Decommissioning Project in Malaysia: How It Became Valuable and Successful
Authors: Mohamad Mahathir , Daud Siti Shafikah Md 
Published: March 2018

As of early 2017, PETRONAS has approximately 40% of aging platforms & pipelines that aged more than 30 years. As a party to UNCLOS, Malaysia is legally bound to undertake Decommissioning of its asset. Internally, apart from PETRONAS’ existing Procedure and Guideline for Upstream Activities (PPGUA) that spell out the recommended decommissioning principles, PETRONAS has devised a new set of decommissioning review process, known as Abandonment Review (AR) to ensure PETRONAS get the optimum levels of assurance its require from the operator/contractor. The deliberation of every decom project application is according to the type of scope of works which covers wells plug & abandon, pipeline/floaters or integrated facilities.

Following the downturn in crude oil prices and major decline in oil production for some of its fields, PETRONAS had to further evaluate and finally decided to decommission one of its Small Field Risk Service Contract (SFRSC) field, specifically Kapal Field. Upon PETRONAS’ review & approval process completed, execution phase commenced with the least complicated scope of work, which consist of Plug & Abandon (P&A) of 4 wells, detachment of wellbay support structure (WSS), retrieval of mooring chains, anchors and flexible pipeline, and relocation of MOPU for warm stack/cold stack purposes. However, during Project Risk Assessment exercise, relocation of MOPU was identified as one of the critical path as it involves integrity of the existing MOP and as such posed a high risk to the whole cost and schedule of the project.

Since decommissioning of upstream facility consider as a niche subject in Malaysia, educating of various internal and external stakeholders was required in order to establish the key steps for the decommissioning execution. Liaising with related state agencies was done through Exclusive Economic Zone sitting, with Petroleum Safety Unit's (PSU) as the secretariat. PSU is one of the unit under Ministry of Domestic Trade, Cooperative and Consumerism (MDTCC) which responsible in coordinating the policies, licensing, regulations and activities related to the safety of petroleum, petrochemical and gas industry in Malaysia.

There were plenty of great experiences and important lessons that PETRONAS learned in this project which PETRONAS thought worth to share with the industry. PETRONAS believes that through each successive failure in what we're doing, our values were reshaped. Even though this decommissioning activity was a schedule-driven project, cost optimization always becomes the key condition for making project management decisions. Not to mention on PETRONAS’ aspirations to contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders, collaboration and Memorandum of Understanding (MOU) achieved between PETRONAS and Department of Fisheries (DoF) in Rig-to-Reef Program had opened up a new perspective on how PETRONAS’ decommissioning activities can contribute towards its corporate social responsibility (CSR) program.