ECONOMIC EVALUATION OF FISCAL REGIME ON EOR IMPLEMENTATION IN INDONESIA: A CASE STUDY OF LOW SALINITY WATER INJECTION ON FIELD X BACHELOR THESIS Faridh Afdhal Aziz 12215021 Submitted as partial fulfillment of the requirements for the degree of BACHELOR OF ENGINEERING in Petroleum Engineering study program PETROLEUM ENGINEERING STUDY PROGRAM FACULTY OF MINING AND PETROLEUM ENGINEERING INSTITUT TEKNOLOGI BANDUNG 2019 ECONOMIC EVALUATION OF FISCAL REGIME ON EOR IMPLEMENTATION IN INDONESIA: A CASE STUDY OF LOW SALINITY WATER INJECTION ON FIELD X BACHELOR THESIS FARIDH AFDHAL AZIZ 12215021 Submitted as partial fulfillment of the requirements for the degree of BACHELOR OF ENGINEERING in Petroleum Engineering study program Approved by: Thesis Adviser, ………………………… Prof. Ir. Purnomo Yusgiantoro, M.Sc., M.A., Ph.D. NIP. 195106161998091001 1 ECONOMIC EVALUATION OF FISCAL REGIME ON EOR IMPLEMENTATION IN INDONESIA: A CASE STUDY OF LOW SALINITY WATER INJECTION ON FIELD X Faridh Afdhal Aziz*, Purnomo Yusgiantoro**, and Prasandi Abdul Aziz** Copyright 2019, Institut Teknologi Bandung Abstract There are currently two fiscal regimes designated for resource allocation in Indonesia’s upstream oil and gas industry, the Production Sharing Contract Cost Recovery (PSC) and Gross Split. The Gross Split in the form of additional percentage split is designed to encourage contractors to implement Enhanced Oil Recovery (EOR) in mature fields. Low Salinity Water Injection (LSWI) is an emerging EOR technique in which the salinity of the injected water is controlled. It has been proven to be relatively cheaper and has simpler implementations than other EOR options in several countries. This study evaluates the LSWI project’s economy using PSC and Gross Split and then to be compared to conventional waterflooding (WF) project’s economy. There are four cases on Field X that are simulated using a commercial simulator for 5 years. The first case is Base Case with no injection water, the second is conventional waterflooding with the salinity of injected water is 25000 ppm, the third is LSWI with the salinity of injected water is 1000 ppm (LSWI 1), and the last case is LSWI with the salinity of injected water is 2000 ppm (LSWI 2). Then, the cases are evaluated under PSC and Gross Split to calculate the project’s economy. The economic indicators that will be evaluated are the Net Present Value (NPV) and sensitivity analysis is also conducted to observe the change of NPV. The parameters for sensitivity analysis are Capital Expenditure (CAPEX), Operating Expenditure (OPEX), Oil Production, and Oil Price. The parameters value will be varied ranging from 70% to 130%.