UNLOCKING VALUE OF GAS DEVELOPMENT AT BINGKADALU FIELD OF PT NHK THROUGH DECISION ANALYSIS OF COMMERCIALIZATION

• Main Author: Anggraeny, Dewi
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/79430
• Institution: Institut Teknologi Bandung

In year 2017, PT Nusantara Hulu Kalimantan (PT NHK; not the actual company's name) under the Kalimantan Block Work Contract was awarded operatorship from the government with PSC term Cost-Recovery. PT NHK does not operate green fields (new fields). This company operating a field located at East and North Kalimantan, that has reached its mature phase, presents its own challenge in controlling the rate of production decline that occurs due to natural decline. However, there are still several structures in it that have potential but have not been developed by previous operators. One of them is Bingkadalu Field. Bingkadalu as an area which has gas potential that ready to develop, located in the northern part of North Kalimantan, which are geographically very remote from existing production fields (at East Kalimantan). Therefore, for its development, this field needs the nearest gas consumer and must build its own facilities for distributing gas to their consumers. The gas allocation obtained from the Department of Energy and Mineral Resources (released in 2020) states that the potential monetization of gas will be directed to the Methanol Plant on the nearest island (Bunyu Island) which, at the time, had the potential for reactivation. The project has been delayed for a few years mostly due to finding an appropriate price agreement (between PT NHK and Methanol Plant) for the development of this gas potential to improve the economy of marginal blocs. Besides that, as the time went by, the activation of the Methanol Plant has not yet shown clear progress as a company who run the Methanol Plant prefers to buy gas at a price lower than that specified in the POD. This research study discusses how to monetize the potential gas at Bingkadalu field and how to prevent the economy of the PT NHK block from decreasing compared to current conditions when monetizing it. To accomplish this, some of the research objectives were determined. The project’s economics should be recalculated using the latest parameter conditions to obtain the appropriate gas price and then looking for alternative markets become priority because potential buyers allocated by the government have not yet shown clear progress in reactivating the Methanol Plant. After that, conducting negotiations with the government regarding market changes and gas monetization allocations, as well as request changes to the PSC terms to PT NHK. Execute the project with a competitive gas price and additional incentives to the PSC terms is the best alternative solution for this research.