Asset decommissioning policy, cost framework, and procedures for an Oman utility
End-to-end decommissioning estimate, governance policy, and standard operating procedures for a regulated utility in Oman, aligned with IFRS provisioning and emerging ESG disclosure expectations.
Client · A regulated utility in Oman
- Output Cost framework + Policy + SOPs
- Standards IFRS · IAS 37
- Disclosure context ESG end-of-life
The situation
A regulated utility in Oman, holding long-life infrastructure assets approaching mid-late operational life, needed to formalise its asset decommissioning approach. Three parallel pressures drove the engagement: regulatory expectations around end-of-life provisioning under IFRS / IAS 37, growing ESG disclosure interest in decommissioning ESG (environmental remediation, social licence, contractual end-of-life arrangements), and an internal governance review flagging that decommissioning policy, cost methodology, and operational procedures had not been formally codified.
Existing decommissioning provisioning was fragmented across legal-entity subsidiaries with inconsistent assumption sets and limited methodology documentation that could survive an audit review.
The work
Decommissioning cost estimate.
- Asset inventory consolidation across operating subsidiaries
- Activity-based costing model for end-of-life work scope (dismantlement, environmental remediation, waste management, restoration)
- Discount rate methodology aligned with IAS 37 provisioning principles
- Sensitivity analysis on cost driver assumptions and decommissioning timing
- Comparison framework against regional and international utility decommissioning benchmarks
Policy framework. End-to-end decommissioning policy covering:
- Trigger conditions for end-of-life planning
- Governance accountability — board, ExCo, operations
- Provisioning methodology and review frequency
- Stakeholder engagement requirements (regulators, communities, contractors, supply chain)
- Environmental and social standards aligned with international utility practice
- Reporting requirements for sustainability disclosure
Standard Operating Procedures. Operational SOPs covering pre-decommissioning planning, contractor management for dismantlement work, environmental remediation protocols, asset disposal and waste management, and post-decommissioning monitoring obligations.
ESG disclosure linkage. Connected the decommissioning provisioning and policy framework to sustainability reporting structure — addressing the increasingly material ESG disclosure topic of end-of-asset-life environmental and social impact.
The outcome
Documented decommissioning cost provisioning aligned with IFRS / IAS 37, governance policy approved at board level, SOPs operational across the asset portfolio, and a defensible audit trail for the ESG disclosure narrative on end-of-life management.
What we’d do differently
- Regulator engagement earlier. Decommissioning costs interact with rate-regulated revenue cycles. Earlier engagement with the regulator on cost-recovery treatment would have shaped the provisioning model design.
- Contractor pre-qualification framework as an explicit deliverable. We touched it within the SOPs; making it a standalone work package would have given the procurement team a clearer launch point for the eventual contractor selection cycle.