DECISION ANALYSIS AND RISK EVALUATION MODEL ON SELECTING PSC COST RECOVERY VS GROSS SPLIT FOR BLOCK EXTENSION: A CASE STUDY PANCA BLOCK AT PT. SAKE

• Main Author: Lukman Hakim, Arief
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/86540
• Institution: Institut Teknologi Bandung

Oil and gas industry in Indonesia started in the early of 19th century by drilled an exploration well in 1871 under concession contract agreement, since then various of contract type introduced such as concession contract agreement, contract of work and well-known existing contract model of production sharing contract (PSC) cost recovery. In 2017, government introduces new PSC scheme model of gross split as an alternative scheme model for expired block, block extension and new block offering to improve the sharing split revenue and annulled of cost reimbursement model. There are various pros and cons of feedback, revision was done several times to ensure its attractiveness compared to the existing cost recovery. Since then, selecting the best PSC between two scheme models based on comparison of the economic value of the block. There are not many explanations on the principle of both scheme model works, the reason of implementation new scheme model, the advantages and disadvantages and its effects to the investment climate in oil and gas industry which will determine the revenue for government and the contractor. Decision analysis to select best scheme model introduced using system thinking model of causal loop diagram through methodology of qualitative analysis to understand the current complex condition of both scheme model, explore the relationships through feedback loops analysis and determine the critical variables. The analysis concludes about nine vs eleven critical variables (PSC cost recovery vs gross split) influenced the decision making. Case study of Panca block evaluate for block extension purposed using comparison analysis through the four area of interest within block: producing fields, new field development, discovery area and prospects & leads which shown the gross split is best option for the existing producing fields while cost recovery for the other three of area interest. Based on evaluation, it is recommended to select PSC cost recovery as best scheme model for block extension.