Forecasting and Modelling Onshore Gas Reserves in IndonesiaUsing the Creaming Curve and Linear Regression Analysis

Abstract

In early 2016, oil prices fell to its lowest level (30.32 US/bbl) over the last 12 years, and the coronavirus (Covid-19) outbreak that started at the end of 2019 has had a negative impact on the world economy (including the oil and gas industry). Since then, petroleum exploration and exploitation activities have decreased worldwide. The oil and gas companies must look for potential oil and gas reserves that can be produced and had to make extra cost savings and produce new strategies to avoid negative cash flow and keep the projects economically acceptable, such as: cost efficiency, proposed incentives (investment credit, interest cost recovery, etc.), proposed changes to the terms and conditions of the existing contract (depreciation acceleration, DMO holiday, share of First Tranche Petroleum (FTP), change of Split Ratio, etc.), etc.

In terms of oil and gas reserves, this paper will assist the Contractors and the Government in determining the area that has the highest and the lowest number of gas reserves per project using the Creaming Curve and Linear Regression method by processing statistical data from 165 data (onshore gas projects), so that Contractor are able to analyze which area is economically acceptable for oil and gas activities. Based on the analysis of 165 onshore-gas reserves in Indonesia, Sulawesi is estimated to have the highest amount of onshore gas reserves by 521.90 BSCF per project, which means that these areas have become the most interesting areas for contractors to produce profitable gas projects. Meanwhile, Kalimantan is estimated to have the lowest  mount of onshore gas reserves by 46.20 BSCF per project compared with other areas in Indonesia and this is because there are quite a lot of projects that are concentrated in one area (East Kalimantan) which causes the condition of reserves in that area to mature.