Meeting The Strategy Of Petroleum Exploration Based On Statistical Analysis Of Development Cost And Commercial Reserves In Indonesia

In 2016, oil price hit its lowest price (43.14 US$/bbl) over the last 11 years. Since then, the exploration and exploitation activities were decreasing worldwide due to the low oil prices and high cost of development. This paper will evaluate the exploration risk based on analysis of 424 projects in Indonesia. The purpose of this paper is, to divide the geographical areas of Indonesia into 6 different areas. Then, to collect, to calculate and to distribute the development cost and commercial reserves to those aforementioned areas. The result showed that the eastern area of Indonesia had the lowest development cost and the highest commercial reserves, which consequently mean that the petroleum exploration activity should be done by contractors in eastern area. The lowest development cost and highest commercial reserves are located in Papua (9.47 US$/bbl, 624.69 MMBOE), meanwhile the highest development cost and lowest commercial reserves are located in Sumatera (16.06 US$/bbl, 46.94 MMBOE). Finally, this paper is expected to provide contractors with a quick look at petroleum industry in Indonesia and guide them to choose which areas of Indonesia that will be explored and help them to create their petroleum exploration strategy in Indonesia by considering on these informations.