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

Abstract

This study evaluates a new approach to perform an economic evaluation for the Low Low Pressure (LLP) project on the different platforms. P ield is a Gas ield in the Mahakam area, East Kalimantan, Indonesia. Since 1999, its production has decreased and is forecasted to fall below economical cut-off starting at the end of 2020.project may extend the life of the ield. In 2016, An economic evaluation had been performed for the LLP pilot project on Platform 4 and Platform 5 but did not properly integrate the uncertainties behind the production pro ile. The new method proposed in this study develops a model from platform 2 data to capture production pro ile uncertainties by using factorial design. Monte Carlo simulation is applied to the model to obtain a production pro ile range. Economic analysis is then performed to calculate Net Present Value (NPV), Internal Rate of Return (IRR), and Payout Time (POT). Eventually, the new method concludes that the LLP project on Platform 2 will generate cumulative cash low between 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 evaluation. However, the management should decide to go on with the platform 2 LLP project.

Unequal Economic Growth Between Regions in Indonesia: Hard Infrastructure or Soft Infrastructure?

“…In Indonesia, regional inequality occurs strongly between the western region of Indonesia and the eastern region of Indonesia. This occurring condition is a consequence of development that is concentrated in select regions (Alexiou, Vogiazas, & Nellis, 2018;Chotia & Rao, 2017;Radya & Budi, 2019). Until now, the development carried out by the Government of Indonesia is still focused on the region of Java, although under President Joko Widodo's policy, several attempts have been made to build new economic points in various regions in Indonesia through the development of infrastructure supporting economic activities.…”

Towards the similarity of the countries in terms of business cycle synchronization and income level equalization–empirical analysis

“…It should be remembered, however, that the results are distorted due to the fact that data for recent years are just preliminary estimates. For example, the International Monetary Fund's forecasts are often used while the IMF makes annual forecasts of key economic indicators (including economic growth and GDP levels) even 5 years ahead (International Monetary Fund, 2017;Radya & Budi, 2019), but these are not results based on the real data. The aim of this study is an attempt to estimate the rate of β convergence with the use of data with higher than annual frequency.…”