Economic Analysis of Offshore Oil and Gas Production Activities Externality on Marine Capture Activities.

Abstract

The offshore oil and gas exploitation activities have significant contribution in fulfilling the world’s oil and gas needs. However, the activities have to face several interest-conflicts with other parties such as marine capture activities that exploited different types of resources on the same location. This study shows that there is negative externality from the fishers’s perception towards the enforcement of safety zone which is located on the radius of 500 meters from the oil and gas production platform. The field study endorsed their assumption that the safety zone has limited their fishing grounds, therefore reducing their income per trip. The result shows that fishing ground’s productivity near the offshore oil and gas production platform area is lower than the productivity in non offshore oil and gas production platform area. On the contrary, the bio-economic analysis shows that the fishing ground productivity near the offshore oil and gas production platform area is higher compared to the productivity in non offshore oil and gas production platform area. The conclusion from both results is that the enforcement of safety zone in offshore oil and gas production platform area affects the marine capture’s productivity in the short run. Meanwhile the safety zone can increase and maintain the productivity in the long run because the production platform is functioning as temporary marine protected area for fish and other creatures in the sea. The findings are also utilized as input factors in designing the alternatives of environmental management model that is beneficial for both activities.