ECONOMIC ANALYSIS OF BURR FIELD DEVELOPMENT PROJECT WITH GROSS SPLIT MECHANISM

• Main Author: Arya Pradana, Candra
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/51962
• Institution: Institut Teknologi Bandung

Burr oil field is one of the largest oil production contributors to the Rokan block of Indonesia, meanwhile Rokan block is a contributor to approximately 30% of the national production. This field has a long history of development, especially drilling new oil well. The project team always makes continuous improvements based on best practices and lessons learned to increase confidence level of management and also reduces the level of uncertainty for project execution. The project team then conducts an economic valuation study for development project in Burr field based on Gross Split mechanism that will be applied in this block starting in 2021. The economic indicators to be used for investment analysis are NPV, ROR, POT and DPI. Investment costs include capital expenditure (CAPEX) and operating expenditure (OPEX). Capital expenditure covers road and access cost, drilling costs as well as pipe installation costs. While operating expenditure include the cost of lifting oil from below the surface, costs for processing fluids and transportation costs to the final point of sale. From the economic analysis, it is shown that the results of this base case development project will have NPV of $ 1,456 M, DPI 1.15, IRR 24%, and a PBP of 3.27 years. This result concluded that field development project using horizontal wells in Gross Split mechanism is still very visible according to economic parameters. And from the sensitivity analysis it was found that the factors that most influence the economic value of the project are the calculation of oil prices and CAPEX.