Managing Decommissioning Risks in Asian M&A Transactions -
By the end of 2026, approximately 134 producing Concessions and Production Sharing Contracts (each, a “PSC”) will have expired in South Asia. It is expected that 900 fields will cease production (with 45% of such fields being offshore), and 800 platforms will require decommissioning. The total cost of decommissioning is estimated at US$100 billion.
In the ordinary course of portfolio management and also to manage debt and operating costs, many of these Concessions and PSCs are currently changing hands. While the usual issues associated with any upstream M&A transaction (whether by acquisition of shares or assets) still exist, the parties involved are increasingly concerned about the allocation of decommissioning risk.
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