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The AAPG/Datapages Combined Publications Database

Indonesian Petroleum Association


29th Annual Convention Proceedings (Volume 2), 2003
Pages 1-17

Cost Effective Management Through Implementation of Alliance Contract for Submersible Pump System in P.T. Caltex Pacific Indonesia

Hasyim M. Nur, Zulkifli Suherman, Alex D. Martinez, John P. Spain


Today's business, including the oil and gas business, forces companies to be more effective and efficient if they want to survive in global competition. Reserves are decreasing while the price of goods and services required for development and operations are increasing.

Improving efficiency in managing lifting equipment, as well as managing inventory that leads to cost reduction, are now becoming more critical to the success of most companies.

Alliances, one of the many purchasing strategies, have a huge potential in Indonesia that will significantly improve efficiency of managing company assets. This strategy is an untapped opportunity for many companies in Indonesia.

PT Caltex Pacific Indonesia (CPI), as a BPMIGAS Production Sharing Contractor, has implemented an alliance strategy for full services submersible pump system (SPS). The Full Services of SPS Strategy Alliance contract include switchboard, power cable and all lifting equipments as the basic strategy. It is expected that using alliances as a managing strategy will allow CPI to increase the average SPS run life.

Beside reducing cycle time for procurement of SPS, this system will also give a significant impact in a number of SPS short run life failures, lower the average well down time, and reduce current power usage and CPI inventory, which provide PT. CPI with better cost and quality.

The estimated annual Alliance cost savings in Minas is US$ 4.5 Million plus power consumption reduction.

Alliance power consumption data are not currently available. In 2002, the Alliance strategy had reduced early life failures from 40% to 12%. In the same year, only 15% of the Alliance wells failed compared to 88% of the non-Alliance wells.

PT. CPI is estimating potential savings of several million dollars as a result of the implementation of strategic alliances. These alliances serve as a basic strategy for managing artificial lift. This paper will share processes in generating and implementing alliances as a basic strategy for managing lifting equipment in CPI. This paper will also discuss and outline the process used to generate the alliances.

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