Economic

Reservoir

Drilling

Number of
wells
Drive
mechanism
Production
forecast

Type of rig

Production Facilities
technology Type of

platform
Gas
Major
production
equipment
rate
Oil production Production
processes
rate
Utilities
Pipe sizing
Abandonment

Objective
To analyse the economic feasibilities
and carry out economic evaluation
for proposed condition by geology
team, reservoir engineering team,
and production technologist based on
NPV and IRR.

Fiscal Term

Fiscal Term (PSC)

Royalty rate 10%

Ceiling rate 50%
Profit sharing 60:40
Oil base price $US 40
Tax rate 38%

Economic Assumptions
Base Case
The proposed based case from the reservoir development are 17 wells through zone M2/3, M7/8, M9/14, and
M15 with water injection.
Reference Year
The reference year for Berlian Field is the year of evaluation.
Production Period
A production period of 15 years.
Decommissioning Year
Decommissioning period will be after 20 years of production period.
Cash Flow Model
The cash flow model is assumed to be in Money of the Day term.
Base Oil Price
The oil price is to be assumed as USD 40/bbl, and escalation of 5.0% per year. The increment of oil price also
to be assumed with escalation up to USD 120/bbl.
Operating Cost
The fixed OPEX is obtained to approximately USD 25 million per year which consist of tender assisted rig,
CPP, pipeline for transporting oil.
Hurdle Rate for IRR
Hurdle rate for Petronas at 15% is chosen which consisted to weighted average cost of capital 8.5% and
associated risk of 1.5%.
Discount Rate
The discount rate assumed to be 10% during the evaluation according to the opportunity cost of capital,
acquisition cost of capital and risk management.

Economic Assumptions
Base case involves 17 wells through
zone of M2/3, M7/8, M9/14 and M15
Production period would be 10 years
Abandoned after production depleted
Discount rate is assumed to be 15%

Development Options
Optio Rig
n

Platfor
m

Process Exporti CAPEX OPEX

ing
ng
($MM) ($MM)

Tender Wellhead Custom

Assisted Platform
Rig

Pipeline 367.9

15.96

Tender FPSO
Assisted
Rig

Complet Pipeline 507.8

e

20.31

Tender CPP
Assisted
Rig
Tender MOPU
Assisted
Rig

Complet Pipeline 424.65

e

16.99

Complet Pipeline 434.8

e

17.39

Result
Total revenue for each year
Year

Revenue of Oil with

Natural Depletion
(US$ MM)

Revenue of Oil with

Water Injection after
5 Years( US$ MM)

700.8

700.8

582.54

582.54

398.434

398.434

272.436

272.436

186.442

186.442

127.458

200.652

87.162

190.255

59.714

101.254

56.198

80.544

Net Cash Flow Profile

Development
phase

2000

Abandonmen
t
phase

Production
phase

1500

1000

$US MM

Net Cash
Flow

500

Cumulati
ve Cash
Flow
1

-500

Year

10

11

12

13

14

Net Cash Flow with Water Injection

after 5 years
Development
Abandonmen
Production
phase

phase

2000

t
phase

1500

Net Cash
Flow

1000

Net Cash
Flow with
Water
Injection

US$500
MM

-500

-1000

Year

10

11

12

13

14

Cumulative
Cash Flow
Cumulative
Cash Flow
with Water
Injection

Net Present Value

NPV
1600
1400
1200
1000
800
$US MM

NPV

600
400

IRR=48

200
0
0%
-200

%
20%

40%

60%

-400
Interest rate

80%

100%

NPV with Water Injection After 5

Years
1800
1600
1400
1200
1000

$US MM

800

NPV

600
400

IRR=62

200
0
0%
-200

%
20%

40%

60%

Interest rate

80%

100%

Revenue
Split
Contractor

One barrel

USD 11.94

USD 9.62

of oil
40 USD/bbl

Royalty
(10%)
USD 36 (Net
Revenue)

Cost
recovery
limit
(4%)
+Variable
Opex
USD 24.06

Profit Split
40:60

Petronas

USD 4

USD 14.44

Sensitivity Analysis
Sensitivity Analysis at NPV (15%)
1200
1000
$
U
S

800

M
M

400

Oil Price
Production
Capex
Opex

600

200

-0.5

+/-50%

0.5

Sensitivity Analysis with Water

Injection after 5 Years
Sensitivity Analysis at NPV (15%)
1400
1200
1000

$
U
S

Oil Price
Production
Capex
Opex

800
600

M
M

400
200
0

-0.5

0
+/-50%

0.5

Best Option

Conclusion
Option 1
Option 1 with

Drilling
Platform
Processing

Tender Assisted Rig

Wellhead Platform
Custom

Transporting Oil
from Berlian East
to Berlian
NPV at 15%
Capital Expediture
Payback Period
Economic Life
IRR
Ultimate Cash
Surplus
Maximum Cash
Sink
Profitability Index

2 Pipelines 6 (20
km)

Water Injection
after 5 Years
Tender Assisted Rig
Wellhead Platform
Custom with water
injection facilities
2 Pipelines 6 (20
km)

$ 516 Million
$ 367.9 Million
1 years
10 years
48%
$1491 Million

$ 604 Million
$ 433.9 Million
1 years
10 years
63%
$1674 Million

$ 395 Million

$ 403 Million

3.77

4.15

Recommendation
Shorter development time
Increase NPV