Economic Analysis of Burr Field Development Project with Gross Split Mechanism
| Main Authors: | Pradana, Candra Arya; School of Business and Management, Institut Teknologi Bandung, Anggono, Achmad Herlanto; School of Business and Management, Institut Teknologi Bandung |
|---|---|
| Format: | Article info eJournal |
| Bahasa: | eng |
| Terbitan: |
The Indonesian Journal of Business Administration
, 2022
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| Online Access: |
https://journal.sbm.itb.ac.id/index.php/IJBA/article/view/4424 |
Daftar Isi:
- The project team conducts an economic valuation study for development project in Burr field based on Gross Split mechanism that will be applied in this block starting in 2021. Technical analysis was conducted to forecast oil production and estimate reserves. Revenue than generated from production forecast and oil price projection. The economic indicators to be used for investment analysis are NPV, ROR, POT and DPI. Investment costs include capital expenditure (CAPEX) and operating expenditure (OPEX). From the economic analysis, it is shown that the results of this base case development project will have NPV of $ 1,456 M, DPI 1.15, IRR 24%, and a PBP of 3.27 years. This result concluded that field development project using horizontal wells in Gross Split mechanism is still very visible according to economic parameters. And from the sensitivity analysis it was found that the factors that most influence the economic value of the project are the calculation of oil prices and CAPEX. Future research is necessary to be done in order to optimize expenditure especially in drilling operation. Key words: Economic analysis, Profitability Indicator, CAPEX, OPEX, Oil Field Development