STRATEGY TO OPTIMIZE BUSINESS VALUE OF MARGINAL GAS FIELD IN ONSHORE CENTRAL JAVA

• Main Author: ANGGRAINI (NIM 29316044), INDAH
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/28019
• Institution: Institut Teknologi Bandung

The upstream oil and gas industry both globally and domestically, has experienced dramatic volatility. In 2008 Brent Crude reached $140 per barrel and in 2014 it was trading at around $110 per barrel. By January 2015 until 2016, the price had dropped to around $40 per barrel. This sudden and significant fall have a profound and complex effect on the entire industry that affecting the economics aspects of the upstream projects in terms of investment especially in Indonesia. In the middle of those declining world oil price, it is Government of Indonesia intention to start reducing the dependencies towards crude oil. One of the most feasible alternative to be focused on is gas industry. <br /> <br /> PHE Randugunting is one of the subsidiaries of Pertamina Hulu Energi (PHE) who managed Randugunting Block which located at Rembang, Central java. Currently, company’s position is in the transition phase from exploration to development and production phase. After succeed to discover gas and condensate in RGT-2 Well, company faces several challenges to develop gas field such as marginal gas reservoirs, lack of gas infrastructure, limited time to the approval of plan development, total sunk cost, and limited coverage area after 3rd relinquishment. Strategy to optimize business value of marginal gas field need to be created in order to accelerate gas monetization, and maintain the blocks & potential resources in the future. <br /> <br /> Strategy Establishment started by understanding the business situation comprehensively. External and internal analysis has been conducted to obtain better understanding of PHE Randugunting situation. The external analysis that being used is PESTEL and Porter’s Five Forces, while the internal analysis using the resource-based view, The Value Chain Analysis, and 7P marketing Mix as it tools of analysis. By analyzing these factors, the strength, weakness, opportunities, and threat that revolving around PHE Randugunting has been known and being represented in the form of SWOT analysis. The result from SWOT analysis as well as FGD session, benchmarking, and literature review is used as input for strategy formulation. <br /> <br /> Corporate strategy alignment through performance management system succeed to bring the company formulate key performance indicator and strategy but still in line with holding company strategy. To obtain proper development concept, investment business value analysis is conducted through several parameters such as internal rate of return, profitability index ratio, payback of time and net present value that also supported by focus group discussion, internal study and benchmarking process to get comprehensive results <br /> <br /> Regarding commercialization and marketing strategy, the analysis of Segmentation, targeting, positioning and differentiation has been conducted and support by gas buyer selection using Small Multi Attributes Rating System that needed to helps Top Management decide and rating the potential gas buyer that ready and qualified with related attributes or criteria are legal administration, commercial, financial, technical & operational, HSE Management System, Partnership with Local Government and Gas price Offer. At the end, new business model canvas is generated to describe new business model post transformation into production phase. Since company has limited time to monetize gas, it is necessary to focus on the commercialization and marketing process to accelerate asset monetization.