ECONOMIC VALUATION AND SENSITIVITY ANALYSIS OF TRIPLE-HAS PROSPECT AT PT. PERTAMINA HULU ENERGI OFFSHORE SOUTH EAST SUMATRA BLOCK

• Main Author: Aby Santosa, Ardian
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/46639
• Institution: Institut Teknologi Bandung

Offshore South East Sumatra Block is an active oil and gas block in Indonesia operated by PT. Pertamina Upstream Energy Offshore South East Sumatra (PT. PHE OSES). As a response to issuance of new regulation by the Minister of Energy & Mineral Resources no 8/2017, the management of oil and gas blocks in Indonesia are effectively uses the Gross Split mechanism for the newly signed agreement, thus it is necessary to conduct a study aimed at evaluating future investment viability. The business environment analysis for future Triple-Has Prospect is based on external and internal analysis followed by capital budgeting framework during the economic life of a field under the gross split scheme. The result will be measured by relevant indicators namely Net Cash Flow (NCF), Net Present Value (NPV) and Internal Rate of Return (IRR). The calculation of net cash flow projections generated through the end of PSC period can shows whether the project has a value that is balanced with the risk of investments made. Sensitivity analysis is calculated by evaluating the impact of changes in oil and gas production, oil and gas price as well Capital and Operating Expenditures on the financial forecast of investment in Triple-Has Prospect. PESTEL analysis and Five forces analysis indicate that the oil and gas business is still attractive for PT. PHE OSES especially due to minimum threat of substitute and minimum threat coming from new entrants. To sustain the competitiveness, PT. PHE OSES is recommended to take advantage of the market opportunities through its undeveloped assets, skillful talents, shareholder support and established facilities while anticipating production decline and potential in-efficiency. The methodology used to calculate economic valuation is by cash flow analysis method with economic projections until the end of the work permit in 2038. The economic evaluation results in the Triple-Has prospect show feasible investment results with a potential Gross Revenue of USD 2.090 billion, Net Present Value (NPV) of contractors: USD 110.55 million and Internal Return Rate (IRR) 26.06 %. Oil production control and efficiency of Capital Expenditure and being two most influential factor in the viability study of investment in the Triple-Has prospect, thus it is highly recommended to be the focus of PT. PHE OSES to expand the economic value of Triple-Has prospect.