Financial Feasibility Study of Oil and Gas Well in Indonesia Case Study: New Oil and Gas Well in PT ABC



Abstract Views
1251

Downloads
1029

Citations

Share

##plugins.themes.bootstrap3.article.sidebar##

Submitted Nov 25, 2020
Published Jan 4, 2021
10.24018/ejbmr.2020.5.6.626

Abstract viewed = 1251 times

Table of Contents

##plugins.themes.bootstrap3.article.main##

PT ABC is a subsidiary of PT PXZ (state owned companies under SKK Migas and PT Pertamina supervision) which is engaged un upstream sector in Indonesia. Seeing the continuing decline in oil and gas reserves in Indonesia and increasing demand, the government request all upstream company to find more source. PT ABC is trying to continue to increase production of oil and gas by opening a new potential project. Revenue sharing will use the gross split method. The purpose of writing this final project is to help PT ABC analyze new projects that will be undertaken. The analysis is carried out by looking at the business situation externally and internally and will be followed by economic analysis and risk analysis to identify the factor that has impact of the project. External analysis shows that the oil and gas industry is still an attractive industry for the government to run and support. However, in its implementation the company have to follow the applicable regulations since oil and gas industry are one of the strategic industries. In addition to funding activities, PT PXZ as the holding company is in a healthy financial condition. The results of economic analysis on the PT ABC project show that this project can be implemented and will generate profits for the company. The NPV to be obtained is USD 46.701.182, the IRR obtained is 17.15%, PBP will last for 5.52 years, and the PI has a value of 1,98. From the risk analysis, there are several factors that affect the economic results of the project, namely the price of oil and gas, the percentage of oil and gas sales, capital expenditure, and the percentage of oil and gas split.

Keywords: Feasibility Study Gross Split Monte Carlo Analysis Oil and Gas Upstream

Downloads

Download data is not yet available.

References

  1. BPS, "Sensus Penduduk," BPS, Jakarta, 2015.
     Google Scholar
  2. BP Global Company, "Statistic Review of World Energy," BP Global Company, London, 2019.
     Google Scholar
  3. N. Rastogi and M. Trivedi, "PESTLE Technique - A Tool to Identify External Risks in Construction Projects," International Research Journal of Engineering and Technology, pp. 384-388, 2016.
     Google Scholar
  4. S. W. Yudha, B. Tjahjono and A. Kolios, "A PESTLE Policy Mapping and Stakeholder Analysis of Indonesia's Fossil Fuel Eenergi Industry," Energies, p. 3, 2018.
     Google Scholar
  5. A. Eleonor, "Pestel Analysis on Petroleum Industry," Bucharest, 2012.
     Google Scholar
  6. SKK, "Indonesia to Replace Oil Recovery Scheme by Gross Profit Sharing," 2016. [Online]. Available: https://www.indonesia-investments.com/news/todays-headlines/indonesia-to-replace-oil-recovery-scheme-by-gross-profit-sharing/item7434. [Accessed 11 06 2020].
     Google Scholar
  7. Kementrian Energi dan Sumber Daya Alam, "Peraturan Menteri Energi dan Sumber Daya Mineral Nomor 23 Tahun 2012 tentang Tata Cara Penetapan Metodologi dan Formula Harga Minyak Mentah Indonesia," in Peraturan Menteri, Jakarta, Ministry of Energy and Mineral Resources of Indonesia, 2012.
     Google Scholar
  8. V. N. Setiawan, "SKK Migas: Realisasi Investasi Hulu Migas Tahun Ini Hanya Rp 168,95 T," 13 November 2019. [Online]. Available: https://katadata.co.id/febrinaiskana/energi/5e9a4c56a04d7/skk-migas-realisasi-investasi-hulu-migas-tahun-ini-hanya-rp-16895-t#:~:text=Jumlah%20tersebut%20terdiri%20atas%20investasi,%2C92%25%20dari%20tahun%20sebelumnya.
     Google Scholar
  9. A. Kolios and G. Read, "A Political, Economic, Social, Technology, Legal and Environmental (PESTLE) Approach for Risk Identification of the Tidal Industry in the United Kingdom," Journal Energies, pp. 5023-2045, 2013.
     Google Scholar
  10. SKK Migas, "Fokus Tingkatkan Kapasitas Tenaga Kerja Nasional," SKK Migas, Jakarta, 2019.
     Google Scholar
  11. S. Maudgalya, R. M. Knapp and M. McInerney, "Microbially Enhanced Oil Recovery Technologies: A Review of the Past, Present, and Future," Production and Operation Symposium, 2007.
     Google Scholar
  12. N. Siahaan, I. Fitri and H. Batih, "Energy in the Power Sector and GHG Emissions: Modeling as an Input to the Formulation of the Next Midterm National Development Plan," Climate Change Policies and Challenges in Indonesia, pp. 173-198, 2016.
     Google Scholar
  13. P. E. Wicaksono, "Cadangan Minyak Indonesia Hanya Cukup untuk 9 Tahun Lagi," 14 January 2020. [Online]. Available: https://www.liputan6.com/bisnis/read/4155492/cadangan-minyak-indonesia-hanya-cukup-untuk-9-tahun-lagi.
     Google Scholar
  14. M. Hitt, R. D. Ireland and R. E. Hoskisson, Strategic Management: Concepts and Cases: Competitiveness and Globalization, 12e ed., Boston: Cengage Learning, 2016.
     Google Scholar
  15. Pertamina, Pedoman Penilaian Kinerja Anak Perusahaan, Jakarta: Pertamina, 2019.
     Google Scholar
  16. L. P. Jennergren, "Continuing Value in Firm Valuation by the Discounted Cash Flow Model," European Journal of Operational Reserach, no. 185, pp. 1548-1563, 2008.
     Google Scholar
  17. L. J. Gitman and C. J. Zutter, Principles of Managerial Finance, 14th ed., Harlow: Pearson Education Limited, 2015.
     Google Scholar
  18. M. Bod'a and M. Kanderova, "Linearity of the Sharpe-Lintner version of the Capital Asset Pricing Model," Social and Behavioral Science, no. 110, p. 1136, 2014.
     Google Scholar
  19. E. F. Fama and K. R. French, "The Capital Asset Pricing Model: Theory and Evidence," Journal of Economic Perspectives, vol. 18, no. 3, p. 33, 2004.
     Google Scholar
  20. M. A. Mian and I. V. Pareja, "Applicability of the Classic WACC," Latin American Business Review, vol. 8, no. 2, pp. 24-25, 2007.
     Google Scholar
  21. N. Hermes, P. Smid and L. Yao, "Capital Budgeting Practices: A Comparative Study of the Netherlands and China," International Business Review, no. 16, pp. 630-654, 2007.
     Google Scholar
  22. O. Žižlavský, "Net Present Value Approach: Method for Economic Assessment of Innovation Projects," Brno, 2014.
     Google Scholar
  23. G. Reniers, L. Talarico and N. Paltrinieri, "Cost-Benefit Analysis of Safety Measures," in Dynamic Risk Analysis in the Chemical and Petroleum Industry, M. Convey, Ed., Oxford, Elsevier, 2016, pp. 195-205.
     Google Scholar
  24. M. A. Gurau, "The Use of Profitability Index in Economic Evaluation of Industrial Investment Projects," Bucharest, 2012.
     Google Scholar
  25. A. Saltelli, S. Tarantola, F. Campolongo and M. Ratto, Sensitivity Analysis in Practice, West Sussex: John Wiley & Sons, Ltd, 2004.
     Google Scholar
  26. M. Rees, "Sensitivity and Scneario Analysis, Simulation and Optimisation," in Principal of Financial Modelling, West Sussex, John Wiley & Sons, Ltd, 2018, pp. 155-160.
     Google Scholar
  27. M. Gyagri, E. M. Amarfio and S. A. Marfo, "Determinants of Global Pricing of Crude Oil - A Theoretical Review," International Journal of Petroleum and Petrochemical Engineering, pp. 7-15, 2017.
     Google Scholar
  28. B. M. Bryne, Structural Equation Modeling With AMOS, New Jersey: Lawrence Erlbaum Associates, Inc., Publishers, 2010.
     Google Scholar
  29. A. Brun, G. Aerts and M. Jerko, "Oil and Gas Practice: How to Achieve 50% Reduction in Offshore Drilling Costs," McKinsey, Oslo, 2015.
     Google Scholar