Analysis and Mapping of Oil and Gas Well Drilling Cost in Offshore Areas in Indonesia

Abstrak

In 2016, oil price hit its lowest price at i.e., 43.14 US$/Bbl (average oil price in 2016) over the last 12 years. Since then, the Petroleum exploration and exploitation activities were decreasing worldwide due to the low oil prices and high cost of production (including cost of well drilling).
in 2017, Indonesia's oil and gas production reached 1.944,00 MBOEPD or 98.5% of the target and also there were 200 exploitation well drilled and lower than the number of well drilled in 2016 (227 well). Based on this condition, the government of Indonesia asks the Contractor to increase the drilling of oil and gas development well to maintain and increase the national oil and gas production. This paper will calculate and analyze the distribution of drilling cost in offshore area to help Contractors to find the area in Indonesia that has low drilling cost.
The purpose of this paper is, to divide the geographical areas of Indonesia into 4 different offshore areas (Natuna Sea, West
Java Sea , East Java Sea and East Kal. - Makassar Strait). Then, to collect the data that related with cost of development well
drilling (cost per depth) and distribute them to those aforementioned areas and finally define the area that has the lowest
and the highest cost of development well drilling.
Based on the analysis of 144 development well drilling costs, East Kal. - Makassar Strait had the lowest drilling cost by 1.14
MUS$/ft, then followed by West Java Sea as the 2nd lowest co drilling cost by 1.77 MUS$/ft, meanwhile Natuna Sea had the highest drilling cost by 3.49 MUS$/ft.
Finally, this paper is expected to provide contractors with a quick look at development well drilling cost in offshore area in Indonesia and guide them to choose which areas of Indonesia that will be exploited and also help them to create their
petroleum exploitation strategy in Indonesia by considering on these informations which will provide benefits for both government and contractor.