ECONOMIC AND ASSET OPTIMIZATION TO ENHANCE PROFITABILITY OF XSW OFFSHORE BLOCK PT. PERTAMINA EP

• Main Author: Rosa Setra Wiguna, Raden
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/67318
• Institution: Institut Teknologi Bandung

Indonesian oil and gas production decreased in the last decade. The majority of current oilfield producer backbone located onshore was mature field category and going to depletion phase. Meanwhile, exploration activities have not found new significant economic oil and gas reserves, then one of the efforts that can be made is to asset optimization the existing oil reserves that still have economic value. To overcome this condition, there has been a shifting paradigm by the upstream company to change focus in oil and gas development field from onshore to offshore oilfields. XSW offshore block already produced oil of 41.39 MMSTB and had 7.9 MMSTB remaining reserves. The project’s purpose is to create XSW development scenario to enhance its profitability with Environmental Social Governance (ESG) principle, and to evaluate project economics through Production Sharing Contract (PSC) cost recovery scheme. Project economics evaluation in this research used the capital budgeting method that are will calculate and reviewed on the aspect of net present value (NPV), internal rate of return (IRR), payback period, and cashflow analysis. The calculation also referred to the Production Sharing Contract (PSC) term of scenario that are ruled by the government. The scenario applied sensitivity analysis of oil price, oil production cumulative, operational and capital expenditure. The best scenario can generate 7.3 MMSTB incremental oil production, a total investment of 81.31 million USD, gross revenue of 495.52 million USD, a company’s profit of 57.73 million USD, and government profit of 86.6 million USD. From the capital budgeting perspective, the project can generate an NPV of 18.58 million USD, an IRR of 20.77%, payback period of 5.42 years.