Oil and Gas Field Development Use Floating Production Storage and Offloading (FPSO) in Improving the Economic Aspect of Company in the Gross Split Scheme

Abstract

The development of marginal oil and gas fields in the offshore area in the Gross Split
Production Sharing Contract (PSC) scheme has technical and economic challenges. This
research focuses on economic analysis of the development of marginal offshore oil and
gas fields. The field development method uses scenario development with Floating
Production Storage and Offloading (FPSO) with two production time scenarios, Scenario
I with a production time of 7 years and Scenario II with a production time of 10 years.
Economic analysis uses capital budgeting indicators, such as NPV, IRR, and Payback
Period. An economic evaluation was carried out to find the best method for developing
marginal oil and gas fields by applying the Gross Split PSC scheme. It is expected from
the development scenario, it can improve the company's economy. The sensitivity analysis
is then performed to determine the sensitivity of the following parameter changes: the
amount of production, oil and gas prices, capital costs (CAPEX), production operating
costs (OPEX), and incentive tax affect the value of NPV, IRR and the Government take.
The results show that the best scenario is Scenario I with production time 7 years. The
economic analysis show that Scenario I is attributed to NPV of USD 29.1 million, IRR of
30.2% with Payback Period in year 2026.