Course Overview

The crude price at the world market had been extremely high during the last few years that nobody had expected and now it has drastically dropped to its “moderate price” affected by the global financial collapse which again nobody has expected. However the price at US $ 35 – 45 per barrel as it is now is still actually very attractive in the oil business.

A petroleum upstream operation a is very high risk investment so that the investor has to consider all the aspects that involve in such operation. The PSCs, the government regulations, the fiscal terms and the potential hydrocarbon discoveries in the Working Area are some of those aspects as wells as the financial ability, the technical competence and the professional skill of the contractor.

This course starts by reviewing the Law No. 22/2001, the PP’s as well as the PSC and the key points followed by discussion about the process of proposing a Working Area.

After the Law No.22/2001 BPMIGAS is the one Board that has the authority to manage the upstream operation on behalf of the government.  For the purposes of the ’pre, the current and the post audit’ for such operation the PSC the contractors have to submit to BPMIGAS for approval: Annual Work Program and Budget (WP & B), Plan of Development (POD) and Authorization Financial Expenditures (AFE), Financial Quarterly Report (FQR) and Closed Out Report and some other reports. They also have to attend the regular meetings in accordance with the control system.

The course package will cover all of the above subjects. Further a case study on POD will show the way to build a POD technically and economically justified in the right manner as guided by BPMIGAS. and thus will lead the contractors in making profit in their businesses within the corridor of the government policy.

Program Topics

Day 1

Introducing the Law No. 22/2001, the PPs (Peraturan Pemerintah) and the Important Issues, Preparing and Offering a Working Area, Types of Cooperation Contracts, Diagramatic Entitlement Share Calculation, PSC and its important points, Petroleum Upstream Operation and its Costs Classification, Cost Recovery in the PSC, Plan Of Development (POD) for BPMIGAS Approval. A Case Study ‘Building the POD of Offshore Beta Filed’ (Part I): Execution of a Working Area, Exploration Activities, Discoveries and Delineations and Reserve Calculation.

Day 2

A Case Study ‘Building the POD of Offshore Beta Field’ (Part II): Production Forecast, Development Scenario (Drilling and Production Facilities), Project and Expenditures Schedules, ’New Field’ Justification, Economic Evaluation (ROR, POT, Revenue Distribution, Sensitivity), Conclusion and Recommendation, Projection of the Offshore Alpha Block Activities.

Basic Philosophy of the Financial Budget and Reporting System, Discussion in detail about AFEs, WP & B, POD and FQR for PSC and JOB, PSC Exhibit C.

Day 3

Explaining all about PSC Cost Recovery: Capital and Non Capital Cost, Exploration and Development Cost, Production Cost, General & Administration Cost, Depreciation, Production/ Lifting Entitlement, Government Tax, First Tranche Petroleum, Domestic Market Obligation, Economical Aspect, Cash Flow Analysis, Investment Credit, Unrecovered Cost, POD Economics

Utilities and Auxiliaries, Oil and Gas Cost, Cash Settlement, Case Studies and Questionaries.

Course Leaders

E.R. Suwatidjah | Siti Sunari