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The AAPG/Datapages Combined Publications Database

Indonesian Petroleum Association


20th Annual Convention Proceedings (Volume 2), 1991
Pages 473-483

Economic Evaluation of Marginal, Mature Areas in Indonesia

S. Sugiharto


There are a number of relatively small reserves that can be developed, reactivated and/or enhanced in Indonesia through various projects such as development of "sub-economic" discoveries, rehabilitation of "old" fields, secondary recovery and/or Enhanced Oil Recovery (EOR).

Most of the marginal, relatively low cost, mature areas, however, are located in Pertamina's working areas. The most likely contract, therefore, is a JOA-JOB type. With such a contract type, the participating interest of a contractor would be 50 % albeit a full risk, and the contractor is required to carry Pertamina's interest before reaching commercial production. The question is whether any reasonable profit can be generated by this type of project.

Economic evaluation has been analysed for several types of fields in Indonesia. The economics are sensitive to any variation of oil prices, operating costs, production levels (recoverable reserves) and production schedule. While oil price is controlled by market factors that are beyond our control, the operator should be able to manage the costs and production schedule to get an acceptable value from the project.

Lower costs and expenditures are expected by utilizing the available resources in Indonesia whereas earlier production schedule is anticipated from proven fields and mature areas. If these can be achieved, the project is economically feasible.

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