Managing production profile uncertainties in P field LLP project economic evaluation using factorial design

Abstract

P field is a Gas field in Mahakam area, East Kalimantan, Indonesia. Having been produced since 1999, its production has decreased and is forecasted to fall below economical cut-off starting at the end of 2020. Low Low Pressure (LLP) project may extend the life of the field. In 2016, An economic evaluation has been performed for LLP pilot project on Platform 4 and Platform 5 but didn’t properly integrate the uncertanties behind the production profile. This study evaluates a new approach to perform economic evaluation for LLP project on the remaining platforms. The new method develops a model from platform 2 data to capture production profile uncertainties by using facto- rial design. Monte Carlo simulation is applied to the model to obtain a production profile range. Economic analysis is then performed to calculate Net Pressent Value (NPV), Internal Rate of Return (IRR) and Payout Time (POT). Eventually, the new method conclude that the LLP project on Platform 2 will generate cumulative cash flow be- tween 32.9 to 60.4 MUSD (NPV0) or 11.7 to 21.8 MUSD (NPV11) with IRR ranging between 27 to 34%, therefore it is economical. Information gathered from Platform 2 evaluation hinted that only Platform 1 has the potential to be economical. Additional work is required to have a complete economic evalution, however, the management should decide go on with the platform 2 LLP project.