Due Diligence Evaluation of Gas Processing Assets in Sumatra

The Canadian Oil & Gas Company was in the process of acquiring a number of assets in South Sumatra, Indonesia, including: two gas/gas condensate fields with wells and injection wells, gathering pipelines, miscellaneous processing facilities, pipelines and gas transmission line, new loading facilities, and minor processing upgrades. Woodard & Curran provided the client with Health, Safety, and Environmental (HSE), engineering design, construction, and Operational Integrity (OI) assessments to identify issues that could affect the acquisition of these assets.

The Woodard & Curran team evaluated a number of HSE/OI issues. The project status and schedule were evaluated, and it was determined that project engineering, procurement, and construction were approximately 30 to 40 percent complete. An overarching HSE Management System for the full project life cycle did not exist. Key risk management assessments were conducted, as well as an evaluation of procurement management for critical safety equipment and materials. An operational integrity safety assessment process (HAZID, HAZOP, and safety integrity level study) had been applied, but it had been inconsistently implemented.

The project team assessed the status of the Indonesian Environmental Impact Analysis (AMDAL). The EIA/AMDAL was complete for all areas. A monitoring program had been implemented, but it was not in complete compliance with the AMDAL. Woodard & Curran also evaluated the status of permits and the use of unproven or unfamiliar technologies as well as waste management programs, production and contracting processes related to HSE/OI and the ability to influence HSE/OI and operations via the existing joint operation board. The evaluation revealed that the anticipated production stream could contain concentrations of mercury, carbon dioxide, and chloride and that no operations HSE/OI or waste management plans existed.

Woodard & Curran evaluated local socioeconomic concerns and found that no issues existed with indigenous peoples, the local population, or environment. In sum, the client was advised to add or ensure the competency of personnel for construction quality assurance, health and safety, operational integrity, and construction management.

Canadian Oil & Gas Company

South Sumatra, Indonesia




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