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PT AEI Preferred Alternative Project on “X” Field in Near Expiration of PSC Indonesia Contract Period Referring to Investment Analysis

Dody Hartawan, Achmad Herlanto Anggono


PT AEI (Andalan Energy Indonesia) as oil company have been working under PSC Indonesia and reaching near contract expiration in 2021. To meet obligation as Contractor to deliver agreed oil production, PT AEI shall find a “way” to maintain or to reduce declining oil production rate by adding oil reserves but still generating profit to the company. Near expiration of contract, corporate economic hurdle requirement, and need for oil production obligation are main issues to be resolved in current PT AEI business condition. One of alternative which likely suits to PT AEI situation is a project to convert idle injector well to become oil producer well on “X” field. Comprehensive investment analysis should be developed to prove that the project sufficiently profitable comparing to other competing projects. DCF and key economic indicators (NPV, IRR, PBP, DPI, and VC) are utilized to analyse project economic. Cross function decision makers are involved in approval process for the project to be proceeded or not. It consists of Asset team management, Drilling and Completion team management, and Facility team management. Extended decision makers may be added as required.

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