ABSTRACT: Case Study: Results of a National Oil Company / Multi-National Oil Company Team

Aldrich, Jeff¹, Budiyento Thomas², John Girgis³, Herucokro Bpk⁴, and Marlina Sambas⁵
(1) Forest Oil International, Houston, TX
(2) Repsol-YPF-Maxus, Jakarta, Indonesia
(3) Repsol-YPF, Houston, TX
(4) Pertamina, Jakarta, Indonesia
(5) YPF Maxus Southeast Sumatra B.V, Jakarta Selatan, Indonesia

In the early 1990s Pertamina, Indonesia's National Oil Company and YPF Maxus, an International Exploration Company, as contractor to Pertamina and operator of the Southeast Sumatra (SES) PSC recognized the opportunity to potentially unlock substantial economic potential in numerous fields that were discovered yet were non-commercial under the current cost and contract environment. These fields were discovered over the twenty-five year history of the contract area during several exploration campaigns.

Several other companies had recognized similar opportunities in similar areas in Indonesia but traditional negotiations for government based incentives were not successful. A different approached was needed. Based on the success of previous Multi-disciplinary teams that YPF Maxus utilized in SES, Pertamina and YPF Maxus formed a joint multi-disciplinary team to explore new ways to commercialize what was termed "Marginal Fields".

The results were the introduction of new "Marginal Fields Incentives" formula, the agreement to use current incentives in the contract previously given only to "new fields" to commercialize several 'waves" of marginal fields. These incentives along with dramatic reduction in costs enabled the PSC to commercialize over ten fields to date with additional more fields currently being considered. The economic results from these fields exceeded the anticipated results and yielded substantial economic benefits to both Indonesia and the YPF Maxus partnership. Today these fields have already produced over 12 million barrels of oil and current production ranges from 15 - 20,000 BOPD.

AAPG Search and Discovery Article #90913©2000 AAPG International Conference and Exhibition, Bali, Indonesia