BERLIAN EAST FIELD DEVELOPMENT PLAN

GROUP 3
• Name Student ID
• Ng Wei Kent 1001436
• Loo Zheng Hao 1001437
• Loong Ken Zhen 1001436
• Tai Khai Men 1001437
• Ng Ming Quan 1001437
• Wong Shao Hang 1001335
• Lee Chun Da 1001436
• Nicholas Lam Chin Seng 1001436
• Trishan Nair A/L Prabakaran 1001437
• Kartik A/L Ravintharan 1001541
 • INTRODUCTION

OUTLINE • FIELD BACKGROUND

• FIELD SUMMARY

• ASSUMPTIONS

• SURFACE DEVELOPMENT PLAN

• CASE ONE

• CASE TWO

• CASE THREE

• CONCLUSION
INTRODUCTION

• Objective
i. To analyse & plan oil & gas project and its decision making
process
ii. To evaluate and conclude oil or gas projects economic
feasibility
Tasks Performed

• Performed Economics Evaluation to determine the best

development Case among 3 cases for Berlian East field

• Estimate related Capex and Opex for respective case (show

the evidence of the cost)

• Constructed sensitivity analysis (spider plot) for all cases

FIELD LOCATION
 FIELD BACKGROUND
Berlian East Field Berlian Field

• Located 25km offshore Peninsular • 20km Northwest of the proposed

Malaysia, 20km northwest of Berlian Berlian East Field development.

Field, and 29km from Pekan Crude • Facilities included:

Oil Terminal (PCOT) i. Three 24 slots drilling

• Water Depth: 76m platform

• Discovered by well Berlian East-1 ii. One CPP comprising:

drilled in Block 1 after 2D seismic in  Production module

1999. (60Mstb/d)
 Water Injection module
(120Mstb/d)
 Gas compression module
(50MMscf/d)
FIELD BACKGROUND

Figure 1. Schematic diagram for each well location in BerlianEast Field

 FIELD BACKGROUND
LEGEND :
Proposed Well M2/3
Proposed Well M7/8
Proposed Well M9/14
Proposed Well M15
M2/3
M 7/8 Proposed Water
Injection
M 9/14 Existing Well
(Exploration/Appraisal

M15

M 9/14

M 7/8
M2/3

Figure 2. Area of interest in Berlian East Field

The main hydrocarbon accumulations and the major inputs to the project in the four
pay-zones of this field are tabulated below :-

Pay-zones M 2/3 M 7/8 M 9/14 M 15 Total

STOIIP (MMSTB) 149.5 345.3 23.34 61.6 579.74

EUR (30%) 44.85 103.59 7.002 18.48 173.922

Table 1. Total Reserves

Average Recovery Factor is 0.30.

Reserve Recovery:
= (149.5 MMSTB + 345.3 MMSTB + 23.34 MMSTB + 61.6 MMSTB) X 0.3
= 173.92 MMSTB
FIELD SUMMARY
The table below are the information to develop the field during the life stage of
oil field. The three cases of the development plan with satellite is consist of
three stage: exploration, appraisal and production.

Time of the
Number of the Price of the wells
Stage wells
wells (MM.USD)
(years)

Exploration well 2 95.4 2

Appraisal well 1 16 1
Production well 4 284 1
Table 2. The drilled well during the life stage of the fieldReview high-level
schedule

4% of Total Capex

Escalation fixed OPEX each

year: 0.02%

Table 3. Fixed OPEX rate

INFORMATION
Description Unit

Royalty Rate % 10.00

Capital Allowance %/year 10.00

Tax Rate % 38.00

WACC % 30.00

Oil Price Base (year 0) USD/Bbl 120.00

Escalation

Oil Price Base % p.a. 0.50

PETROLEUM AGREEMENT
National Oil Company (NOC) Contractor

Input Variable Input Variable

Oil Production Oil Production

Oil Price Oil Price

Capex Capex

Opex Opex

Royalty Rate Royalty Rate

Cost Ceiling Rate Cost Ceiling Rate

NOC Profit Rate Contractor Profit Rate

Cash Out Cash Out

Net Cash Flow After Tax Net Cash Flow After Tax
PETROLEUM AGREEMENT
National Oil Company (NOC)
Revenue Oil Production * Oil Price
Royalty Royalty Rate * Revenue
Cost Celling Cost Ceiling Rate * Revenue
Cost Incurred Capex + Opex (Obtain from Input Variable)
Cost Bank Cost Carryforward + Cost incurred
Cost Recovered Min (Cost Bank and Cost Ceiling )
Unrecovered Cost Cost Bank - Cost Recovered
Profit Revenue - Royalty - Cost Recovered
NOC Profit NOC Profit Rate * Profit
NOC Entitlement (Cash In) NOC Profit
Income Before Tax NOC Entitlement (Cash In)

Taxable Income Income Before Tax

Tax Paid Tax Rate * Taxable Income

Income After Tax Income Before Tax - Tax Paid
Cash Out Tax Paid
Net Cash Flow After Tax NOC Entitlement (Cash In) -Cash Out
PETROLEUM AGREEMENT
CONTRACTOR
Revenue Oil Production * Oil Price
Royalty Royalty Rate * Revenue
Cost Celling Cost Ceiling Rate * Revenue
Cost Incurred Capex + Opex (Obtain from Input Variable)
Cost Bank Cost Carryforward + Cost incurred
Cost Recovered Min (Cost Bank and Cost Ceiling )
Unrecovered Cost Cost Bank - Cost Recovered
Profit Revenue - Royalty - Cost Recovered
Contr. Profit Contr. Profit Rate * Profit
Contr. Entitlement (Cash In) Contr. Profit
Income Before Tax Contr. Entitlement (Cash In)

Taxable Income Income Before Tax

Tax Paid Tax Rate * Taxable Income

Income After Tax Income Before Tax - Tax Paid
Cash Out Tax Paid
Net Cash Flow After Tax Contr. Entitlement (Cash In) -Cash Out
Calculation
Calculation
PSC TERMS
Calculation
Calculation
 CASE 1
SATELLITE DEVELOPMENT TIEBACK
CAPEX OF CASE ONE
Description Cost
Of satellite (MM.USD)

Seismic 32.81

Exploration 95.40
Well test 28
Appraisal 16
Tangible 196
Intangible 88
Pipelines 22.7
Topside 90
Structure 110
Other facility 40
Total 718.91
 CASE 1
SATELLITE DEVELOPMENT TIEBACK
Main Calculation
 CASE 1
SATELLITE DEVELOPMENT TIEBACK

NATIONAL OIL COMPANY (NOC) ANALYSIS

Cumulative Net Cash Flow (NCF)
 CASE 1
SATELLITE DEVELOPMENT TIEBACK

Net Present Value Vs. Discount Rate

 CASE 1
SATELLITE DEVELOPMENT TIEBACK

Net Present Value Vs. Discount Rate

 CASE 1
SATELLITE DEVELOPMENT TIEBACK

NOC Cumulative Cash Flow

 CASE 1
SATELLITE DEVELOPMENT TIEBACK
Sensitivity
 CASE 1
SATELLITE DEVELOPMENT TIEBACK

CONTRACTOR ANALYSIS
Cumulative Cash Flow
 CASE 1
SATELLITE DEVELOPMENT TIEBACK

Net Present Value Vs. Discount Rate

 CASE 1
SATELLITE DEVELOPMENT TIEBACK

Net Present Value Vs. Discount Rate

 CASE 1
SATELLITE DEVELOPMENT TIEBACK
Contractor Cumulative Cash Flow
The graph shows the discounted net cash
flow after tax plotted against the time. It is
observed that the payback period is
between year 3 and 4. This indicates that
the payback period is only 20.8 % of the
production lifetime of the project, therefore
indicating that remaining 79.2 % of time is
profitable.
 CASE 1
SATELLITE DEVELOPMENT TIEBACK
Sensitivity
 CASE 2
SUBSEA DEVELOPMENT TIEBACK

- Subsea drilling is a process that is done in the high Description Cost

seas and oceans for the purpose of oil excavation. Of subsea (MM.USD)

Seismic 32.81
- Subsea drilling or better known as offshore
Exploration 95.40
drilling is a process that involves a lot of
complications, but one need to understand that this Well test 28
is the only drilling that allows development to Appraisal 16
progress without any lapse in exploration and Tangible 196
production stages. Intangible 88
Pipelines 210
- Oil rigs are used to carry out subsea drillings. subsea 79
Structure 110
- With the aid of these oil rigs, operating companies
Other facility 180
extract crude oil and filtered them into daily usage
Total Capex 925,2
by-products.
 CASE 2:
SUBSEA DEVELOPMENT TIEBACK

Main Calculation
 CASE 2:
SUBSEA DEVELOPMENT TIEBACK
NATIONAL OIL COMPANY (NOC)
ANALYSIS
Cumulative Net Cash Flow
 CASE 2:
SUBSEA DEVELOPMENT TIEBACK

NOC Cumulative Cash Flow Vs. Year

 CASE 2:
SUBSEA DEVELOPMENT TIEBACK

Net Present Value Vs. Discount rate

 CASE 2:
SUBSEA DEVELOPMENT TIEBACK
Net Present Value Vs. Discount rate
 CASE 2:
SUBSEA DEVELOPMENT TIEBACK
 CASE 2:
SUBSEA DEVELOPMENT TIEBACK

CONTRACTOR ANALYSIS: CUMULATIVE CASH FLOW

 CASE 2:
SUBSEA DEVELOPMENT TIEBACK
Cumulative Net Cash Flow Vs. Year
 CASE 2:
SUBSEA DEVELOPMENT TIEBACK

Net Present Value Vs. Discount Rate

 CASE 2:
SUBSEA DEVELOPMENT TIEBACK

Net Present Value Vs. Discount Rate

 CASE 2:
SUBSEA DEVELOPMENT TIEBACK

Sensitivity

The diagram shows the

sensitivity for subsea
development. As it can be
seen from the spider plot, a
variation in the oil production
and oil price will affect the
NPV at an equal and also the
highest rate.
 CASE 3:
SATELLITE WITH FPSO
Description Of Satellite Cost (MM.USD)

Seismic 32.8

Exploration 95.4

Well test 28.0

Appraisal 16.0

Tangible 224.6

Intangible 88.0

Pipelines 21.0

Topside 287.0

Structure 440.5

Other facility 40

Total CAPEX 1438.3

 CASE 3:
SATELLITE WITH FPSO

Main Calculation
 CASE 3:
SATELLITE WITH FPSO

NATIONAL OIL COMPANY (NOC)

ANALYSIS
Cumulative Net Cash Flow
 CASE 3:
SATELLITE WITH FPSO

NOC Cumulative Cash Flow Vs. Year

 CASE 3:
SATELLITE WITH FPSO

Net Present Value Vs. Discount Rate

 CASE 3:
SATELLITE WITH FPSO

Net Present Value Vs. Discount Rate

 CASE 3:
SATELLITE WITH FPSO
 CASE 3:
SATELLITE WITH FPSO

CONTRACTOR ANALYSIS: CUMULATIVE CASH FLOW

 CASE 3:
SATELLITE WITH FPSO

CUMULATIVE NET CASH FLOW VS YEAR

 CASE 3:
SATELLITE WITH FPSO

Net Present Value Vs. Discount Rate

 CASE 3:
SATELLITE WITH FPSO

Net Present Value Vs. Discount Rate

 CASE 3:
SATELLITE WITH FPSO

The sensitivity
analysis indicates that
the oil price and the
oil production will
affect the NPV the
most, if increased or
decreased by 20%
 CONCLUSION
The feasibility of each cases are as
stated in the table below.
Case One Case Two Case Three

CAPEX 718.90 925.20 1438.30

OPEX 617.01 793.41 1195.43

NPV 59.01 -43.43 -92.78

IRR 34.80 28.27 25.67

Discounted Payback
4.16 4.59 5.22
Period (Years)

DPIR 4.42 -2.53 -3.52

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 REFERENCES

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Information Administration. Oil and Gas Lease Equipment and Operating Cost 1988
through 2006. Retrieved from
https://www.eia.gov/pub/oil_gas/natural_gas/data_publications/cost_indices_equip
ment
4. Frenkel, J. and D. Romer. 1999. “Does Trade Cause Growth?” American Economic
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6. Grossman, G. and E. Helpman. 2016. Innovation and Growth in the World
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2018)
THANK YOU!
GROUP 3