Local Authorities approvals
6. EIA

Pre-Asset Asset Project Dismantle

Planning Permitting Bidding
Write Off Write Off PASCA
PEMBONGKARA
Post Decommissioning
N
PERIOD BEFORE DECOMMISSIONING POST
DECOMMISSIONING
TAX COST, MAINTANANCE COST, IDLE, ABANDONED

1. Identify/Grouping of 1. Project Execution Plan 1. Prepare Scope of Work

the Platforms 2. Project Schedule 2. Terms and Conditions
2. P/F Data Collection 3. Cost Estimation 3. Other Contract Document
3. Site Survey & P/F 4. Project supporting team 4. Project Specifications
Inspection 5. Decommissioning FEED 5. Prepare RFQ’s
Engineering 6. TBE/CBE
7. Award Project

PRINCIPAL ACTORS SUPPORTING ACTORS

MINISTRY OF ENERGY AND MINERAL RESOURCES, MINISTRY OF FINANCE, MINISTRY OF TRANSPORTATION, MINISTRY OF MARINE AFFAIRS AND FISHERIES
MINISTRY OF ENVIRONMENT AND FORESTRY, SKK MIGAS, OPERATORS AND OTHER STATE INSTITUTION
 Challenges

• Cost spending, no budgeting support and no economic benefit

• Lack of experience and decommissioning plan
• Limited shipyard and waste recycling facilities
Offshore Platform Utilization
Options
GOALS:

• To reduce the cost of decommissioning;

• To added value for marine and fishery sectors.

LOW COSTS* HIGH BENEFITS**
01 
Rigs-to-Reefs [R2R]

Post
Decommissioning HIGH COSTS HIGH BENEFITS
Post
[7 P/F Decommissioning
PHKT & 14 P/F ONWJ]
02  Rigs-to-Farm [R2F]
1. Collect, Identify & group of the
platforms
2. P/F data assessment Added Value:
3. Site survey & P/F inspection Re-utilization
4. Feasibility study Options
5. Preliminary cost estimation and
approvals
HIGH COSTS LOW BENEFITS
03
Sea Adventure, Renewable Energy Hub and Fish Cold
Storage

LOW COSTS LOW BENEFITS

04
Low cost alternatif Research Station, Military Base
Cost Reduction

* Cost after decommissioning [i.e. monitoring R2R, modification top side cost etc.]

** ECONOMIC BENEFITS after decommissioning [environmental and stakeholders]

 • R2R: The practice of converting decommissioned oil and gas rigs into artificial reefs;
Rig-to-Reef • A method used to reduce the cost of decommissioning as well as promoting the fisheries
resources in surrounding areas as coral and coral reef habitat;
• Several countries have implemented this method such as US (Louisiana, Texas, Mississippi,
California). They have donated and converted more than 420 rigs [+10% of total offshore rigs];
• Its reported that 10,000-30,000 adult fish reside in an area about half the size of a football
field;
• Korea has been investing in artificial reef technology and implementation since 1970 with USD 2
billions budget;

Lesson learned from Gulf of Mexico

1. Operators race to donate the abandoned asset for artificial reefs [more than 400 rigs since 80s];
2. Fish biomass and density and around the standing oil and gas platform are higher than the artificial reefs or natural
reefs
3. Potential benefits:
• For the environment, enriches the marine life in the area by providing them habitat, shelter, food and other necessary
elements for biodiversity and productivities ocean as well as the population connectivity;
• For oil and gas companies, save the costs of removing, transporting and disposing them onshore;
• For government (both central and local), attract marine life that enhances fisheries and contribute to the economy
and enlarge the conservation areas
Adopted from GOM case, the criteria for suitable reefing areas are:
EAST KALIMANTAN
• Suitable depth clearance [30-40 m];
• Slope [less than 1-3 deg.];
2

Karang segajah
• Seabed substrate [hard substrate];
• Distance from shore [< 12 nmil]
• Fit with the zonation plan [exclusion map]; Candidate reefing sites

• Influence by the natural source [coral & coral fish];

• Good sea water parameters.
1
NORTH JAVA SEA

KKPD BONTANG

Ex-situ R2R

• Due to the existing regulation, the structures will be cut and towed outside the oil and gas field and
placed in a conservation area;
• The placement is by design and how make it differentiate with dumping activity
Rig-to-Reef Discount rate (%)
Future value (%)
Components Value
4.02
5.98
Cost of R2R (Million Rupiah) 437548.08
Insurance (Million Rupiah) 8750.96
Management and documentation costs 13126.44
(Million Rupiah)
Detail engineering costs (Million Rupiah) 17501.92
Contingency costs (Million Rupiah) 65632.21
Value added tax (10%) 54255.96
Infrastructure (Million Rupiah) 400.00
Area management costs (Million 250.00
Rupiah/Years)
Long-term monitoring costs (Million 150.00
Rupiah/Years)
Procurement services/production (Million 1290.27
Rupiah/Ha/Years)
Management Cost (Million Rupiah/Ha/Years) 3309.73
Cultural/information services (Million 3564.43
Rupiah/Ha/Years)
Supporting/habitat services (Million 356.10
Rupiah/Ha/Years)

Fish aggregating devices cost (Million 4380.00

Rupiah/Years)
PES (Million/person/diving) 0.06
Economic impact of dive tourism 2.35
(Million/person/diving)
Number of divers (person/years) 100
Growth number of divers (%) 5
Saving Maintenance cost (Million RP/year/7 20250
platforms)

Area of reefing (m2) 7875.00

Duration 11
No Feasibility components Value Unit Feasibility
1. Net Present Value (NPV) 859637.46 Million Feasible
Rupiah
2. Net Benefit-Cost Ratio 2.58 Feasible
(NCBR)
3. Internal Return Rate 10.32 % Feasible
4. Pay Back Period (PBP) 11.61 Year Feasible
 Introduction and Background
Offshore Fish Farm • President Jokowi has high interest in Offshore Aquaculture
• Topside can be modified to install supporting facilities and Jacket can be used as a mooring point for
fish cages
Considerations
• Experience pilot project with Norway using floating cages – Need to consider Submergible Cages
• Weather and marine environments are different, thus uncertainties when adopting Korean
aquaculture model

• Using the Offshore Platforms as a mooring point,

aquaculture facilities can be installed on the surrounding
area of the platform;

• Compared with 50~60% survival rate of onshore

aquaculture, offshore aquaculture shows around 95%
survival rate which is highly economical;

• Accessibility to the platform is the key factor

• We have developed three different scenarios and their economic calculations [1 cage, 4 cages and 10 cages] with cultivated
species tiger grouper, snapper or tuna;

• Each scenario has different economic gain in the period of 10 years to reach the Break even Point [BEP];

22 miles off coast of Mississippi in the GOM

The University of New Hampshire’s offshore installation design

10,000 m3 double ring HDPE 30 m diameter net pen moored between two
platforms off of the central Texas coast in 1990
Submersible cage [Aquatec-Indonesia]
 Sea Station
Type (Model) Cultured Fish Diameter Height (Spar) Volume Cultured Remark

Sea-Station 3000 Tiger-Grouper 25.20 m 15.30 m 3000 m2 120 ton

Sea-Station 5400 Tiger-Grouper 33.45 m 20.70 m 5400 m2 200 ton Recommended

Sea-Station 6800 Tiger-Grouper 34.00 m 24.00 m 6800 m2 250 ton

Sea-Station 20000 Bluefin-Tuna 39.60 m 24.00 m 20,000 m2 225 ton Recommended

Spar

Rim

Harvest cone

Ballast weight
 01 NO CLEAR LAW ENFORCEMENT

02 ASSET STATUS
Post Decommissioning
Issues on
Post Re-utilization
Decommissioning Options 03 LACK OF FINANCIAL SUPPORT

04 NO NATIONAL ACTION PLAN FOR

Artificial Reefs

05 RESTRICTED & PROHIBITED

Oil and Gas Areas / Spatial Zones

REGULATORY CHANGED
06
Required to use P/F for non petroleum operations

Scientific Evidence in the surrounding areas of P/F is compulsory to find an answers for
the policy debate over R2R [foster abundant marine life populations or not, generate
revenue for marine conservation/community/state or not, reasonable liability for
company or not, the environmental condition support or not, etc.] as well as R2F
Thank You

Email: aushafrizal@kkp.go.id