IMPROVING THE DECISION-MAKING PROCESS IN OIL AND GAS DEVELOPMENT WITH A CONTEXT-BASED CAPITAL VALUE PROCESS

• Main Author: Yananto, Hanto
• Format: Dissertations
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/66932
• Institution: Institut Teknologi Bandung

State-owned enterprises are complex organizations that are generally staid, hierarchical, and bureaucratic. Long dynamic investment stages often result in the postponement of oil and gas development projects, resulting in the loss of early production possibilities and an increase in capital expenditure. The current decision-making process may not correctly value the initiative associated with oil field development, creating uncertainty and resulting in investment choices being rejected. Thus, research was conducted to ascertain if the decision-making process was differentiated in accordance with the criteria and complexity of the proposed development project in comparison to the current project. On the basis of the stagegate theory of new product development, a new context-based and scalable stagegate model for the oil and gas sector was then established. This study illustrates how a combination of soft system methodology-based action research and system dynamics may be used to enhance the decision-making process for state-owned oil and gas companies. The data for this project was collected through observation at various decision gate review meetings and technical assessment meetings, as well as through semistructured interviews with stakeholders involved in the decision-making chain for business development projects. In conducting the action research, two cycles of research were carried out. In the first cycle, data collection occurred through interviews and questionnaires with several stakeholders involved in the decision-making system. Data analysis indicates that digital transformation must be implemented in an integrated manner to reduce repetitive work. Based on modeling of the soft system, there is an exceptionally large reduction in review time, which has a positive impact on the implementation of the proposed project. Digital applications for architectural systems in accordance with the modeling results in soft systems are also developed and applied to the business development project proposal review process. However, when applied directly to the current system, there remain obstacles in decisionmaking with stakeholders. Implementation in the first cycle is accomplished by changing the process flow in the existing decision-making application. The application update process was successfully implemented at UEC in the hope that the actualization would run according to the simulation results in the modeling. The obstacle was the commitment of each stakeholder to run the business processes entirely digitally. The difference in the commitment of each stakeholder was what produced actual results different from the simulation. The findings in the first cycle became input for the second cycle, so that, in the second cycle, data collection was carried out by in-depth interviews with a wider range of stakeholders, prioritizing the role of decision makers in their respective functions or directorates. Implementation of the second cycle is done by first making changes to the company's business processes. Modifying the step-by-step model from product development to a staged gateway, taking into account the context of the oil industry, results in simple projects being granted special privileges for project submission with a much simpler approval stage. After the business process is successfully modified, changes to the decision-making application are made to adapt the new business process. The findings suggest that the number of review cycles in the decision-making process decreases dramatically as projects are subdivided by complexity, ensuring the project receives critical and limited resources and lowering the overall time required to complete the project. By contrast, certain bottlenecks remain at the intermediate and upper stages of the decision-making process. An important conclusion of this research is that management decision-making will benefit by delegating some technical review activities from subholding to regions and delegating financial authorization one level from the existing thresholds. Keywords: Capital Value Process; Stage-Gate; Action Research; Soft-System Methodology; System Dynamics.