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Asset Retirement Obligations
9 Months Ended
Sep. 30, 2012
Asset Retirement Obligations  
Asset Retirement Obligations

12. Asset Retirement Obligations

 

The following table summarizes the changes in the Company’s asset retirement obligations:

 

 

 

September 30, 2012

 

 

 

(In thousands)

 

Asset retirement obligations:

 

 

 

Beginning asset retirement obligations

 

$

20,670

 

Liabilities incurred during period

 

 

Revisions in estimated retirement obligations

 

 

Liabilities settled during period

 

 

Accretion expense

 

1,992

 

Ending asset retirement obligations

 

$

22,662

 

 

The Ghanaian legal and regulatory regime regarding oil field abandonment and other environmental matters is evolving. Currently, no Ghanaian environmental regulations expressly require that companies abandon or remove offshore assets although under international industry standards we would do so. The Petroleum Law provides for restoration that includes removal of property and abandonment of wells, but further states the manner of such removal and abandonment will be as provided in the Regulations; however, such Regulations have not been promulgated. Under the Environmental Permit for the Jubilee Field, a decommissioning plan will be prepared and submitted to the Ghana Environmental Protection Agency. ASC 410—Asset Retirement and Environmental Obligations requires the Company to recognize this liability in the period in which the liability was incurred. We have recorded an asset retirement obligation for fields that have commenced production. Additional asset retirement obligations will be recorded in the period in which wells within such producing fields are commissioned.