DELTA FORCE

REPORT
CASE STUDY

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 | Abbreviation
ABBREVIATION

SKK MIGAS : Satuan Kerja Khusus Minyak dan Gas Bumi

OPEC : Organization of the Petroleum Exporting Countries
BOPD : Barrel Oil per Days
POD : Plant of Development
COVID : Corona Virus Disease
Capex : Capital Expenditure
Opex : Operational Expenses
PSC : Production Sharing Contract
CR : Cost Recovery
KKKS : Kontraktor Kontrak Kerja Sama
NPV : Net Present Value
PIR : Profit to Investment Ratio
IRR : Internal Rate of Return
POT : Pay Out Time
GR : Gross Revenue
FTP : First Tranche Petroleum
RR : Remaining Reserves
IC : Investment Credit
UR : Uncovered
Rec : Recovery
ES : Equity to be Split
DMO : Domestic Market Obligation
NCS : Net Contractor Share
TCS : Total Contractor Share
Exp : Expenditure
CCF : Cash Flow Contractor
G&G : Geology and Geophysics
P&A : Purchase and Assumption

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 | Contents
CONTENTS

Cover ......................................................................................................................... i
Abbreviation ............................................................................................................. ii
Content ................................................................................................................... iii
Figures ..................................................................................................................... vi
Tables .................................................................................................................... vii
CHAPTER I. Company Profile ................................................................................. 1
1.1. Vision, Mission and Value .............................................................. 2
1.2. Member of DELTA FORCE ................................................... 2
CHAPTER II. Preliminary ....................................................................................... 3

2.1. Background .................................................................................... 4

2.2. Issues ................................................................................. 4
2.3. Limitation ........................................................................... 5
2.4. Objectivies .......................................................................... 5
CHAPTER III. Review of Literature ........................................................... 6

3.1. Global Outlook ............................................................................... 6

3.1.1. Global Oil Prices Decline ....................................................... 7
3.1.2. Demand and Supply ................................................................... 8
3.2. Indonesia Outlook ........................................................................... 9
3.2.1. Indonesia Oil and Gas Production Overview ......................... 9
3.2.2. The Impact of COVID-19 and the Declining Oil Price on
Indonesia’s Upstream Oil and Gas Performance in the First Quarter
of 2020 ................................................................................................. 10
3.3. Economical Outlook ......................................................................12
3.3.1. Introduction of PSC CR ......................................................13
3.3.2. Systems of PSC CR ............................................................13
3.3.3. Economic Indicator ............................................................15
3.3.3.1. Cash Flow .............................................................15
3.3.3.2. NPV .....................................................................16
3.3.3.3. PIR .......................................................................16
3.3.3.4. IRR .......................................................................16

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 | Contents

3.3.3.5. POT ......................................................................17

3.3.3.6. Discount Rate .......................................................17
3.3.4. Elements of Calculations in PSC CR ..................................17
3.3.4.1. Production ............................................................17
3.3.4.2. Investment ............................................................17
3.3.4.3. Cost Recovery ......................................................18
3.3.4.4. Gross Revenue ......................................................21
3.3.4.5. FTP ......................................................................21
3.3.4.6. Equity to be Split ..................................................21
3.3.4.7. DMO ....................................................................22
3.3.4.8. Taxable Income ....................................................22
3.3.4.9. Contractor Share ...................................................22
3.3.4.10. Government Share ................................................23
3.3.4.11. Sunk Cost ............................................................23
3.3.4.12. Investment Credit ................................................23
3.3.4.13. Uncoverable Cost ................................................23
3.3.4.14. Depreciation .......................................................23
3.3.5. PSC Calculation Formulas ..................................................24

CHAPTER IV. Method of Research ................................................................... 26

4.1. Field Overview ..............................................................................27

4.1.1. PT. Pertamina Asset 2 ........................................................27
4.1.2. Geographic Review of Field X ...........................................28

4.2. Methodology ......................................................................29

4.3. Flowchart ...........................................................................30
CHAPTER V. Data Analysis ............................................................................... 31

5.1. Field Data ......................................................................................32

5.2. Result ................................................................................34
5.2.1. Elements of Calculations in PSC CR .................................34

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 | Contents

5.2.2. Economic Indicator ............................................................37

CHAPTER VI. Disscusion ................................................................................... 38

CHAPTER VII. Conclusion ................................................................................ 42

CHAPTER VIII. Recommendation .................................................................... 44

CHAPTER IX. Implementations ......................................................................... 46

References .............................................................................................................49

Appendixes ........................................................................................................... 52

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 | List of Figure
FIGURES

Figure III-1 Global Oil Price Declines .............................................................. 7

Figure III-2 Global Crude Petroleum Supply and Demand ............................ 8
Figure III-3 Oil Reserves Map .......................................................................... 9
Figure III-4 Oil and gas National Production ................................................ .10
Figure III-5 Oil and Gas Revenue Distribution………………………………..12
Figure III-6 PSC CR Schematic Diagram ...................................................... .14
Figure III-7 Cost Recovery Structure ............................................................ 20
Figure III-8 Tangible vs Intangible ................................................................. 20
Figure IV-1 Location Map of West and East Operation Work Areas .. ........ 27
Figure IV-2 Location Map of Field X .............................................................. 28
Figure VIII-1 Inteligent Pipeline Solutions ....................................................... 45
Figure IX-1 Midstream Digitalization ............................................................. 48

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 | List of Table
TABLES

Tabel III-1 Upstream Oil and Gas Activities Progress (Quarter I – 2020) .... 12
Tabel IV-1 Oil Production Well X ................................................................... 32
Tabel IV-2 Economic Capital Assumptions ................................................... 33
Tabel IV-3 Cost Estimation of Design Facilities ............................................ 34
Tabel IX-1 Results of Field X Economic Analysis (Cutting
Of Capex and Opex is done)……………………………………… 47

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 1
COMPANY
PROFILE
1.1. Vision, Mission and Value 2
1.2. Member of DELTA FORCE 5

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 | Chapter I : Company Profile
CHAPTER I

COMPANY PROFILE

Delta Force Oil and Gas Energy is a company that focuses analysis on
the global oil market – including detailed statistics on oil supply, demand,
inventories and prices in Indonesia. The company was founded on July 1st, 2020
in Sleman, Yogyakarta. Our big goal is to support the government program to
provide energy needed in Indonesia.

1.1.Vision, Mission and Values Vision: 1.2. Member of Delta Force

To be Indonesia’s leading indigenous oil Oil and Gas Energy
and gas company. 1. Keziah Immanuela
Mission: 2. Sydney Olympya
1. Apply industry best practices to 3. Benedecta Thalasya SA
business in Indonesia 4. Vancha Aurelyo Hafizhar
2. Create value for our people,
shareholders and community
3. Promote the responsible use of oil and
gas resources for the sustainable
environmental and economic development
of the host country
4. Develop world-class industry
professionals

Values: Integrity, Loyalty, Entrepreneurial

Spirit, Culture of Learning, Perseverance
and Excellence.

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 2
PRELIMINARY

2.1. Background 2
2.2. Issues 5
2.3. Limitation 6
2.4. Objectivies 6

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 | Chapter II : Preliminary
CHAPTER II

PRELIMINARY

2.1.Background
A recent outbreak of a deadly virus that has been spreading around the world has
brought a total chaos to the oil and gas industry. Not only the oil demand has
shrinked but also the oil price that dropped significantly in the middle of April
2020 due to the oversupply of crude oil. Although the oil price has steadily
recovered, the petroleum industry is still reeling from the effects of the
pandemic causing Indonesia's oil producers to cut back production targets as
well as the amendment of oil lifting target by SKK Migas.

2.2.Issues
1. Decrease in petroleum consumption in worldwide market that causes a
reduction in crude oil demand due to COVID-19 Pandemic
2. An oversupply of oil crude with lesser demand which leads to lower oil price

ary

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 | Chapter II : Prelimin

2.3.Limitation
So that the writing of this report is more structured in accordance with the
desired goals, then the problems that are going to be discussed will be limited
by analyzing an oil and gas field when cutting rate production is carried out
from an economic point of view which is commonly used by calculating the
values of NPV (Net Present Value), PIR(Profit of Investment Ratio), IRR
(Internal Race of Return) and POT (Pay Out Time).

2.4.Objectives
1. Creating a production scenario that is assessed both technically and
economically to gain profit for Oil and Gas Industry during a pandemic.
2. Maximizing the calculation of estimated production by paying attention to
cost operation

ary

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 3
REVIEW OF
LITERATURE
3.1. Global Outlook 6
3.1.1. Global Oil Prices Decline 7
3.1.2. Demand and Supply 8
3.2. Indonesia Outlook 9
3.2.1. Indonesia Oil and Gas
Production Overview 9
3.2.2. . The Impact of COVID-19
and the Declining Oil Price
on Indonesia’s Upstream Oil and
Gas Performance in the First
Quarter of 2020 10
3.3. Economical Outlook 12
3.3.1. Introduction of PSC CR 13
~ 63.3.2.
~ Systems of PSC CR 13
3.3.3. Economic Indicator 15
 | Chapter III : Review Of Literature
CHAPTER III

REVIEW OF LITERATURE

3.1. Global Outlook

3.1.1. Global Oil Price Declines
Since reaching an all-time high of $143.95 per barrel in July 2008, there have
been three major price collapses in Brent crude oil, the global benchmark.
Each decline ended with prices falling between -75% and -88%. The latest
decline brought the price of oil down to roughly $9.00 per barrel. Following
an agreement by OPEC and some non-OPEC producers to reduce production,
prices have rebounded and stabilized at about $40.00 per barrel.

Figure 3.1.
Global Oil Price Declines
(Source: US Energy Information Administration)

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 | Chapter III : Review Of Literature

3.1.2. Demand and Supply

The third largest decline began in January 2020 as the effects of COVID-
19 spread globally. What differentiates this drop, as with many of the
effects of the pandemic, has been the speed with which it occurred. From
January 2020 to April 2020, the price of Brent crude oil per barrel fell by
87%—from $70.00 to $9.00—as supply remained elevated while demand
collapsed. This decline was the result of both supply and demand factors.
On the supply side, led by the U.S. pumping approximately 13 mbd per day,
the world continued to increase oil production aggressively over the last
five years. Global supply reached a record of approximately 102 mbd in
late 2018 and remained elevated until the end of 2019, reaching 101 mbd.
As the pandemic hit the transportation sector hard—particularly air and
automobile travel—demand began to collapse, and global petroleum
consumption fell 18.6% from 101.9 mbd in December 2019 to 82.9 mbd in
May.

Figure 3.2.
Global Crude Petroleum Supply and Demand
(Source: US Energy Information Administration)

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 | Chapter III : Review Of Literature

3.2.Indonesian Outlook
3.2.1. Indonesia Oil and Gas Production Overview
Of all the oil and gas working areas spread from west to east of Indonesia,
the national oil and gas reserves are still somewhat larger in the West than
in the East, with oil & condensate reserves of 2.5 billion standard barrel
tanks (Bstb) and gas reserves & gas associations of 50 trillion standard cubic
feet (Tcf).

Figure 3.3.
Oil Reserves Map
(Source: Annual Report 2019 SKK Migas )

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 | Chapter III : Review Of Literature

Figure 3.4.
Oil and Gas National Production
(Source: Annual Report 2019 SKK Migas )

3.1.2. The Impact of COVID-19 and the Declining Oil Price on Indonesia’s
Upstream Oil and Gas Performance in the First Quarter of 2020

SKK Migas Lowered their Lifting

Target Oil from 750,000 BOPD to
705,000 BOPD

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 | Chapter III : Review Of Literature

Decrease in Operational Activity

1. Postponement of Planned shutdowns in Banyu Urip

and Tangguh Fields.
2. Rework program and Well Maintenance at CPI,
Petrochina. PHE OSES
3. Plug and abandonment well activities at Conocophillips.
4. Postponement of Drilling, Rework and Well Maintenance Activities at EMP
Malacca Strait; Mont'dor Tungkal; Medco Rimau, Natuna and South Sumatra;
Camar Resources, Petrochina; POD Arung Nowera etc.
5. The potential for withdrawal of the Onstream Merakes project to 2021.
6. State Revenue and Cost Recovery: Outlook Gross Revenue lowered from MMUS
$32 to MMUS $17,8

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 | Chapter III : Review Of Literature

Tabel III-1
Upstream Oil and Gas Activities Progress (Quarter I-2020)

2020

Outlook
%
2019 2020 Realization

Ket
Activities Unit
Realization Target
Target
( /Maret)
2020
Seimik 2D
Active
Km 12.169
19.466

28.324

7.669
Working Area 5.374 319 6% 2.755 -49%
KKP in Open
Km 7.297
Area 22.950 7.350 32% 22.950
Seismic 3D Km2 6.837 3.419 477 14% 544 -48%
Development
Well 322
Wells Drilling 395 74 19% 263 -34%
Exploration
Well 36
Wells Drilling 61 4 7% 33 -56%
Workover Well 806 837 166 20% 767 -9%
Well Service Activity 29.405 28.151 6.926 25% 27.966 -1%

3.3.Economical Outlook

Figure 3.5.
Oil and Gas Revenue Distribution
(Source: Annual Report 2019 SKK Migas )

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 | Chapter III : Review Of Literature

3.3.1. Introduction of PSC CR

Production Sharing Contract Agreement is an agreement method in
business that is used in the oil and gas sector in Indonesia in order to
increase state revenue from these natural resources and attract
investors to invest in Indonesia. Indonesia as the initiator of the first
PSC in the world in 1960 changed the concession system which could
cause many losses to the State by looking at Indonesia's oil and gas
potential at that time. The position of the Production Sharing Contract
in the exploitation of oil and gas mining is very important, because
based on the provisions of the Oil and Gas Law Number 22 of 2001,
it requires that every upstream business activity in oil and gas mining
be carried out by a business entity or business entity. still based on a
cooperation contract with the executing agency. The implementing
agency representing the Indonesian government is Satuan Kerja
Khusus Minyak dan Gas Bumi (SKK MIGAS) and a business entity
based on a cooperation contract in the PSC is called a Kontraktor
Kontrak Kerja Sama (KKKS). The PSC, which is currently the 6th
generation of an agreement which previously indicated that there was
a gap to harm the State and reduce investors' interest in investing in
Indonesia.
3.3.2. Systems Production Sharing Contract Cost Recovery
The Production Sharing Contract system is a form of oil and gas
operating contract currently in use in Indonesia. This contract
regulates the contractor's obligations, how to calculate costs, and how
to share profits from oil and gas companies. Schematically, it can be
seen in Figure 3.1

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 | Chapter III : Review Of Literature

Figure 3.6.
PSC CR Schematic Diagram

When the contractor gets oil and natural gas, the contractor receives gross
revenue. FTP (First Tranche Petroleum) was deducted from this gross income, which
accounted for a maximum of 20% of the total gross revenue for the year. Then the
income will be reduced by Cost Recovery, namely the cost of capital incurred by the
contractor. Furthermore, the remaining income will be divided between the contractor
and the government which is called Equity To Be Split. Then, there is an obligation for
the contractor to sell a portion (a maximum of 20%) of its production to the government

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 | Chapter III : Review Of Literature

that year to meet domestic fuel needs. The government will pay for the oil sold as a
DMO in the form of a DMO fee. After that, the contactor is obliged to pay taxes to the
state from taxable income.

3.3.3. Economic Indicators

Economic indicator is a parameter used to objectively assess the feasibility
of an investment project. Quantitative economic indicators can be used as
a guide or analysis in making decisions about project feasibility.
3.3.3.1. Cash Flow
Cash flow is a flow of financial funds that states the amount and time of
receipt of cash income and the amount and time of cash costs of an
investment plan or business activity. The flow of funds generated from
a business activity shows the ability to benefit from that business
activity. One important factor in cash flow analysis is time, because the
value of money is greatly influenced by time. On a micro level, cash flow
in each oil and gas project in Indonesia is determined not only by
technical parameters (infrastructure and facilities that have been or will
be built, the amount of reserves, and the estimated pattern of production
decline that occurs over the life of the field) but also related to matters -
non-technical matters such as types of contracts, applicable regulations
and legality, financial and tax regulations.

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 | Chapter III : Review Of Literature

3.3.3.2. Net Present Value (NPV)

NPV (Net Present Value) is the present value of expenditures over the
life of the project at a given discount rate. This value is the total of the
Discounted Cash Flow using the company's Discounted Factor Average
Opportunity Rate Of Return. From the NPV value, a project economic
assessment can be carried out. If the NPV is positive, then this indicates
the project is feasible to run because it provides benefits. On the other
hand, if the NPV is negative, then the project is not feasible to run
because it will provide economic losses. If NPV = 0, it means that the
investment produces a rate of return equal to the price used.
3.3.3.3.Profit to Investment Ratio (PIR)
Profit to Investment Ratio menyatakan seberapa banyak net cash flow
proyek dapat menutup semua nilai investasi awal. Jika nilai profit to
invesment ratio lebih besar dari satu, maka investasi ini
menguntungkan. Jika sebaliknya, maka proyek tersebut tidak
menguntungkan.
3.3.3.4. Internal Rate of Return (IRR)
Internal Rate of Return (IRR) is the interest price which causes the price
of all cash inflows to be equal to the outflows if this cash flow is
discounted for a certain time. In other words, the IRR is the discount rate
that causes the NPV to equal zero. To calculate the IRR, it is generally
carried out with a trial and error approach, namely determining the NPV
at several discount levels until a negative and positive NPV value is
obtained, then interpolation is carried out where the NPV is equal to
zero. IRR is also often used to define the economics of the marginal field,
that is, a field which if developed under the prevailing contract system
will provide a small IRR. This needs to be known, as a basis for
feasibility and the right form of incentives given to a marginal field. In
the concept of IRR has main characteristics, namely:

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 | Chapter III : Review Of Literature

 Requires a Trial and error solution.

 Incorporate the time value of money into the ability to earn.
 Does not depend on absolute measure of cost recovery.
 IRR may be more than 100%, in this case there is no event to
determine IRR correctly.
 IRR cannot be calculated if all cash flows are negative and / or
positive but POT has not been achieved.
3.3.3.5. Pay Out Time (POT)
Pay Out Time (POT) is the length of time obtained until investment
returns. Investors always want their funds to return quickly, namely
projects with shorter POT. However, this POT indicator has a weakness,
namely it does not provide a picture of what happens after POT is
achieved, so POT is rarely used as the main parameter in project
selection but as an additional consideration.
3.3.3.6. Discount Rate
When viewed from a company or individual perspective, interest can be
viewed as an expense for renting money.
3.3.4. Elements of Calculation in PSC CR
The calculation elements in the CR PSC include:
3.3.4.1.Production
Production is the output of oil and gas companies. Oil and gas company
revenues and state revenues depend on oil and gas production by these
contractors.
3.3.4.2. Investment
Basically, there are two kinds of investments made by contractors,
namely capital and non-capital investments. The terms capital and non-
capital are used to define the value of a good or capital as a function of
time. Investments that are classified as capital are goods that are

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 | Chapter III : Review Of Literature

considered to have a reduction in value or depreciation over the life of

the goods, for example, such as buildings, drilling and production
equipment, machinery, transportation equipment and production
facilities which decline in value after being used for a period of time.
certain time. Non-capital investment is an investment that is considered
to have no reduction in value over time, for example, for example
operating costs, maintenance costs, and others. In non-capital investment
there is no reduction in value over time. In the production sharing
contract system, whether an investment is classified as capital or non-
capital is uncertain, so an agreement is made between the contractor and
the government. This is done to avoid misunderstandings in the
determination of capital and non-capital investment.
3.3.4.3.Cost Recovery
Cost Recovery is the return of costs used to develop the field to the
contractor through a certain mechanism. Cost recovery is taken from
gross revenue before the rest is shared between the contractor and the
government. At the beginning of production, it is likely that the
contractor will not be able to pay off the costs incurred immediately in
that year. Costs that can be paid for payments in that year are known as
recoverable costs and the remaining costs that have not been paid are
called unrecoverable costs. Cost recovery consists of:
 Non Capital Cost: Operating Cost related to operations during the
year concerned, including trade costs, materials, seismic surveys,
and intangible costs of drilling equipment including drilling mud
and chemicals, bits, casing and work over. Operating cost for each
volume of hydrocarbons produced is a division of ongoing costs by
the amount of hydrocarbons produced.

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 | Chapter III : Review Of Literature

 Capital Cost Depreciation: Return on investment whose amount is

determined by a certain method. Depreciation calculations can
usually be used for 5 years.
 Operating Cost: Costs incurred so that production activities in a field
can be carried out. These costs represent expenses for routine
activities starting from the field development process to the
production of hydrocarbons.
 Unrecoverable Cost (Uncoverable Operating Cost in Previous
Year): Costs that are transferred from the previous year because they
have not been paid in that year or are often referred to as cost carry
over. Previous year unrecovered cost can occur because revenue is
smaller than total cost.
 Cost Recovery Ceiling: is the percentage of recovery from revenue
that can be obtained by the contractor in the year concerned. The
current cost recovery ceiling is 100% if revenue is > 0, while if it is
0, the cost recovery ceiling is 0%.

Mathematically, the above conditions can be stated as:

 If (Cost Recovery + Investment Credit) > Revenue Cost
Recovery Ceiling, So that: (Recovery = Revenue * Cost Recovery
Ceiling) and (Unrecovery = CR + IC – Recovery)
 If , So that : ( Recovery = CR + IC) and (Unrecovery = 0)

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 | Chapter III : Review Of Literature

Figure 3.7.
Cost Recovery Structure

Figure 3.8.
Tangible vs Intangible

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 | Chapter III : Review Of Literature

3.3.4.4.Gross Revenue
Gross Revenue is the gross revenue from the sale of oil and gas. If a
contract produces more than one type of production, for example oil, gas
and condensate, then the Gross Revenue is the product of the product and
the price added up.
3.3.4.5. First Tranche Petroleum (FTP)
Basically, FTP is a system of allowance for a certain amount of production
each year before it is taken for cost recovery (investment credit and
operating costs). The size each of part the FTP of the government and
contractors in accordance with the profit sharing agreement or in
Indonesia it is better known as Equity To Be Split.
Operating costs may not be paid from the results of the FTP Contractor
Share. FTP Contractor Share is exempt from Cost Recovery. To avoid
misunderstanding, the FTP Contractor Share is subject to income tax. The
maximum amount of FTP is 20% of Gross Revenue. In the Gross Split
system there is no FTP sharing.
3.3.4.6.Equity To Be Split
Equity to be split is the amount of Gross Revenue minus FTP and
recoverable costs. This amount will be shared between the government
and the contractor. ETS can also be defined as the sharing of proceeds
from the production of the Work Area between the government and the
contractor. Sharing Split is determined in the cooperation contract. Since
2016 on the offer for the Oil and Gas Working Area, the government has
opened it so that contractors can determine the amount of the Sharing Split
by themselves. And the submission of the Sharing Split from the
contractor is used as a consideration for the selection of the tender winner
in the submission of the Oil and Gas Working Area and this is the
beginning of the formation of the PSC Gross Split.

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 | Chapter III : Review Of Literature

3.3.4.7. Domestic Market Obligation (DMO)

Domestic Market Obligation (DMO) is the contractor's obligation to
deliver a portion of the oil produced to the government. The oil that is
handed over to the government is used to meet domestic fuel oil needs, in
return the contractor gets a fee from the government for the DMO. The
amount submitted is determined evenly across all contractors operating in
Indonesia and is limited to a maximum of 25% of the oil produced in the
year concerned. Oil submitted as DMO is taken from the contractor's
share. Based on the production sharing contract, the DMO calculation is
as follows:
 If (25% Revenue Share)> Contractor share, then: (DMO = Contractor
Share)
 If not : (DMO = 25% Revenue Share)
Meanwhile, the contractor's proceeds from which the oil is sold to the
government at the domestic price is called the DMO fee. For the first
five years of production, the DMO fee is the same as the DMO, which
is called the five years holidays, while for the next 10% of the DMO.
3.3.4.8. Taxable Income
Taxable income is part of the contractor's income which is known as tax.
The tax criteria imposed are all parts of the contractor which are profit. In
a production sharing contract in Indonesia, regardless of the tax rate for
the results, the profit sharing will remain the same.
3.3.4.9. Contractor Share
Contractor Share is the contractor's share that comes from gross income
after deducting pre-tax costs multiplied by ETS. This contractor's share
right after being deducted by the distribution tax before Cost Recovery or
called the Net Contractor Share and if added with all the parts issued are
called the Total Contractor Share.

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 | Chapter III : Review Of Literature

3.3.4.10. Government Share

Government share is the total share of government revenue allowed in the
development of an oil and gas field. Total Government Share is ETS
Government plus the DMO result minus the DMO fee and then added by
the Government tax.
3.3.4.11. Sunk Cost
Sunk cost is the cost of exploration before production. The principle is the
cost that must be paid before the profit sharing.
3.3.4.12. Investment Credit
It is a form of government incentive in the PSC to encourage oil and gas
investment in adding new reserves. Contractors can obtain investment
credit with a certain percentage of the capital cost required for the
development of new oil and gas production facilities in the field.
Investment Credit can be taken in advance before returning operating
costs.
3.3.4.13. Uncoverable Cost
Uncoverable Cost is the contractor's expenses that the contractor cannot
withdraw because the contract expires in the following year.
Unrecoverable Cost can arise due to two things, namely low production
and the maximum cost recovery limit. If production is low, only part of
the expenditure can be reimbursed by the government. The maximum cost
recovery limit gives the effect of spending that can be reimbursed by the
government.
3.3.4.14. Depreciation
An item or capital will experience a reduction in value due to the time it
is used. Factors that must be taken into account in calculating the
depreciation period of an item or capital are the initial cost, the recoverable
cost when the goods are finished or can no longer be used and the length

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 | Chapter III : Review Of Literature

of time they are used. Several depreciation methods that are often used
are:
 Straight Line: The depreciation rate is constant over the period of time
the depreciation occurs.
 Declining Balance: The depreciation value for each time where
depreciation is estimated is not constant but decreases.
 Double Declining Balance: The depreciation percentage is twice the
depreciation straight line, but subject to residual value after
depreciation.
 Sum Of The Year Digits: The amount of expense will be depreciated
decreasing every year. Depreciation uses the consideration that the
longer the fixed asset is used, the lower the quality of the asset will
be.
Depreciation does not have a direct effect on the calculation of Net Cash
Flow, but has a direct effect on profit (profit).
3.4.PSC Calculation Formulas
The procedure and correlation used in calculating project cash flow using
PSC are as follows:

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 | Chapter III : Review Of Literature

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 4
METHOD OF
RESEARCH
4.1. Field Overview 27
4.1.1. PT. Pertamina Asset 2 27
4.1.2. Geographic Review of
Field X 28

4.2. Methodology 29
4.3. Flowchart 30

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 | Chapter IV : Method Of Research
CHAPTER IV

Method of Research
4.1. Field Overview
4.1.1. PT. Pertamina EP Asset 2
Pertamina EP Asset 2 Prubumulih Field is a state-owned oil and gas company
with a working area of 15,972 km2. Early indications of petroleum existed since
1870 after the geological mapping of the surface was carried out in the form of
oil seepage at the top of the anticline. The initial production was carried out by
the Muara Enim Co oil company, in 1896.

Figure 4.1
Location Map of West and East Operation Work Areas
(Source: PT.Pertamina EP Asset 2 Document, 2016)

Geographically, Pertamina EP Asset 2 Southern Sumatra, East Prabumulih is

located between the coordinates 020 50’ – 03040’ LS dan 103000’ – 104030’
BT and is located approximately 90km southwest of Palembang (Figure 4.1.).

~ 27 ~
 | Chapter IV : Method Of Research

The geological formations in in Prabumulih include field “X”,West

Prabumulih are the Muara Enim Prabumulih, Lembak, Kemang, Talang
Formation, the Air Benakat Formation, Jimar, Hibiscus, Tanjung Tiga Barat,
the Gumai Formation, the Batu Raja Tanjung Miring Barat, Beringin, Kuang,
Formation, the Talang Akar Formation Merbau, Pagar Dewa, Prabumenang,
and the Lahat Formation. Exploration Periterium, Lavatera, Pemaat, Karang Dewa
and production activities and Tasim.

4.1.2 Geographic Review of Field “X”

Field “X”, included in the Pertamina Field “X” was discovered through
Aset Prabumulih Timur working area, exploration drilling by BPM in September
located  30 km to the southeast of 1938 and developed as many as 33 wells
Prabumulih City and surrouned by until 2011. From the result of exploration
Tanjung Tiga Field in the west, Tanjung drilling of 13 wells, 5 wells are positioned
Miring Field Timur to the south, outside the “X” area with proven results to
Tanjung Miring Barat- Tangai Field in produce economic gas the while the others
the southwest (Figure 4.2). expressed as dry wells.

Field “X”
OGAN

~ 28 ~
 | Chapter IV : Method Of Research

Figure 4.2.
Location Map of Field “X”
(Source: PT.Pertamina EP Asset 2 Document, 2016)
4.2.Methodology
This research is structured using a research method to make it easier to solve this
case. The following are the stages of the research method:
1. Study of Literature
Conducted as an initial stage in solving a problem, by taking a literature
approach to problems related to research, which are in the form of theory,
data processing formulas, discussion, and problem solving.
2. Secondary data collection
Namely, such as the initial plan for the production amount of well X, Capex
and Opex costs, oil prices and operating costs as well as data obtained from
the results of literature assumptions (Practical Work Reports and Journals)
including Tax, Domestic Market Obligation (DMO), Discount Rate,
Escalation Rate and FTP
3. Data calculation
The data obtained will then be calculated on the data based on economic
calculations and economic indicators.
4. Calculated data processing
This is done by determining the value of the Net Present Value (NPV), Rate
of Return (ROR), Pay Out Time (POT), and Profit to Investment Ratio
(PIR).
5. Conclusion
After collecting and processing the data using appropriate formulas based
on literature studies, calculation data analysis is carried out to obtain a
conclusion whether or not the cut of production rate in field-X is profit.

~ 29 ~
 | Chapter IV : Method Of Research

4.3.Flowchart

~ 30 ~
 5
DATA
ANALYSIS
5.1. Field Data 32
5.2. Result 34
5.2.1. Elements of Calculations
in PSC CR 34
5.2.2. Economic Indicator 37

~ 31 ~
 | Chapter V : Data Analysis

CHAPTER V

DATA ANALYSIS
5.1.Field Data
The economic limit for field well “X”, which is 3650 bbl/year, is based on data
available in PT Pertamina EP Asset 2 Prabumulih. Well X has an initial production
target of 250 BOPD or 91.250 bbl/year.

Tabel V-1
Oil Production Well-X
TIME Oil Production TIME Oil Production

(Tahun) (MMBbl) (Tahun) (MMBbl)

0 0,091 9 0,015

1 0,074 10 0,012

2 0,061 11 0,010

3 0,050 12 0,008

4 0,041 13 0,006

5 0,033 14 0,007

6 0,027 15 0,006

7 0,022 16 0,045

8 0,018 17 0,004

~ 32 ~
 | Chapter V : Data Analysis

Tabel V-2
Economic Model Assumptions

FTP 20%

IC 7%

MAX CR 100%

Cont. Nett Share Gas 40%

Cont. Gross Share Gas 67,2269%

DMO - Oil 25%

DMO Fee Oil 25%

Total Tax 40,50%

Oil Price 20

Escalation Factor 7%

Depreciation Period (years) 5

Depreciation Method Declining Balance (OB)

Depreciation Factor 25%

End Period 2023

Discount Factor 10%

VAT 0%

~ 33 ~
 | Chapter V : Data Analysis

Tabel V-3
Cost Estimatition of Design Facilities
Capex Facilities
Surface Facilities Qty Price
Wellhead 4 1,0 MM$
Flowline 36075 2,1645 MM$
Manifold 1 0,008 MM$
Separator 3 0,9 MM$
CAPEX Choke 4 0,004 MM$
Compresor 1 0,8 MM$
Oil Storage Tank 2 0,20 MM$
Production Facilities 73,97 MM$
Total 79,05 MM$
Non Capital
G&G, Drilling Cost, Well test, etc 39,2 MM$

Fixed Annual Cost 199 MM$

ASR
Gas Processing + Onshore Pipeline
OPEX 33,3
+Jetty MM$
Well (P&A and Reboisation) 8,86 MM$
Total 42,16 MM$

Sunk Cost 910 MM$

5.2.Result
5.2.1. Elements of Calculation of PSC CR
From the project data and assumptions obtained, then the data is entered
into an excel formula so that the value or cash flow data from a project like
this can be obtained (an example of a calculation in the year the cutting rate
production occurred :

~ 34 ~
 | Chapter V : Data Analysis

A. Gross Revenue Calculation (GR)

Gross Revenue = Production x 1000 x Price Escalated
= 0,074 MMBbl x 1000 x $20 USD
= $ 537,19 MMUSD
B. First Tranche Petroleum (FTP) Share
First Tranche Petroleum = GR x 20%
= $ 1.480 MMUSD x 20%
= $ 107,44 MMUSD
C. Remaining Reserves (RR)= GR – FTP
= $ 537,19 – $ 107,44
= $ 429,75 MMUSD
D. Depresiasi (Declining Balance)
1 1 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑡𝑖𝑚𝑒−1
Depresiasi = 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑥 𝑥 (1 − 𝑛)
𝑛

1 1 1−1
= $ 79,05 MMUSD x 𝑥 (1 − 5)
5

= $ (0,72) MMUSD
E. Invesment Credit (IC)
Invesment Credit = Capital x %IC
= $ 79,05 MMUSD x 7%
= $ 5,54 MMUSD
F. Unrecovered (UR) = CR – Rec + IC
= $ 114,36 - $ 114,36 + $ 5,54
= $ 5,53 MMUSD
G. Cost Recovery (CR) = Non-capital + Depresiasi + Opex + UR
= $ 39,2 + $ (0,72) + $ 160,56 + $ 5,53
= $ 199,05 MMUSD
H. Recovery (Rec) = IC + CR
= $ 0 + $ 199,05

~ 35 ~
 | Chapter V : Data Analysis

= $ 199,05 MMUSD
I. Profit Share (Equity to be Split) = RR – Rec
= $ 429,75 - $ 199,05
= $ 230,70 MMUSD
J. Gov. Share = Equity to be Split x % Government Share
= $ 230,70 MMUSD x 32,8%
= $ 75,61 MMUSD
K. Cont. Share = Equity to be Split x %Contract Share
= $ 230,70 MMUSD x 67,2%
= $ 153,09 MMUSD
𝐶𝑜𝑛𝑡.𝑁𝑒𝑡𝑡 𝑆ℎ𝑎𝑟𝑒
L. DMO = %DMO x 𝑥 0,9 𝑥 𝑅𝑅
(1−𝑇𝑜𝑡𝑎𝑙 𝑇𝑎𝑥)
40%
= 25% x (1−40,5%) 𝑥 0,9 𝑥 $ 230,70 𝑀𝑀𝑈𝑆𝐷

= $ 179,09 MMUSD
M. DMO Fee Oil = DMO x %DMO Fee Oil
= $ 179,09 MMUSD x 25 %
= $ 65 MMUSD
N. Net Contractor Share (NCS) = (CS + IC – DMO) x (1 – Total Tax)
= ($ 153,09 + $ 5,53 - $ 65) x (1-40,5%)
= $ 53,60 MMUSD
O. Total Contractor Share (TCS) = NCS + Recovery – IC
= $ 53,60 + $ 199,05 - $ 5,53
= $ 252,65 MMUSD
P. Expenditure (Exp) = Capital + Non. Cap + Opex + ASR
= $ 79,05 + $ 39,2 + $ 5,345 + $ 42,16
= $ 165,75 MMUSD
Q. Cash Flow Contractor (CCF) = Exp – TCS
= $ 165,7 - $ 252,65
= $ 86,90 MMUSD

~ 36 ~
 | Chapter V : Data Analysis

5.2.2. Economy Indicator

Economic indicator is a parameter used to objectively assess the
feasibility of an investment project. Quantitive economic indicators
can be used as a guide or analysis in making decisions about project
feasibility.
A. Discount Rate
1
Discount Rate = (1+𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝐹𝑎𝑐𝑡𝑜𝑟)𝑡𝑖𝑚𝑒
1
= (1+10%)18

= $ 0,18 MMUSD
B. Net Present Value (NPV)
NPV = CCF x Discount Rate
= $ 86,90 x $ 0,18
= $ 15,63 MMUSD
C. Profit to Investment Ratio (PIR)
𝑇𝑜𝑡𝑎𝑙 𝐶𝐶𝐹
PIR = 𝐶𝑎𝑝𝑖𝑡𝑎𝑙+𝑇𝑜𝑡𝑎𝑙 𝑁𝑜𝑛.𝐶𝑎𝑝
$ 444,97 𝑀𝑀𝑈𝑆𝐷
=
$ 79,05 𝑀𝑀𝑈𝑆𝐷 +$ 744,8 𝑀𝑀𝑈𝑆𝐷

= $ 0,54 MMUSD
D. Internal Rate of Return (IRR)
𝑇𝑜𝑡𝑎𝑙 𝑁𝑃𝑉 (𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑟𝑎𝑡𝑒 10%)
IRR = 10% + (12% - 10%) x 𝑇𝑜𝑡𝑎𝑙 𝑁𝑃𝑉 (𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑟𝑎𝑡𝑒 12%)
$ 428,37 𝑀𝑀𝑈𝑆𝐷
= 10% + (12% - 10%) x $ 415,95 𝑀𝑀𝑈𝑆𝐷

= 11,015%
E. Pay Out Time (POT)
𝑁𝑃𝑉 0
POT = N1 + (N2 – N1) x + 𝑁𝑃𝑉 0
(𝑁𝑃𝑉 1−𝑁𝑃𝑉 0)
142,07
= 0 + (2 – 0) x (239,40−142,07) + 142,07

= 1,19 Years

~ 37 ~
 6
DISCUSSION

~ 38 ~
 | Chapter VI : Discussion

CHAPTER VI

DISCUSSION

Global energy market demand, such as for oil and natural gas is declining
as the impacts of COVID-19 spread around the world. The recent collapse in oil
prices in the global market also caused by a combination of supply and demand
issues as well as uncertainty about the future and has resulted in a crash in
financial markets. This decline in oil demand has been particularly significant as
oil is mainly used in the transportation sector, and business closures, declines in
domestic and international travel, and the lockdowns and quarantines in many
countries have all shrunk the demand for oil. Besides that, an oversupply of oil
crude with lesser demand which leads to lower oil price.
The existence of the COVID-19 outbreak also has an impact on the oil and
gas industry in Indonesia, although Indonesia has oil & condensate reserves of 2.5
billion standard barrels of tanks (Bstb) and gas reserves & gas associations of 50
trillion standard cubic feet (Tcf) but From year to year the amount of lifting has
decreased because most fields have matured, so it requires consideration when
many countries are cutting production rates as a solution in times of crisis like
this. Following are the actions that have been drafted by SKK Migas as the
upstream oil and gas business manager: Postponement of Planned shutdowns in
Banyu Urip and Tangguh Fields, Rework program and Well Maintenance at CPI,
Petrochina. PHE OSES, Plug and abandonment well activities at Conocophillips,
Postponement of Drilling, Rework and Well Maintenance Activities at EMP
Malacca Strait; Mont’dor Tungkal; Medco Rimau, Natuna and South Sumatra;
Camar Resources, Petrochina; POD Arung Nowera, The potential for withdrawal
of the Onstream Merakes project to 2021 and the cutting of oil lifting target from
750,000 BOPD to 705,000 BOPD.
Of the many actions that have been taken, cutting the oil lifting target has
been in the spotlight. To analyse whether cutting the production

~ 39 ~
 | Chapter VI : Discussion

rate is profitable or not for one field during the COVID-19 outbreak, an economic
analysis is carried out using the Production Sharing Contract Cost Recovery
Method. In this analysis, there are several elements of calculations in the PSC CR
that will determine the economic indicators such as : Production, Investment, Cost
Recovery, Gross Revenue, FTP, Equity to be Split, DMO, Tax Income, Contractor
Share, Government Share, Sunk Cost, Investment Credit, Uncoverable Cost, and
Depreciation. From the elements mentioned, economic indicators will be obtained
such as cash flow which states the amount and time of receipt of cash income and
the amount and time of cash costs of an investment plan or business activity, NPV
is the current value of expenses throughout the life of the project at the discount
rate given, RIR is the interest price which causes the price of all cashs inflows to
be equal to the outflow if this cash flow is discounted for a certain time, POT is
the length of time obtained until investment returns and the Discount Rate is the
cost of the rent money.
Research that is done at Field X Pertamina EP has brought the main
output, namely seeing whether an oil and gas project is profitable or not when a
production rate is cut. Field X Pertamine EP is included in the Pertamina Asset
East Prabumulih working area, which has a well economic limit of 3650 bbl/ year
and an initial production target of 250 BOPD or 91,250 bbl/ year. The economic
assumption is FTP is 20%, IC is 7%, Max CR is 100%, Contractor Nett Share Oil
is 40,%, Contractor Gross Share Oil is 67,2269%, DMO Oil is 25%, Total Tax is
40,5%, Escalation Factor of 7%, Depreciation period of 5 years, Depreciation
Factor of 25%, Discount Factor of 10% and assuming an oil price of $20 USD.
Field X also has a cost estimation of design facilities for CAPEX Capital of $79,05
MMUSD and Non Capital of $ 39,2 MMUSD, Opex of $ 199 MMUSD and an ASR
fee of $42,16 MMUSD. From calculations using Microsoft Excel worksheets, by
cutting production by 1,064%, the results of the economic indicators of NPV at a
discount rate at 10% of $ 15,63 MMUSD and NPV at a discount rate at 12% OF
$ 11.30 MMUSD. Both show an NPV value that is higher than 0

~ 40 ~
 | Chapter VI : Discussion

where the criteria for the proposed profitability of an oil and gas field is NPV>0.
With a discount facto of 10%, investors should accept this project. For the PIR
value, it was obtained of $ 0,54 MMUSD and an IRR of 11,015%. Based on the
results of the IRR, it can be concluded that the field X is profit enough to be
developed even the rate production cut was carried out because the results were
bigger than the discount factor that had been determined, namely 10%. POT
obtained is 1,19 years, based on the POT value, this project will benefit in the
second year. The proposed production rate cut is also considered profitable
because the payback period is shorter than the project life. Of all the economic
indicators in field X, the production rate cut show a positive value, so it can be
said that this field is profitable.

~ 41 ~
 7
CONCLUSION

~ 42 ~
 | Chapter VII : Conclusions
CHAPTER VII

CONCLUSION

The conclusions that can be drawn are :

1. Several things that caused the world oil price to fall, namely:
a. Decrease in petroleum consumption in worldwide market that causes a
reduction in crude oil demand due to COVID19 Pandemic
b. An oversupply of oil crude with lesser demand which leads to lower oil
price
2. Based on the study of economic indicators, the results obtained are as follows:
a. NPV @discount rate 10% = $ 15,63 MMUSD
b. NPV @discount rate 12% = $ 11,30 MMUSD
c. PIR = $ 0,54 MMUSD
d. IRR = 11,015%
e. POT = 1,19 years
3. Cutting the production rate will be more profitable than maintaining the rate of
production where demand and oil prices are reduced.

~ 43 ~
 8
RECOMENDATIONS
8.1. Solution
~ 44
8.2. ~
Inovation
 | Chapter VIII : Recomendations
CHAPTER VIII

RECOMENDATIONS

8.1.Solution
The right solution that must be done by oil companies is Cut CAPEX and OPEX
by 22-30% in several ways such as: only producing wells that have low
operating costs, this is done because the decreasing demand for oil makes it
difficult for an oil company to keep their production rate. However, when the
well's production is still not optimal, production optimization can be carried out
using IPR analysis, reworking, moving layers or acidizing.

8.2. Innovation
We also offer innovation which is Intelligent Pipeline Solution. A cutting-edge
pipeline monitoring technology that is almost real time. It combines pipeline
management, predictivity software, and digital technology. This technology uses
the benefits of big data and the industrial internet to increase efficiency and save
costs which is beneficial for the current condition.The cost needed to develop it
is $40 million/year.

Figure 8.1.
Intelligent Pipeline Solution
(Source: Baker Huges)

~ 45 ~
 9
IMPLEMENTATIONS
N

~ 46 ~
 | Chapter IX : Implementations
CHAPTER IX

IMPLEMENTATIONS

a. Implementation of Solution
In the current condition, SKK Migas has taken many actions in order to make
CAPEX and OPEX cost efficient, such as Postponement of Planned Shutdown,
Rework Program and Well Maintenance, Plug and Abandonement Well
Activities and Postponement of Well Drilling Activities.
For Field X analysis in the implementation of cutting CAPEX and OPEX by
22-30%, the results can be seen in the table below:
Tabel IX-1
Results of the X-Field Economic Analysis
(Cutting of Capex dan Opex is done)

NPV @discount rate $ 23,04 MMUSD

10%
NPV @discount rate $ 16,66 MMUSD
12%
PIR $ 1,43 MMUSD
IRR 11,035 %
POT 1,08 year

b. Implementation of Innovation
In this modern days, Intelligent Pipeline solutions are implemented by a few oil
and gas company. The Intelligent Pipeline Solution is an innovative platform
that addresses these challenges by aggregating and analyzing the critical data
impacting your pipeline. The Intelligent Pipeline Solution is the first industry
solution as part of a strategic global alliance formed by GE and Accenture in
2013 and launched in 2014 and spends $40 billion a year to expand and

~ 47 ~
 | Chapter IX : Implementations

maintain its network of assets. Together they are developing technology and
analytics applications that help wide-ranging industries take advantage of the
massive amounts of data generated through business operations. It uses Pipeline
Management a GE Predictivity™ software solution, powered by the Predix™
platform and is implemented through Accenture’s digital technology, business
process, systems integration and change management capabilities.
The Benefits:
1. The Intelligent Pipeline Solution will change the pipeline industry by
providing the right information, to make the right decisions, at the right
time.
2. Corrosion monitoring – analysis of all corrosion-related available data:
pipeline inspections, hydro-test pressures, cathodic protection status, etc.
3. Finding solutions to the operator’s challenge to locate, identify, characterize
and monitor the many types of cracks that may compromise pipeline
integrity.

Figure 9.1.
Midstream Digitalization
(Source: Baker Huges)

~ 48 ~
 10
REFERENCES

~ 49 ~
 | References

REFERENCES

Danial, Muhammad., Amin, Muhammad., Anwar, Ubaidallah. 2015. “Prospek Proyek

Pembukaan Sumur Minyak X pada Lapangan X PT PERTAMINA EP Asset 2
Field Prabumulih.” Karya Ilmiah, Fakultas Teknik Universitas Sriwijaya.

Diara, Dhafinda Diakinan. 2019. “Analisis Manajemen Ekonomi Perhitungan

Production Sharing Contract Cost Recovery Wilayah Kerja “D” di LEMIGAS.”
Laporan Kerja Praktik, Fakultas Teknik Ekplorasi dan Produksi Universitas
Pertamina.

Purba, Joshua Andika. 2019. Tekno-Ekonomi Minyak dan Gas Bumi Dengan
Perhitungan PSC ‘Cost Recovery’ pada J Field. Laporan Kerja Praktik, Fakultas
Teknik Ekplorasi dan Produksi Universitas Pertamina.
Shobah, Shofia., Widhiyanti Hanif Nur. “Cost Recovery dalam Kontrak Kerjasama
Minyak dan Gas Bumi di Indonesia Ditinjau dari Hukum Kontrak
Internasional.” Jurnal, Fakultas Hukum Universitas Brawijaya.
Permana, Imam Indra., Arvianto, Ary. 2016. Analisis Preventive dan Corrective
Maintenance Loading Arm pada PT. PERTAMINA TBBM Semarang Group.
Jurnal, Fakultas Teknik Universitas Diponegoro.

Satiyawara, Bayu., Pramadika, Havidh. 2018. “Pengaruh Perubahan Harga Minyak

terhadap Keekonomian Blok XY dengan PSC.” Jurnal, Fakultas Teknologi
Kebumian Universitas Trisakti.
Strategi Bertahan di Masa Sulit. Buletin SKK Migas edisi April, 2020.

Nandasari, Poppy.,Priadhitama, Ilham. 2016. “Analisis Keekonomian Proyek

Perusahaan Minyak dan Gas Bumi: Studi Kasus ABC Oil.” Jurnal, Fakultas
Teknik Universitas Sebelas Maret.

Sunindyo. (2000). Pengolahan Lapangan Migas Panas Bumi (Field Management).

Fakultas Teknologi Mineral Universitas Pembangunan Nasional “Veteran”
Yogyakarta.
Oil and Gas in Indonesia (Investment and Taxation Guide). Jurnal Pricewaterhouse
Coopers (pwc) edisi 10 September 2019.

~ 50 ~
 | References

Redefining Pipeline Operations. Baker Huges Bulletin, edition 2013

(www.intillegentpipilinesolution.com)

~ 51 ~
 11
APENDIXES

~ 52 ~
 | Chapter XI : Appendixes

APPENDIXES

1. Economy Analysis Cutting Rate Production

Cut Production
From 755000 bbl/day= 0,75 MMBOPD
To 705000 bbl/day= 0,705 MMBOPD
Cut production rate = 1,063829787 %

Tabel 1.1.
Tabulation of Field X Economic Calculation
CAPEX OPEX SUM
TIME PRODUKSI OIL
CAPITAL N.CAP Fixed OPEX ASR CAPEX Expenditure
Tahun MMbbl MM MM MM
0 0,091 $ 79,05 $ 39,2 $ 18,159 $ 42,16 $ 118,25 $ 125,00
1 0,074 $ 39,2 $ 14,726 $ 42,16 $ 118,25 $ 175,13
2 0,061 $ 39,2 $ 12,139 $ 42,16 $ 118,25 $ 172,55
3 0,050 $ 39,2 $ 9,950 $ 42,16 $ 118,25 $ 170,36
4 0,041 $ 39,2 $ 8,159 $ 42,16 $ 118,25 $ 168,57
5 0,033 $ 39,2 $ 6,567 $ 42,16 $ 118,25 $ 166,97
6 0,027 $ 39,2 $ 5,373 $ 42,16 $ 118,25 $ 165,78
7 0,022 $ 39,2 $ 4,378 $ 42,16 $ 118,25 $ 164,78
8 0,018 $ 39,2 $ 3,582 $ 42,16 $ 118,25 $ 163,99
9 0,015 $ 39,2 $ 2,985 $ 42,16 $ 118,25 $ 163,39
10 0,012 $ 39,2 $ 2,388 $ 42,16 $ 118,25 $ 162,79
11 0,010 $ 39,2 $ 1,990 $ 42,16 $ 118,25 $ 162,40
12 0,008 $ 39,2 $ 1,592 $ 42,16 $ 118,25 $ 162,00
13 0,006 $ 39,2 $ 1,194 $ 42,16 $ 118,25 $ 161,60
14 0,007 $ 39,2 $ 1,333 $ 42,16 $ 118,25 $ 161,74
15 0,006 $ 39,2 $ 1,095 $ 42,16 $ 118,25 $ 161,50
16 0,005 $ 39,2 $ 0,896 $ 42,16 $ 118,25 $ 161,30
17 0,004 $ 39,2 $ 0,736 $ 42,16 $ 118,25 $ 161,14
18 0,0269 $ 39,2 $ 5,345 $ 42,16 $ 118,25 $ 165,75
Total 0,5155 $ 79,05 $ 744,8 $ 102,59 $ 801,04 $ 2.246,68 $ 3.096,74

~ 53 ~
 | Chapter XI : Appendixes

Escalation Escalation Escalation

GR FTP Gov FTP Cont. FTP RR Depreciation Max CR
Factor Capital OPEX
MM MM MM MM MM MM MM MM MM MM
$ 1.825,00 $ 365,00 $ 119,62 $ 245,38 $ 1.460,00 $ 14,81 $ 1,00 $ 79,05 $ 60,32 $ 1.460,00
$ 1.480,00 $ 296,00 $ 97,01 $ 198,99 $ 1.184,00 $ 11,65 $ 1,07 $ 84,58 $ 60,87 $ 1.184,00
$ 1.220,00 $ 244,00 $ 79,97 $ 164,03 $ 976,00 $ 9,12 $ 1,14 $ 90,50 $ 62,17 $ 976,00
$ 1.000,00 $ 200,00 $ 65,55 $ 134,45 $ 800,00 $ 7,09 $ 1,23 $ 96,84 $ 63,84 $ 800,00
$ 820,00 $ 164,00 $ 53,75 $ 110,25 $ 656,00 $ 5,48 $ 1,31 $ 103,61 $ 65,96 $ 656,00
$ 660,00 $ 132,00 $ 43,26 $ 88,74 $ 528,00 $ 4,18 $ 1,40 $ 110,87 $ 68,34 $ 528,00
$ 540,00 $ 108,00 $ 35,39 $ 72,61 $ 432,00 $ 3,14 $ 1,50 $ 118,63 $ 71,33 $ 432,00
$ 440,00 $ 88,00 $ 28,84 $ 59,16 $ 352,00 $ 2,32 $ 1,61 $ 126,93 $ 74,73 $ 352,00
$ 360,00 $ 72,00 $ 23,60 $ 48,40 $ 288,00 $ 1,65 $ 1,72 $ 135,82 $ 78,59 $ 288,00
$ 300,00 $ 60,00 $ 19,66 $ 40,34 $ 240,00 $ 1,12 $ 1,84 $ 145,32 $ 83,00 $ 240,00
$ 240,00 $ 48,00 $ 15,73 $ 32,27 $ 192,00 $ 0,70 $ 1,97 $ 155,50 $ 87,63 $ 192,00
$ 200,00 $ 40,00 $ 13,11 $ 26,89 $ 160,00 $ 0,36 $ 2,10 $ 166,38 $ 92,93 $ 160,00
$ 160,00 $ 32,00 $ 10,49 $ 21,51 $ 128,00 $ 0,09 $ 2,25 $ 178,03 $ 98,54 $ 128,00
$ 120,00 $ 24,00 $ 7,87 $ 16,13 $ 96,00 $ (0,13) $ 2,41 $ 190,49 $ 104,48 $ 96,00
$ 134,00 $ 26,80 $ 8,78 $ 18,02 $ 107,20 $ (0,30) $ 2,58 $ 203,82 $ 112,15 $ 107,20
$ 110,00 $ 22,00 $ 7,21 $ 14,79 $ 88,00 $ (0,44) $ 2,76 $ 218,09 $ 119,34 $ 88,00
$ 90,00 $ 18,00 $ 5,90 $ 12,10 $ 72,00 $ (0,56) $ 2,95 $ 233,36 $ 127,11 $ 72,00
$ 74,00 $ 14,80 $ 4,85 $ 9,95 $ 59,20 $ (0,64) $ 3,16 $ 249,69 $ 135,50 $ 59,20
$ 537,19 $ 107,44 $ 35,21 $ 72,23 $ 429,75 $ (0,72) $ 3,38 $ 267,17 $ 160,56 $ 429,75
$ 10.310,19 $ 2.062,04 $ 675,79 $ 1.386,24 $ 8.248,15 $ 58,91 $ 37,38 $ 2.954,68 $ 1.727,38 $ 8.248,15

IC UR CR Rec ES Contractor Share Government Share DMO DMO Fee

MM MM MM MM MM MM MM MM MM
$ 114,33 $ 114,33 $ 220,84 $ 55,21
$ 5,53 $ 5,53 $ 117,25 $ 122,78 $ 1.061,22 $ 713,42 $ 347,79 $ 179,09 $ 44,77
$ 110,48 $ 110,48 $ 865,52 $ 581,86 $ 283,66 $ 147,63 $ 36,91
$ 110,13 $ 110,13 $ 689,87 $ 463,78 $ 226,09 $ 121,01 $ 30,25
$ 110,63 $ 110,63 $ 545,37 $ 366,63 $ 178,73 $ 99,23 $ 24,81
$ 111,72 $ 111,72 $ 416,28 $ 279,85 $ 136,43 $ 79,87 $ 19,97
$ 113,68 $ 113,68 $ 318,32 $ 214,00 $ 104,32 $ 65,34 $ 16,34
$ 116,25 $ 116,25 $ 235,75 $ 158,49 $ 77,26 $ 53,24 $ 13,31
$ 119,45 $ 119,45 $ 168,55 $ 113,31 $ 55,24 $ 43,56 $ 10,89
$ 123,32 $ 123,32 $ 116,68 $ 78,44 $ 38,24 $ 36,30 $ 9,08
$ 127,53 $ 127,53 $ 64,47 $ 43,34 $ 21,13 $ 29,04 $ 7,26
$ 132,49 $ 132,49 $ 27,51 $ 18,50 $ 9,02 $ 24,20 $ 6,05
$ 137,82 $ 137,82 $ (9,82) $ (6,60) $ (3,22) $ 19,36 $ 4,84
$ 143,55 $ 143,55 $ (47,55) $ (31,96) $ (15,58) $ 14,52 $ 3,63
$ 151,04 $ 151,04 $ (43,84) $ (29,48) $ (14,37) $ 16,22 $ 4,05
$ 158,10 $ 158,10 $ (70,10) $ (47,12) $ (22,97) $ 13,31 $ 3,33
$ 165,75 $ 165,75 $ (93,75) $ (63,03) $ (30,73) $ 10,89 $ 2,72
$ 174,06 $ 174,06 $ (114,86) $ (77,22) $ (37,64) $ 8,95 $ 2,24
$ 199,05 $ 199,05 $ 230,70 $ 155,09 $ 75,61 $ 65,00 $ 16,25
$ 5,5 $ 5,533 $ 2.536,62 $ 2.542,16 $ 4.360,32 $ 2.931,31 $ 1.429,01 $ 1.247,62 $ 311,90

~ 54 ~
 | Chapter XI : Appendixes

Discount Rate Discount Rate

NCS TCS CCF NPV NPV
10% 12%
MM MM MM MM MM MM MM
$ (131,40) $ (17,07) $ (142,07) $ 1,00 $ (142,07) $ 1,00 $ (142,07)
$ 321,22 $ 438,47 $ 263,34 $ 0,91 $ 239,40 $ 0,89 $ 235,12
$ 258,37 $ 368,85 $ 196,31 $ 0,83 $ 162,24 $ 0,80 $ 156,49
$ 203,95 $ 314,08 $ 143,72 $ 0,75 $ 107,98 $ 0,71 $ 102,30
$ 159,11 $ 269,74 $ 101,17 $ 0,68 $ 69,10 $ 0,64 $ 64,30
$ 118,99 $ 230,71 $ 63,74 $ 0,62 $ 39,58 $ 0,57 $ 36,17
$ 88,45 $ 202,13 $ 36,35 $ 0,56 $ 20,52 $ 0,51 $ 18,41
$ 62,62 $ 178,87 $ 14,08 $ 0,51 $ 7,23 $ 0,45 $ 6,37
$ 41,50 $ 160,95 $ (3,04) $ 0,47 $ (1,42) $ 0,40 $ (1,23)
$ 25,07 $ 148,39 $ (15,00) $ 0,42 $ (6,36) $ 0,36 $ (5,41)
$ 8,51 $ 136,04 $ (26,76) $ 0,39 $ (10,32) $ 0,32 $ (8,61)
$ (3,39) $ 129,09 $ (33,30) $ 0,35 $ (11,67) $ 0,29 $ (9,57)
$ (15,45) $ 122,37 $ (39,62) $ 0,32 $ (12,63) $ 0,26 $ (10,17)
$ (27,66) $ 115,89 $ (45,71) $ 0,29 $ (13,24) $ 0,23 $ (10,48)
$ (27,19) $ 123,86 $ (37,88) $ 0,26 $ (9,98) $ 0,20 $ (7,75)
$ (35,96) $ 122,14 $ (39,36) $ 0,24 $ (9,42) $ 0,18 $ (7,19)
$ (43,98) $ 121,77 $ (39,53) $ 0,22 $ (8,60) $ 0,16 $ (6,45)
$ (51,27) $ 122,79 $ (38,36) $ 0,20 $ (7,59) $ 0,15 $ (5,59)
$ 53,60 $ 252,65 $ 86,90 $ 0,18 $ 15,63 $ 0,13 $ 11,30
$ 1.005,09 $ 3.541,71 $ 444,97 $ 9,20 $ 428,37 $ 8,25 $ 415,95

r 10% 12%
NPV $ 428,37 $ 415,95

Grafik r vs NPV
$430.00

$425.00

$420.00

$415.00
IRR=
11,015%
$410.00
10% 10% 11% 11% 12% 12% 13%

N1 0
N2 2

PIR $ 0,54

~ 55 ~
 | Chapter XI : Appendixes

IRR 11,015%
POT 1,19 Tahun

2. Economy Analysis Not Cutting Rate Production

 If cutting the production rate is not done, but the demand decreases by 30%,
then the additional production will be 0,03523 MMBOPD.
 Thus, oil companies will then add the cost of CAPEX and OPEX for
manufacturing oil refineries as well as maintenance cost.
Tabel 2.1.
Cost Estimatition of Design Fasilities Not Cutting Rate Production
Capex Facilities
Surface Facilities Qty Price
Wellhead 4 1,0 MM$
Flowline 36075 2,1645 MM$
Manifold 1 0,008 MM$
Separator 3 0,9 MM$
CAPEX Chocke 4 0,004 MM$
Compresor 1 0,8 MM$
Oil Storage Tank 2 0,20 MM$
Production Facilities 73,97 MM$
Total 102,05 MM$
Non Capital
G&G, Drilling Cost, Well test, etc 39,2 MM$

Fixed Annual Cost 220,03 MM$

ASR (Pipe Line Gas)
OPEX Gas Processing +Onshore Pipeline +Jetty 33,3 MM$
Well (P&A and Reboisation) 8,86 MM$
Total 42,16 MM$

Sunk Cost 910 MM$

~ 56 ~
 | Chapter XI : Appendixes

Tabel 2.2.
Tabulation of Field X Economic Calculation

CAPEX OPEX SUM

TIME PRODUKSI OIL
CAPITAL N.CAP Fixed OPEX ASR CAPEX Expenditure
Tahun MMbbl MM MM MM
0 0,091 $ 102,05 $ 39,2 $ 18,159 $ 42,16 $ 141,25 $ 201,57
1 0,074 $ 39,2 $ 14,726 $ 42,16 $ 141,25 $ 198,13
2 0,061 $ 39,2 $ 12,139 $ 42,16 $ 141,25 $ 195,55
3 0,050 $ 39,2 $ 9,950 $ 42,16 $ 141,25 $ 193,36
4 0,041 $ 39,2 $ 8,159 $ 42,16 $ 141,25 $ 191,57
5 0,033 $ 39,2 $ 6,567 $ 42,16 $ 141,25 $ 189,97
6 0,027 $ 39,2 $ 5,373 $ 42,16 $ 141,25 $ 188,78
7 0,022 $ 39,2 $ 4,378 $ 42,16 $ 141,25 $ 187,78
8 0,018 $ 39,2 $ 3,582 $ 42,16 $ 141,25 $ 186,99
9 0,015 $ 39,2 $ 2,985 $ 42,16 $ 141,25 $ 186,39
10 0,012 $ 39,2 $ 2,388 $ 42,16 $ 141,25 $ 185,79
11 0,010 $ 39,2 $ 1,990 $ 42,16 $ 141,25 $ 185,40
12 0,008 $ 39,2 $ 1,592 $ 42,16 $ 141,25 $ 185,00
13 0,006 $ 39,2 $ 1,194 $ 42,16 $ 141,25 $ 184,60
14 0,007 $ 39,2 $ 1,333 $ 42,16 $ 141,25 $ 184,74
15 0,006 $ 39,2 $ 1,095 $ 42,16 $ 141,25 $ 184,50
16 0,005 $ 39,2 $ 0,896 $ 42,16 $ 141,25 $ 184,30
17 0,004 $ 39,2 $ 0,736 $ 42,16 $ 141,25 $ 184,14
18 0,035 $ 102,05 $ 39,2 $ 7,751 $ 42,16 $ 141,25 $ 191,16
Total 0,524 $ 204,093 $ 744,8 $ 104,99 $ 801,04 $ 2.683,68 $ 3.589,72

Escalation Escalation Escalation

GR FTP Gov FTP Cont. FTP RR Depreciation Max CR
Factor Capital OPEX
MM MM MM MM MM MM MM MM MM MM
$ 1.825,00 $ 365,00 $ 119,62 $ 245,38 $ 1.460,00 $ 19,41 $ 1,00 $ 102,05 $ 60,32 $ 1.460,00
$ 1.480,00 $ 296,00 $ 97,01 $ 198,99 $ 1.184,00 $ 15,33 $ 1,07 $ 109,19 $ 60,87 $ 1.184,00
$ 1.220,00 $ 244,00 $ 79,97 $ 164,03 $ 976,00 $ 12,06 $ 1,14 $ 116,83 $ 62,17 $ 976,00
$ 1.000,00 $ 200,00 $ 65,55 $ 134,45 $ 800,00 $ 9,45 $ 1,23 $ 125,01 $ 63,84 $ 800,00
$ 820,00 $ 164,00 $ 53,75 $ 110,25 $ 656,00 $ 7,36 $ 1,31 $ 133,76 $ 65,96 $ 656,00
$ 660,00 $ 132,00 $ 43,26 $ 88,74 $ 528,00 $ 5,69 $ 1,40 $ 143,13 $ 68,34 $ 528,00
$ 540,00 $ 108,00 $ 35,39 $ 72,61 $ 432,00 $ 4,35 $ 1,50 $ 153,14 $ 71,33 $ 432,00
$ 440,00 $ 88,00 $ 28,84 $ 59,16 $ 352,00 $ 3,28 $ 1,61 $ 163,86 $ 74,73 $ 352,00
$ 360,00 $ 72,00 $ 23,60 $ 48,40 $ 288,00 $ 2,42 $ 1,72 $ 175,33 $ 78,59 $ 288,00
$ 300,00 $ 60,00 $ 19,66 $ 40,34 $ 240,00 $ 1,74 $ 1,84 $ 187,61 $ 83,00 $ 240,00
$ 240,00 $ 48,00 $ 15,73 $ 32,27 $ 192,00 $ 1,19 $ 1,97 $ 200,74 $ 87,63 $ 192,00
$ 200,00 $ 40,00 $ 13,11 $ 26,89 $ 160,00 $ 0,75 $ 2,10 $ 214,79 $ 92,93 $ 160,00
$ 160,00 $ 32,00 $ 10,49 $ 21,51 $ 128,00 $ 0,40 $ 2,25 $ 229,83 $ 98,54 $ 128,00
$ 120,00 $ 24,00 $ 7,87 $ 16,13 $ 96,00 $ 0,12 $ 2,41 $ 245,92 $ 104,48 $ 96,00
$ 134,00 $ 26,80 $ 8,78 $ 18,02 $ 107,20 $ (0,10) $ 2,58 $ 263,13 $ 112,15 $ 107,20
$ 110,00 $ 22,00 $ 7,21 $ 14,79 $ 88,00 $ (0,28) $ 2,76 $ 281,55 $ 119,34 $ 88,00
$ 90,00 $ 18,00 $ 5,90 $ 12,10 $ 72,00 $ (0,43) $ 2,95 $ 301,26 $ 127,11 $ 72,00
$ 74,00 $ 14,80 $ 4,85 $ 9,95 $ 59,20 $ (0,54) $ 3,16 $ 322,35 $ 135,50 $ 59,20
$ 704,60 $ 140,92 $ 46,18 $ 94,74 $ 563,68 $ (0,63) $ 3,38 $ 344,91 $ 168,70 $ 563,68
$ 10.477,60 $ 2.095,52 $ 686,77 $ 1.408,75 $ 8.382,08 $ 81,58 $ 37,38 $ 3.814,39 $ 1.735,52 $ 8.382,08

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 | Chapter XI : Appendixes

IC UR CR Rec ES Contractor Share Government Share DMO DMO Fee

MM MM MM MM MM MM MM MM MM
$ 118,93 $ 118,93 $ 220,84 $ 55,21
$ 7,14 $ 7,14 $ 122,54 $ 129,68 $ 1.054,32 $ 708,79 $ 345,53 $ 179,09 $ 44,77
$ 113,43 $ 113,43 $ 862,57 $ 579,88 $ 282,69 $ 147,63 $ 36,91
$ 112,49 $ 112,49 $ 687,51 $ 462,19 $ 225,32 $ 121,01 $ 30,25
$ 112,52 $ 112,52 $ 543,48 $ 365,37 $ 178,12 $ 99,23 $ 24,81
$ 113,23 $ 113,23 $ 414,77 $ 278,84 $ 135,93 $ 79,87 $ 19,97
$ 114,88 $ 114,88 $ 317,12 $ 213,19 $ 103,93 $ 65,34 $ 16,34
$ 117,21 $ 117,21 $ 234,79 $ 157,84 $ 76,95 $ 53,24 $ 13,31
$ 120,22 $ 120,22 $ 167,78 $ 112,80 $ 54,99 $ 43,56 $ 10,89
$ 123,94 $ 123,94 $ 116,06 $ 78,03 $ 38,04 $ 36,30 $ 9,08
$ 128,02 $ 128,02 $ 63,98 $ 43,01 $ 20,97 $ 29,04 $ 7,26
$ 132,88 $ 132,88 $ 27,12 $ 18,23 $ 8,89 $ 24,20 $ 6,05
$ 138,14 $ 138,14 $ (10,14) $ (6,82) $ (3,32) $ 19,36 $ 4,84
$ 143,80 $ 143,80 $ (47,80) $ (32,13) $ (15,67) $ 14,52 $ 3,63
$ 151,25 $ 151,25 $ (44,05) $ (29,61) $ (14,44) $ 16,22 $ 4,05
$ 158,26 $ 158,26 $ (70,26) $ (47,23) $ (23,03) $ 13,31 $ 3,33
$ 165,88 $ 165,88 $ (93,88) $ (63,11) $ (30,77) $ 10,89 $ 2,72
$ 174,16 $ 174,16 $ (114,96) $ (77,28) $ (37,68) $ 8,95 $ 2,24
$ 207,27 $ 207,27 $ 356,41 $ 239,61 $ 116,81 $ 85,26 $ 21,32
$ 7,1 $ 7,143 $ 2.569,04 $ 2.576,18 $ 4.464,83 $ 3.001,57 $ 1.463,26 $ 1.267,88 $ 316,97

Discount Rate Discount Rate

NCS TCS CCF NPV NPV
10% 12%
MM MM MM MM MM MM MM
$ (131,40) $ (12,47) $ (214,04) $ 1,00 $ (214,04) $ 1,00 $ (214,04)
$ 319,42 $ 441,96 $ 243,82 $ 0,91 $ 221,66 $ 0,89 $ 217,70
$ 257,19 $ 370,62 $ 175,07 $ 0,83 $ 144,69 $ 0,80 $ 139,57
$ 203,01 $ 315,49 $ 122,14 $ 0,75 $ 91,76 $ 0,71 $ 86,93
$ 158,35 $ 270,87 $ 79,31 $ 0,68 $ 54,17 $ 0,64 $ 50,40
$ 118,39 $ 231,62 $ 41,64 $ 0,62 $ 25,86 $ 0,57 $ 23,63
$ 87,97 $ 202,85 $ 14,07 $ 0,56 $ 7,94 $ 0,51 $ 7,13
$ 62,24 $ 179,45 $ (8,34) $ 0,51 $ (4,28) $ 0,45 $ (3,77)
$ 41,19 $ 161,41 $ (25,58) $ 0,47 $ (11,93) $ 0,40 $ (10,33)
$ 24,83 $ 148,76 $ (37,63) $ 0,42 $ (15,96) $ 0,36 $ (13,57)
$ 8,31 $ 136,33 $ (49,46) $ 0,39 $ (19,07) $ 0,32 $ (15,92)
$ (3,55) $ 129,33 $ (56,07) $ 0,35 $ (19,65) $ 0,29 $ (16,12)
$ (15,58) $ 122,56 $ (62,43) $ 0,32 $ (19,89) $ 0,26 $ (16,03)
$ (27,76) $ 116,04 $ (68,56) $ 0,29 $ (19,86) $ 0,23 $ (15,71)
$ (27,27) $ 123,98 $ (60,76) $ 0,26 $ (16,00) $ 0,20 $ (12,43)
$ (36,02) $ 122,24 $ (62,27) $ 0,24 $ (14,91) $ 0,18 $ (11,38)
$ (44,03) $ 121,85 $ (62,45) $ 0,22 $ (13,59) $ 0,16 $ (10,19)
$ (51,31) $ 122,85 $ (61,29) $ 0,20 $ (12,13) $ 0,15 $ (8,93)
$ 91,83 $ 299,10 $ 107,94 $ 0,18 $ 19,41 $ 0,13 $ 14,04
$ 1.035,79 $ 3.604,83 $ 15,11 $ 9,20 $ 184,18 $ 8,25 $ 190,98

r 10% 12%
NPV $ 184,18 $ 190,98

~ 58 ~
 | Chapter XI : Appendixes

Grafik r vs NPV
$200.00

$195.00 IRR=
10,982%
$190.00

$185.00

$180.00
10% 10% 11% 11% 12% 12% 13%

N1 0
N2 2

PIR $ 0,02
IRR 10,982%
POT 1,93 Years

3. Economic Analysis Solution

 In this situation, the right solution is to cut costs for both CAPEX and OPEX by
22-30%.
Tabel 3.1.
Tabulation of Field X Economic Calculation (Solution)

~ 59 ~
 | Chapter XI : Appendixes

CAPEX OPEX SUM

TIME PRODUKSI OIL
CAPITAL N.CAP Fixed OPEX ASR CAPEX Expenditure
Tahun MMbbl MM MM MM
0 0,091 $ 79,05 $ 39,2 $ 18,159 $ 42,16 $ 118,25 $ 133,92
1 0,074 $ 39,2 $ 14,726 $ 42,16 $ 118,25 $ 131,35
2 0,061 $ 39,2 $ 12,139 $ 42,16 $ 118,25 $ 129,41
3 0,050 $ 39,2 $ 9,950 $ 42,16 $ 118,25 $ 127,77
4 0,041 $ 39,2 $ 8,159 $ 42,16 $ 118,25 $ 126,42
5 0,033 $ 39,2 $ 6,567 $ 42,16 $ 118,25 $ 125,23
6 0,027 $ 39,2 $ 5,373 $ 42,16 $ 118,25 $ 124,33
7 0,022 $ 39,2 $ 4,378 $ 42,16 $ 118,25 $ 123,59
8 0,018 $ 39,2 $ 3,582 $ 42,16 $ 118,25 $ 122,99
9 0,015 $ 39,2 $ 2,985 $ 42,16 $ 118,25 $ 122,54
10 0,012 $ 39,2 $ 2,388 $ 42,16 $ 118,25 $ 122,10
11 0,010 $ 39,2 $ 1,990 $ 42,16 $ 118,25 $ 121,80
12 0,008 $ 39,2 $ 1,592 $ 42,16 $ 118,25 $ 121,50
13 0,006 $ 39,2 $ 1,194 $ 42,16 $ 118,25 $ 121,20
14 0,007 $ 39,2 $ 1,333 $ 42,16 $ 118,25 $ 121,30
15 0,006 $ 39,2 $ 1,095 $ 42,16 $ 118,25 $ 121,13
16 0,005 $ 39,2 $ 0,896 $ 42,16 $ 118,25 $ 120,98
17 0,004 $ 39,2 $ 0,736 $ 42,16 $ 118,25 $ 120,86
18 0,0268 $ 39,2 $ 5,336 $ 42,16 $ 118,25 $ 124,31
Total 0,515 $ 79,047 $ 744,8 $ 102,58 $ 801,04 $ 2.246,68 $ 2.362,73

Escalation Escalation Escalation

GR FTP Gov FTP Cont. FTP RR Depreciation Max CR
Factor Capital OPEX
MM MM MM MM MM MM MM MM MM MM
$ 1.825,00 $ 365,00 $ 119,62 $ 245,38 $ 1.460,00 $ 14,81 $ 1,00 $ 79,05 $ 60,32 $ 1.460,00
$ 1.480,00 $ 296,00 $ 97,01 $ 198,99 $ 1.184,00 $ 11,65 $ 1,07 $ 84,58 $ 60,87 $ 1.184,00
$ 1.220,00 $ 244,00 $ 79,97 $ 164,03 $ 976,00 $ 9,12 $ 1,14 $ 90,50 $ 62,17 $ 976,00
$ 1.000,00 $ 200,00 $ 65,55 $ 134,45 $ 800,00 $ 7,09 $ 1,23 $ 96,84 $ 63,84 $ 800,00
$ 820,00 $ 164,00 $ 53,75 $ 110,25 $ 656,00 $ 5,48 $ 1,31 $ 103,61 $ 65,96 $ 656,00
$ 660,00 $ 132,00 $ 43,26 $ 88,74 $ 528,00 $ 4,18 $ 1,40 $ 110,87 $ 68,34 $ 528,00
$ 540,00 $ 108,00 $ 35,39 $ 72,61 $ 432,00 $ 3,14 $ 1,50 $ 118,63 $ 71,33 $ 432,00
$ 440,00 $ 88,00 $ 28,84 $ 59,16 $ 352,00 $ 2,32 $ 1,61 $ 126,93 $ 74,73 $ 352,00
$ 360,00 $ 72,00 $ 23,60 $ 48,40 $ 288,00 $ 1,65 $ 1,72 $ 135,82 $ 78,59 $ 288,00
$ 300,00 $ 60,00 $ 19,66 $ 40,34 $ 240,00 $ 1,12 $ 1,84 $ 145,32 $ 83,00 $ 240,00
$ 240,00 $ 48,00 $ 15,73 $ 32,27 $ 192,00 $ 0,70 $ 1,97 $ 155,50 $ 87,63 $ 192,00
$ 200,00 $ 40,00 $ 13,11 $ 26,89 $ 160,00 $ 0,36 $ 2,10 $ 166,38 $ 92,93 $ 160,00
$ 160,00 $ 32,00 $ 10,49 $ 21,51 $ 128,00 $ 0,09 $ 2,25 $ 178,03 $ 98,54 $ 128,00
$ 120,00 $ 24,00 $ 7,87 $ 16,13 $ 96,00 $ (0,13) $ 2,41 $ 190,49 $ 104,48 $ 96,00
$ 134,00 $ 26,80 $ 8,78 $ 18,02 $ 107,20 $ (0,30) $ 2,58 $ 203,82 $ 112,15 $ 107,20
$ 110,00 $ 22,00 $ 7,21 $ 14,79 $ 88,00 $ (0,44) $ 2,76 $ 218,09 $ 119,34 $ 88,00
$ 90,00 $ 18,00 $ 5,90 $ 12,10 $ 72,00 $ (0,56) $ 2,95 $ 233,36 $ 127,11 $ 72,00
$ 74,00 $ 14,80 $ 4,85 $ 9,95 $ 59,20 $ (0,64) $ 3,16 $ 249,69 $ 135,50 $ 59,20
$ 536,25 $ 107,25 $ 35,15 $ 72,10 $ 429,00 $ (0,72) $ 3,38 $ 267,17 $ 160,53 $ 429,00
$ 10.309,25 $ 2.061,85 $ 675,73 $ 1.386,12 $ 8.247,40 $ 58,91 $ 37,38 $ 2.954,68 $ 1.727,35 $ 8.247,40

~ 60 ~
 | Chapter XI : Appendixes

IC UR CR Rec ES Contractor Share Government Share DMO DMO Fee

MM MM MM MM MM MM MM MM MM
$ 114,33 $ 114,33 $ 220,84 $ 55,21
$ 5,53 $ 5,53 $ 117,25 $ 122,78 $ 1.061,22 $ 713,42 $ 347,79 $ 179,09 $ 44,77
$ 110,48 $ 110,48 $ 865,52 $ 581,86 $ 283,66 $ 147,63 $ 36,91
$ 110,13 $ 110,13 $ 689,87 $ 463,78 $ 226,09 $ 121,01 $ 30,25
$ 110,63 $ 110,63 $ 545,37 $ 366,63 $ 178,73 $ 99,23 $ 24,81
$ 111,72 $ 111,72 $ 416,28 $ 279,85 $ 136,43 $ 79,87 $ 19,97
$ 113,68 $ 113,68 $ 318,32 $ 214,00 $ 104,32 $ 65,34 $ 16,34
$ 116,25 $ 116,25 $ 235,75 $ 158,49 $ 77,26 $ 53,24 $ 13,31
$ 119,45 $ 119,45 $ 168,55 $ 113,31 $ 55,24 $ 43,56 $ 10,89
$ 123,32 $ 123,32 $ 116,68 $ 78,44 $ 38,24 $ 36,30 $ 9,08
$ 127,53 $ 127,53 $ 64,47 $ 43,34 $ 21,13 $ 29,04 $ 7,26
$ 132,49 $ 132,49 $ 27,51 $ 18,50 $ 9,02 $ 24,20 $ 6,05
$ 137,82 $ 137,82 $ (9,82) $ (6,60) $ (3,22) $ 19,36 $ 4,84
$ 143,55 $ 143,55 $ (47,55) $ (31,96) $ (15,58) $ 14,52 $ 3,63
$ 151,04 $ 151,04 $ (43,84) $ (29,48) $ (14,37) $ 16,22 $ 4,05
$ 158,10 $ 158,10 $ (70,10) $ (47,12) $ (22,97) $ 13,31 $ 3,33
$ 165,75 $ 165,75 $ (93,75) $ (63,03) $ (30,73) $ 10,89 $ 2,72
$ 174,06 $ 174,06 $ (114,86) $ (77,22) $ (37,64) $ 8,95 $ 2,24
$ 199,02 $ 199,02 $ 229,99 $ 154,61 $ 75,37 $ 64,89 $ 16,22
$ 5,5 $ 5,533 $ 2.536,59 $ 2.542,13 $ 4.359,61 $ 2.930,83 $ 1.428,78 $ 1.247,51 $ 311,88

Discount Rate Discount Rate

NCS TCS CCF NPV NPV
10% 12%
MM MM MM MM MM MM MM
$ (131,40) $ (17,07) $ (151,00) $ 1,00 $ (151,00) $ 1,00 $ (151,00)
$ 321,22 $ 438,47 $ 307,12 $ 0,91 $ 279,20 $ 0,89 $ 274,21
$ 258,37 $ 368,85 $ 239,44 $ 0,83 $ 197,89 $ 0,80 $ 190,88
$ 203,95 $ 314,08 $ 186,31 $ 0,75 $ 139,98 $ 0,71 $ 132,61
$ 159,11 $ 269,74 $ 143,32 $ 0,68 $ 97,89 $ 0,64 $ 91,08
$ 118,99 $ 230,71 $ 105,48 $ 0,62 $ 65,50 $ 0,57 $ 59,85
$ 88,45 $ 202,13 $ 77,79 $ 0,56 $ 43,91 $ 0,51 $ 39,41
$ 62,62 $ 178,87 $ 55,28 $ 0,51 $ 28,37 $ 0,45 $ 25,01
$ 41,50 $ 160,95 $ 37,96 $ 0,47 $ 17,71 $ 0,40 $ 15,33
$ 25,07 $ 148,39 $ 25,85 $ 0,42 $ 10,96 $ 0,36 $ 9,32
$ 8,51 $ 136,04 $ 13,94 $ 0,39 $ 5,38 $ 0,32 $ 4,49
$ (3,39) $ 129,09 $ 7,29 $ 0,35 $ 2,56 $ 0,29 $ 2,10
$ (15,45) $ 122,37 $ 0,88 $ 0,32 $ 0,28 $ 0,26 $ 0,22
$ (27,66) $ 115,89 $ (5,31) $ 0,29 $ (1,54) $ 0,23 $ (1,22)
$ (27,19) $ 123,86 $ 2,55 $ 0,26 $ 0,67 $ 0,20 $ 0,52
$ (35,96) $ 122,14 $ 1,01 $ 0,24 $ 0,24 $ 0,18 $ 0,18
$ (43,98) $ 121,77 $ 0,79 $ 0,22 $ 0,17 $ 0,16 $ 0,13
$ (51,27) $ 122,79 $ 1,93 $ 0,20 $ 0,38 $ 0,15 $ 0,28
$ 53,38 $ 252,40 $ 128,09 $ 0,18 $ 23,04 $ 0,13 $ 16,66
$ 1.004,87 $ 3.541,46 $ 1.178,74 $ 9,20 $ 761,58 $ 8,25 $ 710,08

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 | Chapter XI : Appendixes

r 10% 12%
NPV $ 761,58 $ 710,08

Grafik r vs NPV
$770.00
$760.00
$750.00 IRR=
$740.00
11,035%
$730.00
$720.00
$710.00
$700.00
10% 10% 11% 11% 12% 12% 13%

N1 0
N2 2
PIR $ 1,43
IRR 11,035%
POT 1,08 Years

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