ECONOMIC EVALUATION OF TERMINATED UPSTREAM OIL BLOCK: A CASE OF PT âXâ
ABC block is one of oil and gas fields that will be expiry and will be taken by PT ‘X’. This block is mature fields with water cut 95% - 98% and it categorized as depleted phase (declining production). Production facility assets in ABC block has been operating more than 40 years, so it’s resulting a...
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| Format: | Theses |
| Language: | Indonesia |
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| Online Access: | https://digilib.itb.ac.id/gdl/view/42857 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | ABC block is one of oil and gas fields that will be expiry and will be taken by PT ‘X’. This block is mature fields with water cut 95% - 98% and it categorized as depleted phase (declining production). Production facility assets in ABC block has been operating more than 40 years, so it’s resulting a high operating cost. This final project will conduct economical analysis of this terminated block. To analyze the business situation, this research analyzes the external and internal environment of the business by using PESTEL analysis, Porter’s 5 Forces analysis, and SWOT analysis. For the economic evaluation, this research conducts sensitivity analysis to analyze the most sensitive variable, and also this research conducts Monte Carlo Simulation to know the probability of this block to get positive Net Present Value (NPV). Based on the calculation, the NPV of this block resulting a negative NPV for contractor meanwhile for Government of Indonesia (GoI) was positive. Therefore, this research conducts economic evaluation for this block to make this block feasible for contractor. The result of NPV of this block was about -$234 million for the contractor and $475 million for Government of Indonesia (GoI). Based on the sensitivity analysis, six variables were being tested which are Oil production, Sales gas, Oil price, Gas price, Capital Expenditure, and Operating Expenditure. The result says that Operating Expenditure was the most sensitive variable among other variables; the next one is production of oil and oil price. For the Monte Carlo simulation, the result says this block has possibilities to get positive NPV for contractor with maximum NPV about $400 million with certainty about 50%. In summary, based on the calculation, ABC block is not feasible for contractor; therefore this research conducts economic evaluation to make this block become feasible for the contractor. |
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