This research aimed at determining whether the Malaysian regulatory landscape governing the offshore decommissioning of petroleum facilities is adequate to face the scale of offshore decommissioning activities that will involve Malaysia, or whether it may need to be reviewed and inspired by the more established and long-standing UK’s offshore decommissioning regime and practices. The researcher estimated that 195 offshore installations will undergo decommissioning in Malaysia by the year 2025, with a growth of offshore decommissioning activities equal to 244.4% over a ten-year period. Nevertheless, Malaysia has not yet promulgated any national decommissioning regulations for the oil and gas (O&G) industry – it only relies on the guidelines provided by its national oil company (NOC) PETRONAS.
However, both these guidelines and the current Malaysian oil production-sharing contract (PSC) appear to be lacking guiding principles, and seem to be allowing international oil companies (IOCs) to escape their legal and financial responsibilities associated with offshore decommissioning. In light of these information, therefore, a comparison was carried out between the British and Malaysian offshore decommissioning scenarios, and possible improvement actions to the Malaysian legal and practical framework, inspired by the British one, were proposed by the researcher.
Table of Contents
1.0 INTRODUCTION
1.1 RESEARCH BACKGROUND
1.2 OVERVIEW OF OFFSHORE DECOMMISSIONING IN MALAYSIA AND IN THE UK
1.3 RESEARCH AIM, OBJECTIVES AND QUESTIONS
1.3.1 Research aim
1.3.2 Research objectives
1.3.3 Research questions
1.4 RESEARCH STRUCTURE
2.0 LITERATURE REVIEW
2.1 UNDERSTANDING DECOMMISSIONING
2.2 BRIEF HISTORY OF WORLDWIDE OFFSHORE DECOMMISSIONING WITH A LOOK AT FUTURE PROSPECTS
2.3 OFFSHORE DECOMMISSIONING OPTIONS
2.4 OFFSHORE DECOMMISSIONING INTERNATIONAL LEGAL REQUIREMENTS
2.5 THE UK’S EXPERIENCE
2.5.1 Overview of the UK’s offshore decommissioning legislation
2.5.2 Overview of the UK’s offshore installations and decommissioning practices with a look at future prospects
2.6 MALAYSIA’S EXPERIENCE
2.6.1 Overview of Malaysia’s offshore decommissioning legislation
2.6.2 Overview of Malaysia’s offshore installations and decommissioning practices with a look at future prospects
2.7 KEY FINDINGS
2.7.1 What has been researched?
2.7.2 What are the research gaps?
3.0 METHODOLOGY
3.1 INTRODUCTION
3.2 RESEARCH DESIGN AND METHODOLOGY
3.3 DATA COLLECTION METHOD
3.4 ANALYTICAL PROCEDURE
3.4.1 How to estimate the scale of offshore decommissioning activities in Malaysia over next decade?
3.4.2 How to determine the practical impact of Malaysia’s offshore decommissioning legislation’s weaknesses?
3.4.3 How to suggest lessons on offshore decommissioning regulation and implementation that Malaysia could learn from the UK’s experience?
3.5 RESEARCH LIMITATIONS
3.5.1 Limitations in achieving objective I
3.5.2 Limitations in achieving objective II
3.5.3 Limitations in achieving objective III
4.0 RESULTS AND DISCUSSION
4.1 INTRODUCTION
4.2 RESULTS ANALYSIS
4.2.1 Estimated offshore decommissioning activities in Malaysia over next decade
4.2.2 Weak in theory and practice
4.2.3 Comparison study of the British and Malaysian offshore decommissioning regulation and implementation
4.3 KEY FINDINGS
5.0 CONCLUSION AND RECOMMENDATIONS
5.1 CONCLUSION
5.2 RECOMMENDATIONS
Research Goals and Thematic Focus
This research aims to determine the adequacy of the Malaysian regulatory landscape for offshore decommissioning in light of the projected increase in activities, evaluating whether the UK’s established regulatory framework can serve as a model for improvement.
- Estimation of future offshore decommissioning scale in Malaysia by 2025.
- Identification of weaknesses in the current Malaysian regulatory framework and their practical implications.
- Comparative analysis of British and Malaysian decommissioning regulations and implementation.
- Formulation of policy recommendations for Malaysia based on international best practices and the UK experience.
Excerpt from the Book
2.2 BRIEF HISTORY OF WORLDWIDE OFFSHORE DECOMMISSIONING WITH A LOOK AT FUTURE PROSPECTS
Decommissioning is a relatively new issue to most oil producing countries, reason why the level of expertise in building platforms today remains greater than the one in decommissioning them (Ferreira et al. 2004:1175, Parente et al. 2005:1992). In fact, while offshore installations exist since the 1920s, first platforms to be disposed date back to the last quarter-century, with the most complex structures to be decommissioned starting from the 1990s (Athanassopoulos et al. 1999:iii, Parente et al. 2005:1994). Moreover, despite offshore installations must be decommissioned at the end of their service life, most of them were not designed to be removed (Parente et al. 2005:1994). First information about the issue of an offshore structure decommissioning programme, date back to 1988, when the Piper Alpha platform located in the North Sea was toppled (DECC 2015a). In July 1988, a gas leakage from one of the condensate pipes at the Piper Alpha platform, coupled with a series of unfortunate circumstances such as communication errors, a pressure safety valve removed as part of the routine maintenance, temporary sealing of the condensate pipe, etc., led to gas ignition and consequent explosion, killing 167 workers out of 226 (Offshoretechnology 2014).
Following this accident, a decommissioning programme was submitted to and approved by the Department of Energy and Climate Change (DECC) the same year (DECC 2015a). Ever since, due to the progressive aging of installations which have reached their productive and economic limit, and due to more stringent and complex legal requirements, offshore decommissioning programmes and operations have grown in number, with between 250 and 350 offshore platforms decommissioned globally since 1987 (Mokhtar 2014:2, Schlumberger 2001:28). Mokhtar (2014:41), Osmundsen and Tveterås (2003:1580), Parente et al. (2005:1995), Schlumberger (2001:28) and many others agree on the fact that decommissioning will play a major role in the global O&G industry in the coming decades. In particular, Pittard (1997) estimates that 97% of the World’s offshore platforms, which according to Ayoade (2011:3) are over 7,300, will undergo decommissioning (Figure 2.4).
Summary of Chapters
1.0 INTRODUCTION: This chapter introduces the topic of offshore decommissioning in Malaysia and the UK, outlining the research background, aim, objectives, and structure.
2.0 LITERATURE REVIEW: This chapter summarizes existing knowledge on offshore decommissioning, including international legal requirements and detailed experiences from the UK and Malaysia to identify research gaps.
3.0 METHODOLOGY: This chapter describes the research design, a mixed-method approach, and the data collection and analytical procedures used to address the research objectives.
4.0 RESULTS AND DISCUSSION: This chapter presents the estimates for decommissioning activities in Malaysia, identifies regulatory weaknesses, and provides a comparative analysis with the UK.
5.0 CONCLUSION AND RECOMMENDATIONS: This chapter synthesizes the research findings and provides specific policy recommendations for improving the Malaysian regulatory landscape for offshore decommissioning.
Keywords
Offshore decommissioning, Malaysia, United Kingdom, Oil and Gas industry, Regulatory landscape, Petroleum Act, PETRONAS, Environmental Impact Assessment, Liability, Cost recovery, Decommissioning programme, Offshore platforms, Comparative analysis, Safety, Sustainability.
Frequently Asked Questions
What is the core focus of this research?
The research focuses on evaluating whether Malaysia's current regulatory framework is sufficient for the upcoming wave of offshore decommissioning and proposes improvements based on the UK's established experience.
What are the primary thematic areas explored?
The study examines the legal aspects of decommissioning, the estimation of future platform decommissioning in Malaysia, environmental and safety risks, financial liability, and the comparative performance of UK and Malaysian regulatory bodies.
What is the primary objective of this study?
The main objective is to assess if the Malaysian regulatory regime is adequate for the scale of offshore decommissioning by 2025 and to determine if the UK’s regime can serve as a model for policy improvements.
Which research methodology is applied?
The researcher uses a mixed-method approach, utilizing quantitative data to estimate future decommissioning scale and qualitative analysis to assess the practical impact of legislative weaknesses and identify comparative lessons.
What is covered in the main body of the work?
The main body covers a comprehensive literature review of decommissioning, a detailed methodology chapter, an analysis of the projected growth in Malaysian decommissioning, and a comparative study between Malaysian and British regulatory practices.
Which keywords characterize this research?
Key terms include offshore decommissioning, Malaysia, UK regulatory landscape, PETRONAS, safety, environmental impact, liability, and comparative analysis.
What are the practical implications of Malaysia's current lack of specific decommissioning regulations?
Without specific national legislation, the study highlights risks such as environmental contamination, potential health and safety hazards for personnel, undefined liability for contractors, and the possibility that costs might unfairly fall on Malaysian taxpayers.
What is the significance of the 2025 projection of decommissioning activities?
The estimate of 195 platforms requiring decommissioning by 2025 highlights the urgent need for a robust and clear legal framework to manage the associated environmental, financial, and operational risks effectively.
How does the UK's experience differ from Malaysia's?
The UK has a long-standing, sophisticated regulatory framework developed since 1988, whereas Malaysia relies on guidelines from its national oil company, PETRONAS, which the research identifies as lacking specific legal enforceability and detail.
- Citation du texte
- Sarah Wafiq (Auteur), 2015, Offshore Decommissioning in Malaysia. Lessons from the UK’s Regulatory Landscape and Implementation, Munich, GRIN Verlag, https://www.grin.com/document/338540
